Interview With CEO of Grupo Bimbo

7/28/2019 Interview With CEO of Grupo Bimbo

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MEXICO

G R U P O

BIMBOIt all starts w ithunderstandingtheconsunnerBY ELiDA B USTOS

Daniel Servitje. CEO G rupo Bimbc



MEXICO

hagaotra cosa

buena...

An ad from the '50s.

Bimbo S.A. was founded in Mexico in

1945, just as the world was starting to

emerge from W orld War II . Today it

boasts operations in 19 countries (including

China), vidth 153 production plants (42 in

Mexico, 111 abroad), 103 registered trade-

marks, and 127,000 fuU-time employees.

According to Ladn Trades Latin 500 rank-

ings, in 2011 B imbo posted revenue of $9,586

bulion and profits of$382.1 million.

Grupo Bimbo's management sees 2011 as a

year of great transformation, led by three stra-

tegic acquisitions to enhance its intem ational

position: itbought Sara Lee North American

Fresh B akery in the Un ited S tates, and Sara

Lee's businesses in Spain and Portugal, as well

as the traditional Argentine company, Fargo.

Daniel Servitje is CE O of Grupo B imbo

and a m ember of its founding family. In con-

versation with Latin Trade he explains how

the family firm has arrived at the kitchen table

of millions of people and become the success-

ful multilatina it is today.

WH EN DID THE COMPANY DECIDE TO

TAKE ITS OPERATIONS INTO THE

INTERNATIONAL MARKET?

The international expansion of Grupo B imbo

began in the 1980s, when we started export-

ing our products to the United States, to the

Hispanic pop ulation of Mexican origin.Then

we entered Latin A merica, which presents

different challenges.

HOW DO YOU W IN ANEW MARKET IN

THE BREAD-MAKING SECTOR, WHICH

AT FIRST GLANCE APPEARS TO BE AN

AREA CLOSELY TIED TO THE UNIQUE

CHARACTER OF ACOUNTRY?

Bread is one of the products that make up

part of the basic food basket of the majority ofa population, so we think the challenge lies in

finding a way to satisfy the palates of consu-

mers, adapting our products to their tastes

and trends, both at the local and world levels.

Some products can be successful in several

markets. It all starts with understanding the

consumer.

HOW DO YOU STUDY LOCAL TASTES IN

DIFFERENT M ARKETS BEFORE

LAUNCHING NEW PRODUCTS?

We consider global trends innutrition, localtastes, as well as consumer preferences in gen-

eral, through a series of studies. These include

anthropology, population, preferences, which

enables us toconcentrate on offering alterna-

tives to their daily needs.

HOW MUCH TIME DO YOU NEED TO

DESIGN ANEW PRODUCT?

It depends on the product, bu t generally it

takes six mo nths to one year. However, pro -

jects that involve new production processes

can lengthen the time to two years or more.

WH AT IS THE SECRET OF SUCCESS FOR

A NEW PRODUCT IN A FOREIGN MAR-

KET?

Mainly, it's whatever pleases the consumer...

good flavor hat m eets high standards of qua-

lity aswell as expectations. One impo rtant

factor is that itmust represent a value offer for

the consumer.

HOW HAS THE COMPANY ADAPTED

THROUGH THE YEARS TO SHIFTING

TRENDS IN EATING HAB ITS? FOR

EXAMPLE, THE PROMOTION OF LOW-

CALORIE FOODS AND THE DEMONIZA-

TION OF FLOUR INSOME CIRCLES.

We are in the vanguard of the new consumer

trends. Specifically, we have wo rked intensely

SPECIAL ADVERTISING FEATURE

ACE Group is one of the world's lorgest insurance and reinsurance

providers. We offer a great variety of products to clients around the

world; from large multinational corporations, to clients in local markets,

and individuals covered by personal insurance. With more than 15,000talented anddedicated employees, ACE has a physical presence in 53

countries and commercial and individual customers in more than 170,

you can feel confident in the support offered by ACE.

ACE Seguros, headquartered regionally in Santiago, Chile, includes

business operations in Argentina, Brazil, Chile, Colombia, Ecuador,

Miami, Mexico, Panama, Peru, and Puerto Rico.

To learn more,

visit usat aceseguros.com

insuring progress"



MEXICO

The company history in three images. The effort to reach every Mexican town by road and river;

and the vision of the founding fathers : R.Servitje, J.Jorba, L. Servitje, J. Sendra y J. Mata.

to improve the nutritional profiles of our

products. In 2005, Grupo Bimbo launched a

campaign to promote consumption of whole

grains, offering enriched products which had

the seal of approval of th e Whole Grains

Council, a non-profit consumer defense group

that works to improve health by promoting

consumption of grains.

FOOD SECURITY IS A NEW CONCEPT IN

WH ICH YOU ARE INVOLVED.

