MILK IT

Costa Rica 2017 | AGRICULTURE | VIP INTERVIEW

TBY talks to Gonzalo Chaves Alvarado, CEO of Dos Pinos, on the benefits of being a cooperative, expansion plans, and the Gallito acquisition.

What strategy are you following to maintain Dos Pinos' leading position?

Dos Pinos is an icon in Costa Rica and is its most valued brand. Dos Pinos was formed 69 years ago by 25 small farmers. At that time, the visionary shipment was an important thing for the country because we were the first cooperative in Central America to implement the pasteurization of milk back in the 1950s. We began to provide health and nutrition for our children and to our consumers, which is why Dos Pinos is what it is now. Since the beginning, we innovated, invested, and provided added value for our customers through healthy products, as well as increased the wellness of the population across Costa Rica. To strength and maintain our leading position we have focused on our consumers, making sure we are satisfying and accomplishing their evolving needs. This will be driven by passion for innovation in order to be able to provide good and fresh news to the market permanently and all of it supported by a culture of operational excellence and efficiency. This is the foundation of our current success.

What is the importance of Costa Rica for the whole group?

Dos Pinos is the most important milk producer in Costa Rica, and we are the absolute leaders in the local dairy industry. We are not only milk producers, but we are also a cooperative that is owned by 2,000 people (1,400 farmers and 600 employees), most which are SME milk producers, which is very important because as a cooperative the most important goal is to provide the benefits to our associates. Given the fact Dos Pinos has also been investing in technology and equipment distribution, we are the most powerful force of distribution in the country in the dry, frozen, and cold environments, and we have the three types of distribution force in Costa Rica as well as throughout the region. Dos Pinos provides employment for more than 4,500 people in the Central American region and generates more than 50,000 indirect jobs given its massive operations in Costa Rica and the region as well. Our business size is equivalent to the 1.7 % of the GDP of our country.

What is the importance of Costa Rica for the group, and what are your expansion plans?

Central America and the Caribbean are our most important markets, though we are always open to review and take advantage of any opportunities that may arise. We focus especially on Central America and the Caribbean because we believe that we have the space to grow there and to provide health and nutrition to the populations of those countries. We are ready to enhance and increase our market participation in Costa Rica and the region.

What other non-milk products is the company considering to offer?

Our strategy is to transform our dairy business, keeping it always at the core of the cooperative but moving toward a food industry model, including activities in beverages and snacks as well as some other types of food products that create a synergy with the facilities and capabilities that we have now.

Can you describe the process of acquiring Gallito?

Gallito is an important achievement for us, and it is a strategic investment that we are doing. Dos Pinos and Gallito are well-known brands in Costa Rica, and together they generate synergy and make a powerful cocktail for the benefit of our customers. Dos Pinos has decided on a strategy based on three main principles. We are always looking to satisfy our customers or consumer necessities, and it is based on this that we design products, innovate, and invest in order to provide this innovation to give fresh news to our customers. All of this is founded on a platform we call operational excellence, in which we try to be efficient and maintain the lowest costs possible in order to provide competitive products to our customers.

What are the main initiatives that Dos Pinos is taking toward environmental and social responsibility?

Social responsibility is in our DNA as a cooperative, as we have 2,000 owners and most of them are small and medium-sized farmers. We have several specific programs in terms of recycling packaging materials, and we produce some raw materials for the building of desks for schools. This is a successful program, and we have produced and donated more than 9,000 desks for public schools in the country. We have an important nutrition program in the schools, whereby we visit the schools and talk to the children about healthy food consumption habits, how to balance their diet, and how to balance nutrition in order to leave a healthy life. Those things are important for us. We are also involved in other important initiatives, such as food banks, which provide food to people without shelter or living in social hardship. We believe in social responsibility and we really live it and practice it.

To which markets is Dos Pinos exporting the most, and are you planning to open in more markets?

We are most concentrated in Central America and the Caribbean. From Costa Rica we are exporting mostly to Guatemala, Panama, and the Dominican Republic, followed by El Salvador, Honduras, the US, and the rest of South America, with something even in Venezuela. Generally speaking, other than Costa Rica those are the most important countries for us.

Costa Ricans consume an average of 200 liters of milk per capita each year, which is the third most in Latin America. With this figures increasing every year, what is your medium-term vision for the market?

There is always an opportunity because innovation is always something that will provide an opportunity to bring back to the table and to the customer new offerings. This is why we believe that innovation is one of our most important elements to maintain and enhance, as it is the only way we see to find new customers for our products. We believe that the market could still grow, and we are also diversifying our business as we did with the beverage plant. We believe that these combinations of strategies will provide us with the necessary force to grow our business in the long term.

What are your goals for 2017?

Our priority is to continue to grow and strengthen our leadership in the Central American market. We will defend what we have grown in Costa Rica, but we are also diversifying our portfolio by providing value added products to our customers. We will continue working every day in line with our strategic objectives: diversification, innovation, profitability of farms, sustained growth in core business, and organizational excellence for our business in Costa Rica and the rest of the region.