San Diego, June 2 - Nascent Wine Company, Inc., dba Nascent Food Service, Inc. ('Nascent'), the only nationwide distributor of food and beverage products in Mexico, announced today that it is exploring strategic options for two of its businesses: Palermo Italian Foods, LLC ('Palermo') and Grupo Sur Promociones de Mexico S.A. de C.V. ('Grupo Sur').
Sandro Piancone, CEO of Nascent, stated, “The strategic review is consistent with our stated objective to be the leader in food and beverage distribution in Mexico and to improve margins and profits by leveraging our platform with branded and private label products. The company is currently considering three possibilities for these subsidiaries, (1) a strategic partnership, (2) joint venture, (3) sale of these businesses. The proceeds will be reinvested into Nascent’s current portfolio of faster growth, higher margin businesses.
“As the dominant force within the Mexican foodservice marketplace, we believe by concentrating on our core competencies of food distribution in Mexico, we will continue to leverage our leadership position to capitalize on many additional opportunities in this market. We believe the increased focus on the strengths of our business model will greatly improve margins with a leaner and more effective organization.”
Palermo Foods, which was acquired by Nascent Foodservice in November of 2006, is an Italian food importer and distributer based in Miami, Florida, primarily serving the southern Florida markets. Palermo Foods operates out of a 33,000 square foot warehouse located in Miami, Florida and utilizes a fleet of approximately 8 trucks.
“Palermo has an excellent brand recognition and reputation within the southern Florida markets for distributing high quality Italian food products,” stated Mr. Piancone. “However, it remains primarily a U.S. business, and as such, does not fit within our strategic focus and business model of distributing products to the Mexican marketplace. We look forward to finding the right strategic solution for Palermo – a solution that properly positions the Palermo brand for future growth.”
Nascent Foodservice acquired Grupo Sur in July of 2007. Grupo Sur has been in the Mexican market for 30 years, and is a leading field marketing and below the line marketing organization. The Company has 4,500 contract employees servicing 240,000 retail accounts including supermarkets and convenience stores. Grupo Sur’s expertise includes merchandising, promotions, sampling, retail data collection and sales and marketing of retail products.
Mr. Piancone continued, “Grupo Sur is a leading marketing organization in Mexico, serving some of the strongest consumer branded companies including Procter and Gamble, Wal-Mart, 20th Century Fox, General Mills and many others. While their services are of value, we believe it is more cost efficient, and in the best long-term interest of the Company, to outsource this strategic capability.”
Mr. Piancone concluded, “While we believe that the value in Palermo and Grupo Sur is significant, we feel it is in the best interest of our shareholders, customers and employees to explore strategic alternatives for these businesses. We are excited about the long-term prospects of Nascent and look forward to exploiting our position as the leading distributor of imported food and beverage products in Mexico.”
About Nascent Foodservice, Inc.
Nascent Wine Company Inc. dba Nascent Foodservice is the only nationwide distributor of imported products in Mexico, marketing and distributing over 2,000 national and proprietary brand food and non-food products. Nascent Foodservice also has the exclusive right to distribute Miller Beer in Baja California, Mexico. In addition, Nascent sells select products from Nestle, Ferrarelle Water, Cora Italian Food Products, Avasoft Ice Cream, Mitsuki Asian products, Bonet European products, ROCKSTAR and Fusion Energy drinks, and Jolly Rancher Soda, Nery’s cheese products, among others.
Nascent is focused on acquiring the most profitable and well positioned distributors in Mexico with the best food and beverage portfolios in the country. Nascent is currently servicing over 240,000 sales points including supermarkets, convenience stores and foodservice accounts like Wal-Mart, Costco, Soriana, Comercial Mexicana, AM/PM, 7-ELEVEN, OXXO and many more. Nascent Foodservice trades on the OTC Bulletin Board as Nascent Wine Company, Inc., ticker symbol NCTW.OB.