10/29/2009 10:00:02 AM

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By Tim Ruzek
Post-Bulletin, Austin MN 

In an effort to market Mexican foods in the United States, the Austin-based Hormel Foods Corp. has closed on a joint-venture agreement that expands a partnership with another company to create MegaMex Foods LLC.

	What happened: Hormel Foods Corp. and Herdez Del Fuerte closed on a 50-50 joint-venture agreement to create MegaMex Foods LLC. Why it matters: It significantly expands an existing agreement between the two companies. What's next: MegaMex will market Mexican foods in the United States, producing a portfolio with about $200 million in initial revenue.

Hormel officials on Monday announced the 50-50 venture with Herdez Del Fuerte, S.A. de C.V.

The venture significantly expands the companies' existing agreement and produces a portfolio with about $200 million of initial revenue, according to Hormel.

MegaMex Foods has a comprehensive portfolio that includes brands such as Chi-Chi's, Herdez, La Victoria, Embasa an Dona Maria, among others that resonate with Mexican-American and mainstream consumers of Mexican foods, Hormel said in an announcement of the deal.

"This new venture takes our relationship with Hormel Foods to the next level," said Enrique Hernandez-Pons Torres, board chairman for MegaMex Foods. "By forming MegaMex Foods, we are able to better serve our retail partners and consumers while positioning our businesses for long-term growth."

MegaMex Foods is a free-standing entity with an independent management team based in Chino, Calif. It will optimize efficiencies, Hormel says, by strengths of the parent companies, such as manufacturing, research and development, and the supply chain.

Based in Mexico City, Herdez Del Fuerte is a leading manufacturer and marketer of consumer-branded food and beverages in Mexico and the United States. The company has a product portfolio mainly based in tomato, fruit, vegetable, jalapeno, mole sauce, coffee and tuna products.

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