Riding the Mexican wave

Mexican food has been riding a wave of popularity in New Zealand in recent times, and Ay, Caramba is one of the key players behind the trend. Glenn Baker has their story.

According to Uber Eats, Mexican was the most popular cuisine ordered in 2020 alongside North American cuisine, with tacos doubling in popularity compared to the same time the previous year. It’s one reason why Mexico-born Ay, Caramba founder Arturo Luna (pictured) is so excited about the future of his business – even stock delivery challenges and hospitality closures from Covid-19 couldn’t dampen his enthusiasm.

Today Ay, Caramba is New Zealand’s leading supplier of Mexican retail food products, ingredients and ready-to-eat dishes, and the exclusive distributor of several brands. It’s a far cry from when Arturo started the business as a hobby.

“I had a friend who was opening a Mexican restaurant and struggling to find mescal (a distilled spirit made from agave) in New Zealand,” he recalls. “I saw an opportunity and with zero knowledge did my first small import. It was quite an expensive one as I made various mistakes – which I now call school fees! – but these initial mistakes allowed me rethink the way I would import.”

More requests followed – for both Mexican liquor and food ingredients – and with no local importers in touch with what Kiwis really wanted, the door was wide open for Ay, Caramba.

An initial focus on retail quickly led to enquiries from restaurants and distributors for food service size products.

“Suddenly Ay, Caramba wasn’t a hobby anymore, it was a full-time job for my wife and I,” says Arturo.

They became even busier when a tortilla manufacturing company approached them with an offer to buy their Remarkable Tortillas brand. Was it too early to go from importer to food manufacturer? Their business mentor, and now business partner, John Sames said “no”.

After four years of hard work and numerous challenges Ay Caramba is now importing more than 120 different products and producing premium quality corn and flour tortillas in New Zealand.

Arturo says Mexico consists of 32 states and every single one has its own iconic Mexican dishes or beverages (or both). “The options are endless and so are the flavours. Mexican food can be as simple as a taco or as complicated as a ‘mole’, but it will always be delicious,” he says.

“I think Kiwis like the whole concept of what Mexican food represents. When I think of Mexican food, not only a delicious taco comes to mind – I always think of family, friends, party, authenticity, comfort, culture and traditions. That’s why we all love Mexican food.”

“As my business mentor would say, ‘don’t be afraid to think big’. Believe in yourself and believe in your project. Take risks and be prepared to make mistakes but never be discouraged.”

Business growth has not come without its challenges. Arturo remembers it was difficult sourcing suppliers to begin with. Everybody was keen to sell him huge volumes but initially he wasn’t ready. “We needed consistent supply but in small volumes,” he remembers. “It meant we had to pay premium fees, but that was the only way to start building a portfolio and a name in New Zealand.”

Logistics, costing and price volatility have been other major challenges too. “We import directly from Mexico and freight costs are always rising,” says Arturo. “Our costing was not always right, and there were transit times and inspections to consider. As a new importer I had many inspections that resulted in delays and a lot of extra charges.”

He says experience eventually gave him the necessary tools and knowledge to make the right decisions. Having a business mentor is really helpful too, he says.

Covid comes calling

When the pandemic arrived in New Zealand Ay, Caramba was “affected in all possible ways”, says Arturo.

“We had almost zero production, all our containers were severely delayed, and all our imported Mexican products became either out of stock or really expensive.” 

Ay Caramba’s online retail store experienced more traffic as people had more time to search for new products. “But unfortunately we were out of stock on many of them. As a positive though, all this new traffic helped us to gain some brand awareness,” says Arturo. 

“This quiet time also allowed us to plan and execute the move of our manufacturing facility from Kapiti Coast to Auckland. We are now producing our tortillas in a brand-new facility located in Takanini.”

More plans for growth

In terms of manufacturing, Arturo says the plan is to definitely develop more new products. “Consumer trends are constantly changing so we have to adapt and keep innovating.”

He says brand awareness is now one of their main goals. “We know we have an amazing range of products and our tortillas are one of the best in New Zealand – our Google reviews won’t let us lie about that – and we have a well standardised process and highly trained team. We are definitely ready for the next step so we are aiming to have some presence in supermarkets by the end of 2021.”

The plan is to expand their catalogue of imported Mexican products too. “Our objective is to offer our customers a whole Mexican experience.”

Arturo says corn tortillas are normally their best-selling locally made product – unless there is a government-funded program for school lunches, which sparks a demand for flour tortillas.

He says sometimes products go viral on social media and they get inundated with orders for that specific product. “Lately the trend is chamoy, which is a sweet, spicy and tangy sauce made using pickled fruit – typically mango, apricot or plum.”

Arturo has some good solid advice for other start-up entrepreneurs. “As my business mentor would say, ‘don’t be afraid to think big’. Believe in yourself and believe in your project. Take risks and be prepared to make mistakes but never be discouraged.”

Having a strong team that believes in your project and is willing to go the extra mile is also fundamental for your project’s success, he adds.

Glenn Baker is editor of NZBusiness and ExporterToday.co.nz