Hormel Foods on Friday announced it had entered a joint venture agreement with Mexican food and beverage company Herdez Del Fuerte.
Together, Austin-based Hormel and Mexico City-based Herdez will create MegaMex Foods to market Mexican foods in the United States. Each company will hold 50 percent stakes in MegaMex.
"The collaboration should allow us to better serve both the growing U.S. Hispanic population and the vast numbers of the general population who love Mexican food," said Jeffrey M. Ettinger, chairman of the board, president and chief executive officer at Hormel Foods.
The venture will expand the existing agreement between the two companies and produce a portfolio with initial revenue of about $200 million, according to Hormel officials. MegaMex Foods' will include existing brands and products like Chi-Chi's, Herdez, La Victoria, Embasa and Dona Maria.
"MegaMex Foods will combine the premier Mexican food products and brands of Herdez Del Fuerte with the strength in manufacturing and distribution of Hormel Foods," said Juan Marco Gutierrez Wanless, Herdez Del Fuerte Chairman, in a statement
MegaMex Foods will be a free-standing entity with an independent management team based in Chino, Calif. The new venture will work with its parent companies on manufacturing, research and development, and the supply chain.
MegaMex Foods is expected to begin operating around October 26, 2009, which coincides with the beginning of Hormel's fiscal year 2010