TBY talks to two executives about the food and beverage market in Mexico and their local production facilities.
How would you characterize your presence in the local market?
JUAN CARLOS MARROQUÍN We have pioneered many new development models in Mexico, as well as several network partnerships and programs, showing our strong commitment to this country. Because of its geographic location, connectivity with its neighbors and positive demographics, Mexico is a strategic market for Nestlé as well as for any global company that wants to expand its presence in the Americas. Also, the political and economic stability of the country are two crucial elements that make Mexico attractive for our company.
PEDRO PADIERNA We have been present in the country for more than 100 years. We began with the Pepsi beverage and later we began to acquire many kinds of businesses. We also bought food companies, such as Sabritas and Doritos. We cover a great number of brands—from soft drinks to water, and from snacks to nutritious products. We are present in every corner of Mexico.
What level of investment is Nestlé looking to make in Mexico, and what areas will receive the most attention?
JCM We maintain very high investment rates in order to remain competitive in the market. Nestlé Mexico is presently known as the best company in the food and beverage sector, and is recognized as a leading company in nutrition, health, and wellness. Competitiveness is a crucial factor for the development of every business, and we focus strongly on the competitiveness of our products. We want to maintain our leadership in the sectors we are involved in, and we can do this by investing in technology, improving industrial processes, and reducing the environmental impact of our production.
What has PepsiCo done in order to transform its portfolio in Mexico?
PP Over the years, we have worked in many different areas. For example, we have substantially reduced the amount of sodium in our products. We studied the size of a grain of salt and how that affected the flavor. You need only 30% salt to deliver a taste boost. We have created micro graining technology that allows us to use less salt, but maintain the same taste. We are also using more and more baked products. We have stopped using trans-fats completely. Instead, some positive additives to our foods include fiber and fruit.
What are some of your objectives in Mexico?
JCM The first objective is to increase Nestlé’s global business, which means that we should generate a sustainable organic growth rate between 5% and 6% annually. We can achieve this through our strategic development plan that focuses on improving our brand penetration and talent pool. We are also very interested in rural development because it is related to our business. Therefore, the second target is to improve general production capabilities and increase the quality of our agribusiness activities. The third target is to be perceived by the consumer as a world leader in nutrition. Our last goal is to address sustainability concerns in all areas of our agribusiness processes.
PP The first program that we implemented was with corn. Corn as a commodity had a stable price, but its quality was unpredictable. We were forced to take whatever corn was available. So we decided to select a community in Guadalajara. We wanted to propose the same basis with hybrid seeds and a technical package. This community had the idea of growing corn, but didn’t know how to do it. They had no access to credit, but through intermediaries they received microfinancing. The program has been a tremendous success. Growth rates have risen from 2.5 tons per hectare to approximately six tons per hectare. We have 240 growers, and they have become almost like a cooperative.
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