Grupo Bimbo has stated its commitm ent

regarding one of the most diíEcult issues tha t

faces the world since the beginning of this

century by joinin g forces with other global

companies, including the large players, to ana-

lyze and find solutions through the Food andNutrition Security Group of the B20 (*).The

recommendations of the Food and Nutrition

Security Group have as a common goal to en-

courage the participation of the private sector

and to achieve better coordination among all

interested parties, to accelerate and apply na-

tional security programs in diet and nutrition.

EXACTLY WHAT DO THESE

PROGRAMS DO?

We have been working on this issue, analyz-

ing causes and effects, since 2011. This year,

as C E O of Grupo B imbo, I was invited to

be co-president of the B20's Food and N u-

tritional Security Working Group . We have

placed real comm itments on the table through

which the sectors represented by the working

group plan to increase investments in agricul-ture and also help attain the objective of rais-

à à W e are in the

vanguard

of the new

consumer trends.

Specifically, w e

have worke d

intensely to

improve the

nutritional profilesof our products. ^ ^

ing production and productivity by asmuch

as SO percent by 2030. (NB: The B20 believ

agricultural productivity must increase by 50

percent by this date to be able to respond to

the challenges of nutritional security).

The increase in productivity must offer fo

and nutrition security for everyone in a way

that is environmentally sustainable, ensures

economic growth and improves the m eans o

subsistence and revenue for producers.

RETURNING TO THE MARKETS YOU RE

OPERATING I N, WHICH REGION OF THE

WORLD DO YOU EXPECT WILL PROVIDE

THE GREATEST SALES GROWTH IN THE

MEDIUM TERM?

In percentage terms, Latin Am erica is the re

gion that vsoll provide the highest growth as

result of our initiatives to increase penetratio

and distribution, mainly through traditional

channels. In Mexico we hope to continue

the growth trend of the last two years. In th

United States, the results will refiect the in-

corporation of recent acquisitions.

DO YOU ANTICIPATE MORE PURCHASE

FOLLOWING THE BUYOUT OF SARA LE

IN THE UNITED STATES AND ITS

OPERATIONS IN SPAIN AND PORTUGA

WHICH MARKETS INTEREST YOU?

W e w ill focus more on the integration o f



MEXICO

Grupo Bimbo entered the Chinese nnarket in May 2006."So far our efforts have been fruitful," says Servitje.

Sara Lee over the next few years. We need to

achieve the synergies that we're anticipating

from the new B imbo Bakeries USA . We want

to strengthen profits in the markets in which

we currently have a presence.

WHAT IS BIMBO'S MANAGEMENT

STRUCTURE IN THE DIFFERENT

COUNTRIES WHERE YOU OPERATE?

We operate through eight organizations,

which are: Bimbo SA, Barcel SA, Bimbo

Bakeries USA , El G lobo, Latinoamérica Sur,

Latinoamérica C entro, Bimbo Asia, and most

recently Bimbo Iberia. The management com-mittee of each country is made up of local and

international teams.

WHAT SURPRISES DID YOU COME

ACROSS IN THE CHINA OPERATION?

Grupo Bimbo entered the Chinese market in

May 2006. Our objective in that country con-

sists of a long-term plan that represents a source

of important growth for the group.

We are learning as quickly as we can how

to infiuence C hinese consumers and convince

them to try new products and consume them.We wan t to become a relevant player for pack -

aged bread in China, increasing per capita

consumption and enhancing penetration of our

products. So far our efforts have been fruitful.

WHAT W AS THE KEY TO ENTERING

CHINA?

Entering China was undoubtedly a huge cha-

llenge for our company. Right from the start

we took into account the natural differences

that exist between one country and the other,

including language and culture, so as to adapt

our ways of working.

Our long-term vision and openness to

change were among the most important fac-tors. We were firm in remaining faithful to

our values and philosophy while being fie-

xible in adapting to a new culture th at we are

constantly learning. The local leadership and

talent have been essential to our development

in tha t country. The m ixing of, and interaction

between, the two cultures has been a mutual

learning process that enables us to understand

the market and facilitate problem solving.

AND IN TERMS OF PROCESSES?

In terms of processes and metho ds, we havefollowed the same plan we use in other re -

gions, adapting to the language and ways

of communicating. I'm referring to th e IT

systems, enterprise resource planning, repor

crucial processes of methodology in market

ing, operations and adm inistration. We have

been adapting w hile respecting the local sta

dards and laws.

BIMBO HAS A PLAN TO GENERATE

100 PERCENT OF THE ENERGY IT

CONSUMES IN MEXICO. HOW IS THIS

PROJECT COMING ALONG?

DO YOU HAVE SIMILAR PL AN S

IN OTHER COUNTRIES?We hope to start up operations at the Parqu

Eolico Piedra Larga (Piedra Larga Wind

Park) in the second half of 2012, dep end-

ing on climate conditions and the physical

progress ofthe works. The park will compr

45 wind generators with an installed vnnd

potential of 90 M W The wind energy we

generate there vn]l supply the annu al elect

cal consumption of 65 Grupo Bimbo insta

llations (production plants and other opera

ting centers). It wall be the highest conversi

of renewable energy in the food industry inthe world. El



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Interview With CEO of Grupo Bimbo

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