The unlikely story of how Grupo Abascal grew from a neighborhood dry goods store to become one of Mexico’s top grains dealers.

By wpengine

0 Flares 0 Flares ×

Every business, whether it’s a roadside vendor or multinational corporation, must start somewhere. In the case of Grupo Abascal, that somewhere was a tiny village in northern Spain, where in 1927 a young Jose Abascal decided to emigrate to America in search of better opportunities.

“It’s an incredible story,” recalls his grandson Juan Carlos Abascal. “My grandfather came from a poor town in Spain during a time of economic turmoil. One day he left a note to his parents saying ‘I’m off to America to seek my fortune. Wait to hear from me.’ He was only 17. That day he boarded a ship with nothing more than a suitcase.”

Grupo Abascal is today considered a major player in Mexico’s wholesale food industry, comprising seven companies in and around Mexico City. Its main products are pulses such as beans, lentils, fabas, garbanzos and peas as well as spices like cinnamon, pepper, cacao and hibiscus.

During IFT’s recent visit to the Central de Abastos in Mexico City, Juan Carlos gave us a full tour of his family’s impressive operation and talked about his expectations for this year’s harvest. He also shared with us the story of Grupo Abascal, which demonstrates the tenacity required to achieve success in this industry and the importance of family ties across generations.

“If you look around the Central de Abastos you see all sorts of debris and neglect. One thing that always surprises guests that we bring to our warehouse is how clean and organized it is compared to what you see outside.”

IFT: Your grandfather left Spain at 17 with nothing but a suitcase. What did he do when he got to America?

Juan Carlos Abascal: Actually they stole his suitcase aboard the ship! The first place he arrived was Cuba and he said ‘Wow, what a place!’ At that time Cuba was the country with the highest GDP in Latin America, the country with the most riches and greatest abundance. But he said, ‘Well, this place is beautiful but it’s not for me. I’m poor and I have to seek out better opportunities.’ He didn’t know which part of America he was headed to until one day he arrived in Mexico. That was September 15, which is curious because September 15 is Mexico’s Independence Day. All the people were gathered in the main plaza in Mexico City chanting Que mueran los gachupines! (Die Spaniards die!). My grandfather soon found himself in the middle of the celebration. He enjoyed himself, but he never said a word for fear that they would recognize his accent. He just raised his arms and rode the wave of people. The next day he hopped on a truck headed for Vera Cruz where he asked for a job in a dry goods store. It was a place where people bought grains, seeds, spices and preserves. They also served coffee, tequila and things like that.

IFT: So it was a small business?

Juan Carlos Abascal: Exactly. And he continued to work there over the next fours years. And at the end of those four years he approached the owner of Aborrateria Aguila, as it was called, and he said, ‘I’m sorry but I can no longer work for you.’ And the owner said, ‘No, please don’t leave. You’re someone I really trust.’ But my grandfather said, ‘Well actually I’m here to tell you that I’ve been saving up all of my earnings from working for you these last four years and now I’d like to buy the store.’ So like that, he bought it. He was so tenacious, you know, even sleeping in the store when it was necessary. So he bought the store in 1930 and three years later it burned down. At the time it seemed like the worst possible thing that could have happened, but a few years later he realized it was actually a blessing in disguise because it forced him to move to Mexico City, which was the economic center of the country and remains so today.

There he found tons of immigrants and Mexicans selling textiles, dry goods, grains and seeds. He opened a store there even though he didn’t know anyone and started doing very well. After a while he returned to Spain and told his friends and family, ‘Hey I have this established business in Mexico.’ He then brought his younger brother back with him, they became partners and together they started bringing over more people from Spain, other family members and such. He set up a deal with his brother where he would live two years in Spain, his brother would live two years in Mexico, and then they would switch.

IFT: So there was a great deal of trust between them?

Juan Carlos Abascal: Exactly. There are many stories and anecdotes. For whatever reason his brother never married and when he died, my grandfather took over the business and continued working with his children. So from 1927 to 2013 that has more or less been our family’s history. We’re constantly looking for new trends, every year. For example, four years ago flax seed became very popular, so we started bringing that in. Now chia is the new trend, so we’re importing that. Our business has always been about that, bringing in new products to meet the local demand. Beans, alubia, peas, chickpea, lentils, soy beans—these products have always been in our portfolio. Now we’re selling a lot of chia, hibiscus, cinnamon, pepper and cloves. We have a fully diversified portfolio.

IFT: Tell me a bit more about your bean business. What products do you trade mostly?

Juan Carlos Abascal: Within our bean and grain portfolio, our main product is black beans. We deal jamapa black beans; bola caretaro; black beans from Zacatecas, Durango, San Luis and Chiapas; some pinto beans, such as Peruano and mayacoba. We also sell small, medium and large alubia beans. In general we always try to buy national products, as that is our main focus. When the harvest is poor we look to the U.S., to Michigan mostly, to make up for that deficit. Our small alubias come from Michigan, while the larger varieties are national. We also purchase chickpeas from the north of Mexico. We import faba bean and peas from Canada. From central Mexico to the south, bean consumption is mostly comprised of black beans, whereas in the north they consume mostly pintos. So we deal some pintos because there is some demand here but our main focus is black beans.

IFT: How is this year’s harvest looking? What are the current market conditions?


Juan Carlos Abascal: Truth be told, the last two harvests in 2011 and 2012 were very chaotic in Mexico due to lack of rain and poor resource management. This year is looking really good though. We hear it’s been raining in the main bean producing states. In Zacatecas there seems to be some excess rainfall which could postpone plant maturation but I don’t think it will be a major issue.

In terms of pricing, I don’t think we should get ahead of ourselves. The last two years were a slap in the face in many ways, so you’ve got to wait for the right moment and wait to see how things turn out before you buy. If prices are high, purchasing will be a lot slower, but it’s all a question of timing, waiting for the right moment and the right price. I think we’ll be buying beans from the United States again this year. American beans are really good quality, not to take away from the excellent quality we have here in Mexico. But the actual [import] volume will be totally relative. If you look at our warehouse right now, we have very few American beans left and even fewer national beans, so we’re really waiting to see the hard numbers for the incoming harvest over the next couple of weeks. If yields are as high as the various state authorities have indicated, it’s going to be a very good year. The prices will have to come down and this benefits all Mexicans.

IFT: There has been some concern that Mexico might close off imports from the United States this year. Do you think this is possible?

Juan Carlos Abascal: I don’t think so. In recent years it’s been necessary to import beans so we’ve looked elsewhere to places like the United States. This year the situation is different because the Mexican harvest is going to be very good and this should place a little pressure on the Americans to adjust their prices. But [the production volume] it’s still not enough. Any way you look at it we depend on beans from the United States. We’ve had some problems recently at the border because in the U.S. they’re telling us the beans they’ve sent are clean, but at the border they’re saying the opposite. So there’s a conflict of interests there, but this idea that they close off the border to one specific producer is a stretch. Regardless we’d still be importing lots of other grains and seeds of which Mexico could see a deficit. We actually like the idea, something that forces the Americans to sit down and say ‘Ok let’s look at this’ and maybe they adjust their prices a bit. My grandfather has an old saying ‘Always let the other guy earn the last peso.’ What he meant is that if you let the other person earn the last peso there’s always going to be more business for everyone. In the end, we’re not following the political issue very closely. We’re more focused on what farmers are saying—how planting is going, what kind of rainfall are you seeing, what yields are you expecting, etc.—and that’s what we’ll base our decisions on.

Learn more about Grupo Abascal by visiting their company websites