Under its dynamic CEO Scott Miller, fruit punch producer Tampico Beverages is building on a loyal and expanding consumer base with new product launches. In this month's just-drinks interview, Miller discusses the company's current expansion strategy and aspirations for international growth with Annette Farr.

Chicago-based Tampico Beverages has been producing a range of fruit punches since the 1980s, growing a loyal core consumer base amongst the value-conscious Hispanic population in the US and selling widely, under licence, to some 50 countries throughout Latin America, Africa and Asia.

However, until Scott Miller's appointment as CEO in January 2005, Tampico had essentially remained a one-brand company, albeit one with a loyal consumer base. Miller said the appeal of Tampico for him was that of "a sleepy little brand that had great quality and brand loyalty, but hadn't really broken out of its consumer base. There were opportunities to develop a much broader beverage base and reach new channels of trade."

According to New York-based flavourist Virginia Dare, Hispanics are the fastest growing segment of the US population, accounting for 50% of the annual population growth. Virginia Dare says Hispanics currently comprise 14% of the total US population and it is estimated that by 2050, this segment will grow to over 100m people, representing 24.4% of the total US population. Furthermore, the Hispanic influence has had a substantial impact on mainstream American tastes in food and drinks.

Virgina Dare's study points out that Hispanics comprise a number of 'subsets', from Mexican-Americans in New Mexico and Colorado with years of family history living in the US through to newly arrived Mexican immigrants living in non-traditional locations such as the mid-south, the New York metro areas and New England. They have different taste preferences but a trait common to all is brand loyalty.

And that's what the Tampico brand has in abundance. Its flagship Fruit Punch drink is the No. 1 selling brand of refrigerated juice drinks in American groceries (AC Nielsen) and the core consumer is Hispanic.

CEO Scott Miller

Scott Miller, who previously worked with Pepsi, Snapple and Cadbury Schweppes, wasted no time on implementing a timetable of change. Such has been the success of this rejuvenation programme that the current (September) issue of Fortune magazine has identified Tampico as the No 2 up-and-coming brand to watch.

"First we needed to work on its overall image," Miller says, "so we redesigned the labels and gave the brand a new national image which created excitement both for the consumer and retail." The colourful labels and fruit imagery promote the 100% daily value of vitamin C in every 8oz serving.

This first objective was achieved in his first 45 days in office. At the same time, Miller set about creating a culture of empowerment within the workforce with innovation at the forefront, along with the appointment of a new management team. "Essentially we wanted to go from a sleepy culture to one that is empowered and accountable."

"Our second move was the introduction of a new flavour - Kiwi Strawberry Punch. This indicated to retailers and consumers that Tampico was undergoing change. They were excited that there was something new from Tampico. And now, in its second year, the new flavour is among the top five SKUs."

Then, in January 2006, the company unveiled Tampico Plus, the first new product line in the company's history. The drink features 50% reduced sugar, enriched with calcium and fortified with vitamins A, C, D and E.

"Our strategy for going forward is to build on the core Hispanic consumer that comprises children aged 6 to seventeen and their mums who trust the Tampico brand, and add new consumers," says Miller. "Tampico Plus appeals not only to our core consumers but also to 25-45 year-old females looking for a healthier option."

Further innovation followed with the launch of a zero-caloried natural tropical fruit flavoured range of waters (Piña Colada, Mixed Berry, Mamey Mango, and Grapefruit Tangerine) in a gallon pack. "There was no-one competing in the value gallon market. This gave us a point of difference in a growing category which gives value to both retailer and consumer."

Following its strategic growth path of offering a broader beverage range, this month has seen the launch of Tampico Energy. Miller recognises that this is a "growing and crowded segment", but believes that targeting the male in established Latino communities in Los Angeles, New York and Texas will give the company an edge over competitors.

Tampico Energy, which comes in the ubiquitous 16oz energy-style can conveys the image of a rooster. Why? "The rooster is a Hispanic cultural icon; proud and strong," Miller explains. The can carries the tagline 'l Más Bravo' (the fierce one). Apart from featuring typical energy drink ingredients such as taurine, guarana, ginseng, l-carnitine and caffeine, its citrus flavour creates a cultural point of difference.

So what's next for Tampico? The way forward, says Miller, will be to focus on value packaging options, reach new consumers and implement marketing initiatives such as the recent sponsorship of Padres Contra El Cáncer, (a fundraising concern which helps Hispanic families dealing with childhood cancers) to raise awareness amongst Hispanics. The event was staged on Universal Studio's Wisteria Lane, and linked with Eva Longoria of Desperate Housewives fame.

Further potential also lies overseas. "Growth in the future will come from the Pacific Rim and Europe over the next four years. There is a highly developed juice segment in Europe, especially Spain, which gives us a very real opportunity."

Miller is also bullish about the company's financial position. Without divulging precise figures, he describes Tampico as a mid-sized beverage company with revenues of approximately US$100m. He adds: "We will continue to be a brand that is very profitable and exceed expectations, and we will create that profitability from top-line growth."