MEXICAN SAUCES ADD SPICE TO CATEGORY

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Reflecting the nation's booming interest in salsa-now an "American" food and marketers' favorite flavor for almost everything this year-Mexican sauce is the hot category in this sleepy group of meal enhancers.

Acquisitions by Campbell Soup Co. of Pace Foods and Pillsbury of Grand Metropolitan's Old El Paso have invigorated the $701.7 million category among manufacturers, and they are promoting heavily. Skyrocketing new entries from Tostitos and Taco Bell are also igniting the category.

Both Pace and Old El Paso have some work to do. Pace is up 12% in sales and the clear leader at $189.4 million, while second-ranked Old El Paso is down 3.2 share points and 5.6% in sales.

Old El Paso must reposition itself to become more "authentic," which consultants say is a natural evolution for ethnic sauces as they lose their commodity status and brands develop into consumer favorites.

Pace has the advantage here since it is seen as the more authentic of the two, but needs to strengthen itself on the coasts, where it has low visibility and share.

Restaurants hold a real franchise in Mexican sauces. Taco Bell makes a respectable entry, with huge sales growth of 412.7% to $18 million. Chi Chi's is a big name, though it loses share and rank to Tostitos, which became known for its restaurant-style chips.

Tostitos sauce is red-hot with a 653.9% sales increase to $81.1 million and a jump from No. 10 to third place in a year.

Private label sauce is also doing well, up 92% in sales to $24.8 million.

Other sauces in this category remain mostly lethargic, largely undifferentiated as commodities by marketers and consumers alike.

However, consultants say ethnic food trends could wake another category, such as Oriental sauces. Consumers are beginning to make some differentiations in that category between authentic brands and mainstays and that trend may spur an acquisition.

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