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Panama 2015 | INDUSTRY & MINING | INTERVIEW

TBY talks to Iván Saldaña Varela, Managing Director of Cervecerias Baru, on the history of the company, expanding in the market, and responsible drinking.

Iván Saldaña Varela
BIOGRAPHY
Iván Saldaña Varela was born in Spain and raised in Puerto Rico. He graduated from Villanova University in the US, with a BSc in Mechanical Engineering. He holds a Master’s degree in Manufacturing Systems Engineering and an MBA. Before moving to Panama, he had many years of international experience working for Arthur D. Little in Madrid, Pepsi Co., and Heineken in Amsterdam.

Cervecerías Baru Panama was launched back in 1960. What has its growth strategy been since then?

Baru Cervecerias Panamastarted as a family business in David in 1960 brewing local beers such as Cristal, Panama, and Soberana. In 1970, the company began operations in Panama City and in 2002 we, at Heineken, acquired the business for the Vallarino family. At the time, the company's market share was about 12% and the plant capacity and conditions were poor. Since then, Heineken has been investing in this country, in the company, and professionalizing operations to grow our business

In that regard, how much are you investing in human capital?

For us, training is about growth. It is about growing as an individual, it is about growing as a team and it is about our motivations to improve. It is important for the staff to feel proud of the company they work for. Last year we provided over 7,000 man-hours of training across the company. However, more can always be done, and our 350 employees undergo yearly trainings. We also work to customize training and improve the functional and leadership skills of our staff.

On production, you mentioned water's critical role, but where do you source hops?

We source most of our hops from Europe. We have global contracts organized by Global Procurement, which treats it as a commodity; it is a sophisticated purchase.

Panama and Latin America in general is brimming with competition. What is your strategy to widen your share of the market?

Competition is tough, as our local competitors are both strong and focused. Over the past years we have grown at impressive rates, as has the beer industry, but our own growth has outperformed the beer market average. The beer market grew over 5.5% in 2014, while Cervecarías Baru saw double-digit growth. We produce an excellent high-quality product, but continuously work to improve it. As a result, we have won five gold medals on our PANAMA brand granted by Monde Selection, a leading European institute that certifies the quality of consumer products. At the end of 2014, we launched Panama Light, which is a star product. It is a great product and moreover, the only locally produced light beer; as opposed to the rest of the market which commercializes American brands. This is naturally a source of pride for us. In 2014, we launched Soberana Radler, which is our Soberana beer with a spark of natural lemon juice. Hence, quality and innovation is and will be our growth pillars on the coming years.

The Minister for Health is promoting a healthier lifestyle and stricter law regarding DUI. What kinds of market opportunities are presented here for non-alcoholic beverages?

Beer is a natural product and stands out amongst all alcoholic beverages on the market. Beer is fermented; it is not a distilled alcohol, which makes a huge difference in terms of how your body absorbs the alcohol. Beer has a low level of alcohol, usually between 4 and 5 degrees, and in Panama, beer is mostly consumed for all types of celebrations and social gatherings. We are highly conscious about promoting responsible consumption and there are many ways in which we do this. One such way is to invest in lower alcohol and non-alcoholic beers, such as Soberana Radler, which has a 2% alcohol content but a very refreshing taste. It is a risky investment, but one well worth it.

What are the main targets, goals, or ambitions that you hope to achieve by the end of this 2015?

The year of 2015 bears numerous challenges. My major concern is listening to consumers and understanding their needs. In that spirit, innovation is critical. Meanwhile, we have signed a major five-year sponsorship agreement with our PANAMA brand and the FEDEBEIS, the Panamanian Baseball Federation, in a program to foster and further develop baseball as the national sport it currently is. At Cervecerias Baru we strive to surprise Panama and the rest of the world with our brands, people and performance.