115 YEARS IN OPERATION

Colombia 2020 | INDUSTRY | VIP INTERVIEW

TBY talks to Miguel Fernando Escobar, CEO of Postobón, on 115 years in operation, social media investment, and consumption trends.

What have been the determining factors that made Postobón remain a leader in the Colombian beverage industry since its establishment?

Postobón has been in the market for about 115 years, operating in Colombia, and has had a clear passion and agenda based on innovation. We have been bottling and packaging different products that today are considered “new age” but, for us, are centenary products. Our success has been based on innovation, products, flavor, packaging, distribution, and our market channels. We have a solid distribution system that helps us to continue building our leadership and multi-category platform. That is why we consider our leadership strong, and we will continue in the same way in the coming years.

What does it mean to be recognized as the best bottling company in Latin America by PepsiCo, and what is your strategic alliance?

We are proud of it. Globally, we were awarded as the best in Latin America. We then competed in an open discussion with PepsiCo about its global franchise program, and it awarded us best in the world. It is not that we are the biggest; we are the bottler that performed the best during the year with execution, innovation, and an agenda of digital transformation. We have a robust relationship with PepsiCo, as we are closely aligned with its brands. We have our own brands but we have the franchise, and PepsiCo recognizes Postobón's great execution of its agenda.

You also have an agreement with United Brewing Company (CCU) Chile. How strategic are these agreements, and are you looking for further future alliances?

Back in 2016, we signed our agenda for the future where we clearly defined that we will convert this company into a multicategory company, beyond the traditional soft drink products we have sold on the market. We wished to penetrate with different products, like beer and malt. With our own new brands, like Andina in beer and Nutrimalta in malt, we decided to go with this big venture with CCU in a 50-50 partnership. We are making progress every day according to our objectives. We will continue making more investments through that industry to really achieve our large long-term objectives. We are open to continuing to explore new opportunities because the multicategory is far beyond what we used to do and far beyond beer and malt. We have a huge platform and a powerful distribution network that we want to continue to take advantage of and capture value in the market.

What role does innovation and technology have in your production process?

Everything is based on those two concepts. Innovation has to be present, and whatever we do has to have innovation in its DNA. We will not have a “copy-paste” of a product. Innovation and digital transformation will play an integral role in the future of this company. Digital transformation is happening today in our company, and we are making important capital investment behind that agenda. Hopefully, in the near future, we will conquer new markets based on technology. That is a fundamental part of our agenda today, and every day it will be more relevant.

Can you comment on your distribution model and new countries that you want to reach in the future?

We defined our strategic program to make a leap on the international side. We do export from our operations in Colombia, but also have a franchise in North America that bottles and distributes for us. We also have the same model in Spain, with a partnership with a different company that bottles and distributes across eight countries. We also export from our operation close to the ports in this country, but that is not enough. We need to be more aggressive and have a solid agenda for a larger presence in the international agenda. We are willing to go far from home but need to understand our capabilities and how we can operate, so our investments will be more focused within the region, to continue exploring and working on the different segments that we can attack and develop.

How do your social responsibility actions contribute to the development of the country?

The Ardila family that owns and controls this company has had a crystal-clear agenda on the social side, and we have been carrying it out for many years. It is a relevant agenda for us: everything we do socially and how we interact with the communities in many different ways is a clear instruction from the shareholders and from the board to us. That is because we have programs to support different agendas in different regions to help people to grow with our company. In 2018, we invested close to USD6 million in social media programs.

What is your outlook for Postobón in the coming years?

We continue to be optimistic and believe Colombia is a great place to invest. Consumption is moving forward in this country because, as much as this country continues to reduce poverty, with people moving from poverty to middle class, we see consumption of many different products expanding. This will continue to happen in the near future, and we want to capture that opportunity. We want to continue to invest. We have a robust capital investment program through which we will continue investing in the country, expanding in capacity and distribution. We can continue expanding with double-digit growth for the company in the near future.