The most important thing in a firm is its people, because investors give what they have, but people give what they are. — Lorenzo Servitje, Grupo Bimbo founding partner By 2008, Grupo Bimbo was the leading baking company in the Americas and one of the largest in the world. It had annual sales of over $7.4 billion, more than 100 brands and more than 97,000 worldwide associates—as Bimbo liked to call its employees. It manufactured more than 5,000 SKUs (stock keeping units) from 83 plants located in Mexico, the United States, Central and South America, Europe and Asia. Bimbo distributed its products to more than 1 million sales outlets in 18 countries. Each of these points of sale was visited by more than 36,000 route salespersons. Its products ranged from sliced bread, buns, cookies, snack cakes, pastries, sweet baked goods, packaged food, tortillas, salted snacks, confectionary goods and goat milk sweet or “cajeta,” among other products. Bimbo was the largest Latin American-based food company and the second largest bread company in the world. For eight years in a row, Bimbo had been honored with the Socially Responsible Enterprise Award from CEMEFI, the Mexican Center for Philanthropy. Moreover, Grupo Bimbo was ranked in the 9th position of the Reputation Institute for best corporate reputation in the world.1 The next Mexican ranked firms in the study were Grupo Modelo and Cemex in the 112th and 119th spot, respectively. Grupo Bimbo had set ambitious growth objectives beyond 2010. It wanted to become the world leader in the baking industry and one of the best food companies in the world. In order to achieve those objectives, it had embarked on an aggressive program of acquisitions in overseas markets, starting with the United States across the border, and going all the way to China. “Even as we pursue an ambitious growth agenda, we cannot forget our core values and who we are as a company,” stated Don Lorenzo Servitje, the now retired 90 year old founder of the company. As Figure 1 shows, Bimbo captured its core values along the seven attributes of passion, profitability, effectiveness, team work, trust, quality, with the “person” coming at the center. Under its second CEO, Roberto Servitje (now chairman of the board) and its current CEO, Daniel Servitje, the company had grown spectacularly and gained an international footprint. See Exhibit 1 for its revenue growth. “Yes, indeed we have grown our business, not at the cost of our responsibility to society, but because of our investments in it. Going forward, however, we are a far more complex company than the one founded and
1to ensure that our values and strategy are in alignment,” asserted Daniel Servitje. Figure 1
Grupo Bimbo. (In the figure above, the expression “efforts and illusions” under “profitability” is best interpreted as “efforts and aspirations.”)
By 2008 Mexico was the second most populated country in Latin America (behind Brazil) with 105.7 million inhabitants, 76% of them living in urban areas.2 In 2007 Mexico’s Gross Domestic Product (GDP) was $893.4 billion –-the second largest in Latin America behind Brazil’s GDP of $1,286.7 billion but ahead of Argentina’s $262.3 billion, Venezuela’s $228.1 billion and Colombia’s
2 Instituto Nacional de Estadística, Geografía e Informática, INEGI, www.inegi.gob, last viewed August 11, 2008.
Grupo Bimbo: Growth and Social Responsibility
$172 billion. Mexico was the 14th largest economy in the World.3 Mexico’s GDP per head in 2007 was $8,219. However, Mexico was a country of contrasts: the lowest 20% of the population accounted for only 3.9% of total income and the Gini coefficient was 0.508.4 Forty percent of Mexico’s population was considered poor, and 18% lived in extreme poverty.5 Due to deficiencies in the public education system, the unskilled and low skilled labor pool was large and around 40% to 60% of the...