Heir to a Dynasty
November 1, 2007
Heir to a Dynasty
To be the leader of an international company isn’t an easy task. It demands tenacity, vision, preparation, experience and a lot of work. It also requires a big dose of integrity to direct the destiny of a business so that it’s both honest and clear.
It also requires a sense of humility, especially when your father and uncle, Lorenzo and Roberto Servitje, are pioneers in the industry. In fact, these two men are so renowned that they were among a select few to be inducted into the 2007 Baking Hall of Fame class by the American Society of Baking.
However, Daniel Servitje-Montull — Grupo Bimbo’s current chief executive and son of Lorenzo, who founded the company 60 years ago — is living up to the reputation set by its founders. With 25 years of uninterrupted work in the international baking industry, Servitje today knows the $5.88 billion company like the palm of his hand.
When he was barely 17 years old, Servitje began working for Bimbo during his summer vacations, under the guidance and example of his legendary father and uncle. From them, he inherited a profound commitment to Bimbo and Mexico, as well as a series of rooted moral values that have been the pillar of the company throughout the years. Even while attending college, he worked work part-time for Bimbo, until he left the country for a couple years to study in the United States. Upon his return in 1987, he rejoined Bimbo, transforming himself little by little into a key figure — someone who is inseparable from the company’s recent history.
As head of Grupo Bimbo — a position he’s held since 1997 — he strategically guides the largest baking company in Mexico and one of the largest in the world. Today, Grupo Bimbo employs 84,000 people worldwide and operates in 16 countries throughout North American, South America and Europe. It currently is exploring the possibility of expanding in India and China.
The vertically integrated company operates 74 plants that produce about 5,000 baked goods, snacks, candy and more under more than 100 international brands. In Mexico, Grupo Bimbo commands about a 90% share of the market. Its 31,900-route distribution network — the most extensive in the country — takes fresh products to more than 1 million points of sale in some of the most geographically diverse areas of the world.
For Servitje, “there isn’t any normal day of work,” but instead, a succession of activities, meetings and obligations that he accommodates and organizes as the situation necessitates. “I try to plan all of the activities that are important to the direct management of the company for the large part of the year, and I also look for time to visit our operations and have a direct relationship with our clients,” he points out.
A large part of his time also is dedicated to visiting the market, talking with sales representatives and supervising the diverse businesses that make up Grupo Bimbo. His favorite moment is meeting with customers, when he is able to detect opportunities that present themselves in each one of the markets and explore new business ventures.
Although he recognizes that Grupo Bimbo is a company with a long-term vision, Servitje notes that the business must annually readjust its mission and goals to reflect the reality of the times and the circumstances of the market.
Three years ago, for instance, the company’s biggest challenge involved a complete reorganization, including changing how it monitored internal operations such as its information systems, with the end result being a simplification of the entire structure of the company and implementation of a profound segmentation of the sales venues.
“Everything involved much simultaneous changes in an environment that was particularly difficult in these moments, Servitje says. “The large acquisitions we made were only accomplished through the belief and trust that our workers had in our company to take us ahead. Fortunately, we were successful.”
In his opinion, Grupo Bimbo’s weakest link was being able to gather information in real time.
“We were always a company that was very focused on the market. the customer and [providing] service with a deep distribution in all types of channels,” Servitje says. “We continued to foster this, but there were also other parts which were not as well-cared for, and for that, we needed to work on through five or six fundamental pillars, which today have permitted us to have a company with production indicators of high performance. They were a couple of difficult years, whose effects were reflected in important financial achievements and of our participation in the world market.”
In Mexico, as in Central and South America, Servitje notes, the company faces distinct challenges from what U.S. bakers typically encounter. Those challenges vary from market to market.
“Grupo Bimbo has a presence in many distinct markets, and each market lives in different moments. In some countries, the challenges are more in distribution,” he says. “In others, the challenge is in the promotion, because bread products are not in the habit of adapting to the habitual diet of certain societies. In the most mature markets, like the North American market, the challenge is most in the tendencies of the moment. The development of food processing technology has helped Grupo Bimbo to respond to these dynamic styles of actual life and the changing demands of consumers.”
In the United States, he adds, the industry is in a much better state than it was during the low-carb craze. The trend toward health and a balanced diet means good news for companies like Bimbo. On the other hand, Servitje is concerned about the rising cost of energy, commodities, health benefits and overhead, and the inability of many bakers to grow the market to cover these rising costs.
Bimbo Bakeries USA, he notes, still is a work in progress.
“We are not where we want to be, but we have seen in this year particularly a growth in our sales that is very positive, growth in all of our regions, growth also in all of the brands we have, and particularly in the Hispanic market,” he explains.
Looking toward the future, Servitje stresses that the strength of the company comes from the principles and values instilled by his father and uncle.
“They were certainly an example for me and for every person who knew them who continues to work at Bimbo because they have continue to give to Bimbo,” he says. “They always had a very clear vision, despite the economy’s swings and the difficult conjunctures. If there is confidence in what we make and we persevere to serve our clients, our investments are going to have a good result in the long term.
“By the way,” Servitje adds, “they also are the people who have had the most influence on my life.” SF&WB
Editor’s Note: Earlier this year, Industria Alimenticia, Snack Food & Wholesale Bakery’s sister publication, named Daniel Servitje its 2007 Executive of the Year. This article is an excerpt from that report by the magazine’s editor, Elsa Rico.
An Ounce (or Less) of Prevention
Hispanic mothers are three times more likely to have a child with birth defects compared to non-Hispanic women, according to the Centers for Disease Control and Prevention. That’s because they’re less likely to consume foods with folic acid, which has been found to prevent neural tube defects.
This spring, Bimbo Bakeries USA rolled out Blanco Integral, a white bread made with whole grains that contains 20% of the recommended daily requirement for folic acid.
Packages of the bread carried the logo from the March of Dimes, which along with the CDC and the National Alliance on Hispanic Health has supported the consumption of foods with folic acid. The product was sold in California, Arizona, Nevada and Texas where Bimbo bread was distributed.
This isn’t Bimbo’s only cooperative effort with the March of Dimes in its fight to prevent birth defects. The company also is a major supporter of the Grain Foods Foundation, which is teaming up with the non-profit organization to roll out a March of Dimes logo that will be available to the foundation’s members for use on qualified products next year.
To Your Health
To improve health and nutrition, Grupo Bimbo created its Pan-American Prize in Nutrition, Science and Food Technology. The goal is to promote research and reward institutions working to improve the quality of life in different countries.
This year, Grupo Bimbo recognized two winners. Amy Proulx, a candidate with the department of food science and human nutrition at Iowa State University, won for her entry on “fermentation and lactic acid addition enhance bioavailabity of maize.” Peter Joseph Havel, a research endocrinologist from the department of nutrition at the University of California, was recognized for his research on how “consumption of fructose- but not glucose-sweetened beverages for 10 weeks increases postprandial triglyceride and apolipoprotein-B concentrations in overweight/obese women.”
In all, more than 70 researches from the United States, Mexico, Central America and South America participated in this year’s contest.
For more information, visit premiopanamericano.grupobimbo.com .