October 14,
2002
San Antonio
brings NAFTA and the funeral industry
together.
By Patrick Osio,
Jr. – HispanicVista.com
On October 20, the
National Funeral Directors Association
(NFDA) opens its annual convention in San
Antonio, Texas. This year the competitive
effects of the North American Free Trade
Agreement (NAFTA) will be on display.
When NAFTA (North
American Free Trade Agreement) was
negotiated, and Texan Ross Perot screamed
there would be a sucking sound of jobs
going South, no one gave much thought to
the effects the agreement would have on
the funeral industries of the US and
Mexico. But effects it had – though
until now, the sucking sound of jobs were
to the North, the opposite of what Perot
had envisioned.
The US got to be
what it is because of its industrialists’
ability to smell out new markets and
pounce on them. Mexico represented a new
source of sales for caskets, embalming
products, cremation ovens, and all the
paraphernalia of the burial industry.
Mexican casket manufacturers were ill
equipped to counter by entering the US
market. So US giants like Aurora Caskets,
Batesville Caskets, and the York Group
were able to penetrate the Mexican
market, delegating Mexican manufacturers
to defensive positions attempting to hold
on to their market shares.
Batesville and
Aurora, principally, made a strong
presence with a line of high quality
caskets, and favorable financing terms.
Their high end products gained support
with Mexico’s rich and high income
sector, but were priced beyond the means
of the middle and lower economic classes,
a vast majority of the Mexican
population. Thus the more established
Mexican casket manufacturers survived the
initial Yankee onslaught.
In 2003, NAFTA
begins its tenth-year bringing with it
the first presence of a Mexican casket
manufacturer to the NFDA convention. Monterrey,
Nuevo Leon based Blagsa not only
survived, but prospered due to its early
recognition that it could not compete
with the high quality, high priced
caskets offered by US giants, and
reverting to its founder’s original
philosophy.
According to the
second generation head of the company,
Jesus Gutierrez, his father founded the
company in 1961 under the premise that a
person who lived and worked with dignity,
deserves to be buried with dignity. His
father, Blas Gutierrez, set out to
manufacture the highest quality, low cost
metal and wood caskets for the middle and
lower income families in Mexico. Over the
years the company prospered and has since
grown to have distribution centers in Guadalajara,
Jalisco and in Mexico City serving the
entire country.
Soon after NAFTA
took effect (January 1, 1994), Blagsa
entered into an exclusive distributor’s
agreement with the Dodge Company, the
world’s leading producer of
embalming chemicals, creating a
distributing company for those and other
products it acquires from the US. It also
took the time to learn how US companies
operate, manage, and market their
products.
The US’s 2000
Census indicating the Hispanic population
exploded by a whopping 57.9 percent from
22.4 million in 1990 to 35.3 million in
2000, with close to 25 million of the
total being of Mexican heritage, opened
the doors for Blagsa to contemplate the
possibility of entering the niche market
which they know so well –
high-quality-low-cost caskets for US
Latinos. A market that Blagsa suspects is
underserved by US manufacturers due to
the higher cost of manufacturing in the United
States.
Shipping a few
caskets and participating in the San
Antonio NFDA convention is the first
step, according to Gutierrez. The NFDA
information supports his conclusion as
there are close to 22,000 funeral homes
in the US, most of them attending the San
Antonio convention.
And the market
appears ample - in 2000 there were
2,404,000 deaths in the US, 8.54 per
thousand population. Though there are no
specific numbers on how many of these
were Latinos, the death rate would
indicate that over 200,000 Latinos died
that year or 16 times Blagsa’s
manufacturing capacity.
The need also
appears significant with the average cost
of a funeral from a survey of NFDA
members hovering in the $5,200 range, an
amount well beyond thousands of (not
only) Latinos’ reach, Blagsa and
other Mexican manufacturers may do well
in all the US’s low income sectors.
So NAFTA is coming
full circle with the presence of Blagsa
in this year’s San Antonio NFDA
convention. Others will follow.
___________________________
Patrick Osio, Jr. is
Editor of the weekly Internet publication
HispanicVista.com. He can be contacted
at: hispanicvista@cox.net.
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