News

Cacique breaks ground on new $88M facility

In the midst of a market that seems to be moving toward plant-based dairy, Hispanic foods company Cacique has sealed a deal to open a brand new $88 million dairy processing facility in Amarillo, Texas. The new facility will be equipped to handle dairy processing, including the production of the company's authentic Mexican-style cheeses, cremas and yogurts.

As part of this investment, Cacique said it will increase its R&D to drive product innovation and increase its national brand presence as it builds its long-term growth strategy. However, at this time, there are no plans to process plant-based dairy products at this new facility, a spokesperson told Ingredients Network. Nevertheless, the company said this new manufacturing site is key for the company's future growth as well as the surrounding economy; the new plant will provide 200 new full-time jobs.

Opening a new dairy processing facility appears to fly against industry headwinds that are steadily pushing more and more manufacturers to embrace plant-based alternatives as more traditional products fall out of favor from consumers. However, although a 2019 report from RethinkX said the beef and dairy industries will collapse, other sources point to slow, continual growth as the future for dairy. A report from Mordor Intelligence projected the global dairy market will increase 5% annually from 2020-2025.

While growth in animal dairy is not as explosive as it is in plant-based, there is still interest in continuing to produce these products. Earlier this year, Cacique announced that Baupost Group took an undisclosed minority stake in the company as part of a funding round whose proceeds were intended to accelerate the brand’s growth.

Cacique also has the advantage of producing Hispanic food products which have seen growth in recent years as consumers search for more authentic ethnic eating experiences. This demand only accelerated during the pandemic as those who were unable to leave the house searched for excitement through food cooked in their own homes.

Not only are consumers interested in ethnic products to broaden their palates, but Cacique caters directly to the U.S. Latino population, which accounts for 18% of the overall U.S. population and 52% of all U.S. population growth between 2010 and 2019, according to the U.S. Census Bureau. The U.S. Latino population is not only growing, but as a group, it has the largest proportion of young people with a median age of 30. This means that Cacique has an opportunity to cater to consumers that are forming their preferred palates and guide their taste buds to acquire a preference for its products that individuals will then carry forward through their lives.

It is notable that Cacique chose to invest inside U.S. borders for its manufacturing rather than move to Mexico like other large CPGs such as Mondelez have done in recent years. However, investing in Texas is also not unique to Cacique. Goya Foods, the largest Hispanic-owned food company in the U.S., announced late last year that it will invest $80 million into its manufacturing and distribution facility in Texas.

Market trends will undoubtedly dictate the success of Cacique manufacturing investment and whether this additional capacity is required long-term, but with a majority of consumers continuing to cook at home and sustained interest in ethnic flavors, there is a good chance that this Hispanic-owned brand will find traction for its products as it expands.