Bimbo and Gruma want to sell more bread and tortillas abroad

PEOPLE HAVE to eat, so food firms the world over give reassuringly consistent profits, even in lean times. Mexico is no different. The country’s 126m people buy $55bn-worth of packaged food annually. Sales of such fare have been growing quickly, notes Euromonitor, a research firm. Between 2015 and 2020 they expanded by 6.9% a year, compared with 4% in America.

This trend should have lifted the likes of Bimbo, the world’s largest baker, and Gruma, its biggest maker of tortillas. Instead, like many Mexican businesses in recent years of sluggish economic growth, they have fallen out of favour with investors. Stable profits notwithstanding, their market capitalisations are well below their peaks in the mid-2010s.

To whet the stockmarket’s appetite for their shares, both firms are doubling down on foreign markets. America’s packaged-food market alone is nearly ten times the size of Mexico’s. A loaf of Bimbo bread that costs $1.76 in Mexico sells for $2.77 north of the border. Bimbo has also acquired several big American brands, most notably Sara Lee, a maker of poundcakes and cream pies, in 2010.

These investments may at last be paying off, partly thanks to the pandemicinspired rush to comfort food. In 2020 Bimbo’s sales in America and Canada rose by 22%; operating profits in the region shot up by 84%. IRI, a data...