A FIRST FOR EVERYTHING

Mexico 2018 | AGRICULTURE | VIP INTERVIEW

TBY talks to Paolo Cornero, Director General of Ferrero México and Central America, on straddling the continental divide, discovering new raw materials, and meeting the highest social and production standards.

What is the strategic importance of Mexico for Ferrero's regional plans?

The plant we established in 2013 has four lines: Kinder Sorpresa, Kinder Chocolate, Kinder Delice, and Nutella. It also contains the first research laboratory on the American continent and outside of Europe, which demonstrates how vital Mexico is. The new facility cost USD200 million and serves the Mexican market, though it also has a strategic position for Latin and North America. We also want to explore certain new Mexican raw materials and use them to improve existing ones. Mexico is top 10 in the field of invoicing within the company. Furthermore, its culture straddles North and South America and therefore has aspects of both markets. What works here could also work in other countries.

Ferrero is committed to using 100% sustainably sourced cocoa by 2020. What challenges are you facing to reach your target?

We already have 100% sustainable palm oil production and 60-70% for cocoa production. We want to boost the latter figure to 100% by 2020. To do so, we want to find suppliers with strict quality and work standards because we seek to integrate environmental protection with decent work without human exploitation. We want to send our experts periodically to audit suppliers and help them meet these social and production standards.

Ferrero Mexico expects double-digit sales growth for 2018, an ongoing trend for the last several years. What factors are behind this?

Ferrero has excellent products and competent personnel in terms of professional training and ability to work with others. We want to create a company where knowledge, accountability, and empowerment form the basis and only increase with time. On the other hand, we have a product that sees great demand. Behind our desired products, there is a research effort to understand the needs of the consumer. This manifests the respect we have for consumers' preferences.

What future investments do you have in the pipeline for the country?

The projects are confidential, though we are exploring the possibility of extending our local production capacity. We are analyzing whether it is appropriate to do it now or wait a few months. We also have a development plan for the business in Mexico, and our existing plant may grow in production in the coming years.

Nearly half of your local production is exported to the US and Canada. How might NAFTA renegotiations impact your export strategy?

We must comply with government decisions. We are definitely in favor of NAFTA and would be pleased if a favorable negotiation is achieved. Otherwise, we have our Plan B—one must always be prepared. As a resilient company, Ferrero has to be ready to face crises, as it has done in other markets in the past.

What is your outlook for 2018?

We want to stabilize the launch of Kinder Delice Strawberry, which got off the ground in September 2017. The first months are chaotic because it entails execution, consumer perceptions, and other variables that complicate the process. The first months after the stabilization period help us understand the potential of the project and what does and does not work. We want to continue to grow as a product, conducting tests on possible future releases for the coming years. After the earthquake, we were worried about our Mexican people and what we could do to help them. We are in the third phase of a project to bring hope to our Mexican brothers. With the money collected during our Christmas concert, in addition to an amount the company will donate, we will support a reconstruction project.