50% OF EACH CAD BOTTLE IS MADE OF RECYCLABLE MATERIAL

Colombia 2018 | INDUSTRY | VIP INTERVIEW

TBY talks to Miguel Fernando Escobar P., CEO of Postobón, on the firm's portfolio, priorities for 2018, and the difficulties of doing business in Colombia.

How has Postobón evolved since its establishment and what has been its role in the development of the country?

2018 will be our 114th anniversary and we continue to be one of the most successful private companies in Colombia. It is clear in our strategy that in order to achieve growth, we have to support the growth of the country, including that of the population. As a result, our business knowledge base is nationwide and we have an intensive footprint both in manufacturing and distribution. Postobón made a decision to change and expand its portfolio, and have thus been working on a multi-category concept that covers above and beyond what we have done in the last 114 years. That is the reason why we are investing in beer market and have signed a JV with a Chilean group, CCU, to invest in Colombia. We are now taking a step forward to penetrate the beer industry, which is a great opportunity for us. We are also trying to understand the kinds of opportunities we can tackle based on our knowledge of logistics and distribution and our capacity to build brands and categories.

Can you tell us about the main initiatives the company is taking to reposition itself?

We understand the market trends. Innovation is a must be for us. Everyday work in I&D to reconfigure our beverages. Our portfolio is truly varied and we really do not depend at all on just CSDs. 50% of portfolio sales are low-calorie or zero-calorie products. 30% of our portfolio consist of zero-calorie products and any products that grow the most are not related with carbonated soft drinks (CSD). Obesity in Colombia has many different reasons; however, the per capita consumption of CSDs in Colombia is low compared to other countries and blaming CSDs for obesity is unjust. We have conducted studies by independent and esteemed consulting companies that have shown sugar from CSDs is less than 2.5% of the total sugar intake of Colombians on a daily basis. We are confident that regardless of the regulations—which we welcome because it is necessary—we are in a great shape.

In 2016 Postobón registered 14% growth. What is the strategy behind this growth?

The strategy is simple: we work every day to conquer the hearts of Colombian consumers. It is our inspiration for the company. The reason why we have had double-digit growth in the last few years is because we have a great variety of portfolio, especially in terms of options, so we are able to understand all the segments, from value to premium. We have all types of products for all types of consumers in every category. We never increase prices and work hard to design great products for every segment of the population.

What are your main goals and priorities for 2018?

2018 will be a challenge for Colombia because we are in the middle of a political situation that is extremely complex. The government is working hard to settle the peace process and there is a great deal of confusion around that. Therefore, 2018 will not going to be an easy year in terms of consumption, though we are optimistic that we will keep the peace process in great shape and that there will be healthy growth for us.

Do you plan to establish new partnerships or expand into different markets?

Postobón is a local company and most of our income comes from our sales in Colombia. We have been working to understand opportunities abroad into the natural market for us, namely within the region, and not Europe. However, there is a market that demands our products and this is the reason why we have agreements with European distributors. Our focus is more on trying to capitalize on opportunities within Central America and neighboring countries in South America.

Can you tell us about your goals for making the company more sustainable?

In terms of sustainability, the economic portion is fundamental, though we also have social programs with the community. The environmental sector is fundamental to us because we are sell and put packages into the industry every single second of the day. We have a large truck distribution system and a great focus on packaging and transportation to reduce our carbon footprint. In packaging we use different elements such as glass, plastics, Tetra Pak, and so on and have a solid program to use recycled content in every single package or bottle that we use every day. Today, our bender of glass can guarantee that at least 40% of every glass bottle that we use is recyclable. We continue to make investments with our PET suppliers to continue to increase the percentage of recyclable material in every bottle. Today 50% of each CAD bottle is made of recyclable material, and Tetra Pak is doing the same. With Tetra Pak, we use different alternatives to recycle and produce, for example, furniture for schools and so on, especially because we have an aggressive agenda for 2024 in terms of our environmental reduction without carbon footprint. On the transportation and distribution side, we have many trucks on the streets and we want to continue to take steps forward to reduce our carbon emissions. We already have low consumption fuel trucks and electric vehicles and will continue to add more electric ecofriendly transportation systems.

What is the main benefit of doing business in Colombia?

We struggle every day to make institutions more solid. It is a great country with close to 50 million people and the middle class will continue to grow. About 30-40 years ago Colombia was poor, with small provinces across the country. Today, the country is making great progress. Progress could be faster though we are optimistic that Colombia will be great, which is why we continue to invest and believe in the country.