May. 19, 2021


Carlos Ignacio Gallego

Colombia

Carlos Ignacio Gallego

CEO, President of Grupo Nutresa

“Sustainability enables us to flourish in a volatile and competitive environment.”

BIO

Carlos Ignacio Gallego is a Civil Engineer with a Master's in business administration. He was born in Medellín in 1964, and has worked with Grupo Nutresa since 1991. He has held, among others, the position of Head of Production, Industrial Vice President, and President of Servicios Nutresa prior to his current position. He studied at EAFIT University, and has a Master's in business administration from the same institution. He has also completed various graduate programs at Harvard, Northwestern, and MIT, focused on strategic business management.


What are Grupo Nutresa's main business development ambitions for the short and mid-term future?

In 3Q2020, Grupo Nutresa revealed its strategic plan 2020-2030 to the investment community. It is a plan based on the expectations and needs of various interest groups, an in-depth analysis of risks, trends, and global issues, such as the UN Sustainable Development Goals. Furthermore, the plan centers on identifying those key aspects that the company wants to develop. Our main ambition is to double the company's sales by 2030 by focusing on three key issues: environmental care; innovation and human care; and profitable growth and strengthening our brands. This ambitious goal has a competent and committed team behind it, together with an environment that includes the participation of stakeholders, and that is the result of a multilatina company. However, although Nutresa is founded in Colombia, international sales account for 40% of its total income. In addition, it is an extremely innovative company. In fact, in 2020, 19.6% of its total sales were sales from innovation.

What factors explain Nutresa's strong market performance in 2020?

In 2020, despite the adverse circumstances, we experienced 11.7% growth. This growth is the result of a combination of organic and inorganic growth. Over the last decade, Grupo Nutresa has experienced 66% organic growth and 33% inorganic growth. In the latter, we are still developing our activity and pursuing new opportunities for improvement. This growth was mainly driven by a proper management of our portfolio. Nutresa has always been committed to understanding the needs of its customers and consumers in order to customize its portfolio according to their priorities. That said, the strengthening of the brand made us more attractive and a first choice for consumers. Last but not least, this development is also due to the many different means of reaching the customer, such as alternative channels, food services and experiences, restaurants, access to traditional channels, retail shops, and so on. To sum up, it was the combination of all these factors, plus innovation, that helped the company to reach its current sales level.

In what ways has the company had to adapt due to the pandemic?

Nutresa has always focused on enhancing certain key capacities, such as innovation and change management. Taking that into account, we have made a number of advancements and adjustments to our activities. These include implementing new technologies, increasing our adaptability in order to be more flexible and less traditional, and so on. Innovation plays a fundamental role in all this. It is not only about product innovation, but also processes, services, and business model innovation. Our best example of innovation and adaptability to the pandemic is related to our restaurant services. Prior to the lockdown, our restaurant services amounted to 12% of our total sales. However, although sales dramatically dropped due to the lockdown, we were able to take control of the situation, and by April we were back to selling 40% of our products. This is due to our swift reactive response. For example, we created our own call center, those who worked in our restaurants were switched to delivery service, and we boosted our digital channels. We sent the rest of the staff home, while keeping their jobs intact. At Grupo Nutresa, no one was laid off because of the pandemic. In fact, we finished 2020 with more employees than at the beginning of the year, all thanks to the rapid innovation, which helped to propel a steady recovery. Nutresa adapted its portfolio in order to provide the services the consumers needed, especially during the pandemic. For instance, our portfolio now includes personal care products, such as facemasks and hand sanitizer.

40% of Nutresa's sales come from outside Colombia. Which strategy made international expansion successful?

Nutresa takes a broad approach to internationalization. Internationalization implies having access to FDI and having distribution networks or plants that supplement the ones we currently have in Colombia. In addition, it also implies having access to raw materials in a competitive manner and new technologies that are globally available. Internationalization is not just about exports, but also includes imports. We have followed this approach for many years now, and it has given us extremely solid results. In fact, over the last 20 years, Grupo Nutresa's international sales have experienced an annual growth of between 15% and 16% compared to an annual growth of about 8.5% in Colombia. In 2020, Nutresa's board of directors decided to approve the construction of a new multi-category plant in Santa Marta. This project, known as C3, involves an investment of USD133 million. It will serve different food categories and aims to export 70% of its products and services. We are also working on a project within the Pacific Alliance that would allow the four countries to join forces in order to have access to more developed markets, specifically the US. This would create more jobs and generate taxes in each of these territories.

How is commitment to the development Colombia a core component of Nutresa's DNA?

The company is governed by a board of directors that believe in its business project and want to generate economic, social, and environmental development to its shareholders and the society. This has allowed the company to initiate projects such as the one in Santa Marta. In 2021, we disclosed the figure of COP430 billion, which will be used for the completion of this plant, so operations are likely to start by 2Q2021. In this case, support from the local government is key. Fortunately, we have received full support from the Ministry of Trade, Industry, and Tourism regarding the monitoring of the key aspects of the project in order to facilitate procedures and so that the company can access certain benefits that any national or international client can have access to; however, there are some internal challenges in terms of the development of different activities and the construction of ecosystems around these new plants so that we are able to collaborate with local suppliers, the academy, other business customers, among others. The objective is that companies are profitable while they become key players in regional and national development.

What sets Nutresa apart in terms of sustainability, and which campaigns are noteworthy?

Sustainability enables us to flourish in a volatile and competitive environment. That is why we are committed to its development and to including it in our strategy. Therefore, it is much more than just a campaign. Last year, we were recognized as the most sustainable food company in the world by the Dow Jones Sustainability Indices , and we were presented with the gold medal in the Sustainability Yearbook, powered by Standard & Poor's. The Sustainability Indices include nearly 25 evaluation factors, and Grupo Nutresa was the best in 11 of them. For example, we were leaders in attracting and rewarding talent, social reporting, water-related risks, environmental reporting, and more. Economically speaking, we were the leaders in five areas including matters such as risk management. We were also leaders in information security and cybersecurity, nutrition and healthy lifestyle, and tax strategy, which is related to transparency. Nutresa is extremely proud of these achievements, and it is proof of what Colombian entrepreneurs can achieve.

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