With nearly one hundred years, Grupo Nutresa is one of the most important companies in the country. Its products are sold in 70 countries worldwide. It has operations in 15 countries, and more than 45,000 employees. Sales reached more than COP8,6 trillion in 2016. It is one of six Colombian companies with the highest market value and one of the six multilatinas companies with headquarters in Medellín.
In recent years, the company has gone international. It has spread not only in the Latin American market, but in more distant geographies such as Asia. Grupo Nutresa is a company that is part of the city’s business core. Its history is tied to the economic and social development of the city and is a key player in the process of industrialization that Medellín began in the early twentieth century. It has reinvented itself and has implemented a strategy that has led the company to become one of the most recognized food players in Latin America, not only for the quality of its products, but also for its commitment to sustainability. Carlos Ignacio Gallego, the Group’s CEO, spoke with Link magazine about the importance of cooperating agencies to attract investment and to support the industrial development that brings economic and social progress.
What is the role of the industrial sector in the city’s process of transformation?
Business development is linked to social development. In fact, it is statistically proven that an important part of the productivity and competitiveness of a company is related to the environment or the context in which it operates. We say that almost 60% of productivity is what is done inside the company, and 40% to what is done outside. Grupo Nutresa was established in this city. It has some of its most important companies based here and has always been linked to the progress and development of Medellín.
Why has Nutresa remained in Medellín?
When asked about the business model of the company, we always talk about three elements: people, brands, and distribution […] So the fact that companies like us, continue here, is not only for a historical reason. We can perfectly have offices in many places. Being here has to do, first, with the talent in the region, which is the greatest strength. Secondly, with a major brand development. From here we have been able to project that growth to act in other categories and other geographies.
This Group is not the same today than it was one hundred years ago. Companies change, transform, evolve, as we all must do. But we are committed to the region and its development. We know that what most favors business development is a business environment that will provide the right conditions to grow, be profitable and have the capacity to reinvest.
During their early days, these companies were very local. It was only after year 2000 when they accelerated their pace to be in other markets with a long-term scope. It was not only to leverage a timely opportunity, but to build a regional presence, that as the company, was long term and would significantly add to the development in other countries.
How has the expansion process been?
It is a process that has been achieved with great humility. It is not only to sell elsewhere what we sell in Colombia. It is also learning about customers, clients, buyers. It is about respecting local traditions, assessing the talent in each of these regions and creating different value proposals from those of the competitors and making them better, and winning preference in those markets.
We have been able to do this, overcoming initial limitations. Antioquia was for many years a region enclosed by these mountains. The lack of adequate infrastructure made us look inward. The country was, for many years, limited by protectionist policies. We are a group that believes in the convenience of free competition, one which believes that exposure to other markets and cultures, understanding more demanding consumers makes us better. We are a group that dared to make the first export of processed coffee to Asia in 1961, and now even has own operations in Southeast Asia.
What is the importance of an organization like ACI Medellín in contributing to the development of the companies and the city?
I will highlight the importance the Agency has on building a far more global mindset in Medellín. Perhaps what you need the most for internationalization is, a mental openness that allows you to look at the other, to respect him/her, to try to learn, to value our traditions, but understanding there may be better things elsewhere. We also need to learn fast, to combine the strengths that exist locally with the ones abroad. We must understand that new ways of seeing the world and diversity are an asset and not a threat. As business leaders, we must have the openness to understand that change and evolution are not evil, it is something natural. We also have to understand that we cannot internationalize just a company, it is a society we are talking about. That is the path that has been traveled by Medellín, overcoming very difficult stages, violence, poverty and inequality. We have understood that we can work together between the public and private sectors. There’s an opportunity to build on both sides, that strong institutions are excellent so that there is business development and we as business leaders can help in this symbiosis. Development is not only for business leaders, but for the whole society.
“ACI Medellín is a facilitator of the internationalization of the city. It should be a facilitator of corporate business presence, of this change in the mindset needed to create a state and more connected companies to today’s world, not to the past.”
Carlos Ignacio Gallego, Grupo Nutresa CEO.
During these 15 years, ACI Medellín has attracted investments for more than USD1.6 billion. From your point of view as a business leader, what should the city continue doing so that these investments grow and have greater economic and social development?
Companies internationalize in many ways. There are companies that become international in inputs, because they use inputs that are not produced locally. There are companies that become international for its customers, they sell to customers who are abroad. There are also international companies by investors, because there are people abroad who decide to invest, buy shares, which may act locally, but are international. There are others that become international because they have talent, which is not only the one born here.
I think Medellín may find all these forms of internationalization as suitable, because basically what is there is a hue of opportunities, to be more competitive, to have better talent, to serve larger markets, to generate more economic and social value, more jobs, more taxes, and more opportunities.
This internationalization comes in many forms. It is not achieved simply by giving away resources. It is achieved with clear institutions, with stimuli, with good public services, better education, showing the advantages we have and maybe no one has heard about yet.
I think one of the interesting topics of the Agency, but it is not its only responsibility, is to be a facilitator, a catalyst aiding in the entire process of internationalization to be faster than those places where there is no such encouragement or facilitation.
We as business leaders are constantly reviewing ourselves and looking for opportunities and in this case ACI is an ally that is available, acts with initiative, not only by demand. The Agency is not just sitting and waiting to be called, it seeks to create opportunities and supports efforts where the city can progress to become one more connected with the rest of the world. That connection is a must. In some cases, it is very simple, in others it is more elaborated. Sometimes it requires overcoming prejudices or fame for problems that have been maybe already overcome; in others we have to be very realistic and acknowledge the difficulties we have. Nonetheless, we must show that we are working to overcoming them. I think that’s one of the merits justifying that there is an Agency like this.
When you study a new investment, what do you look for, apart from the business opportunity?
First, we look at the size and dynamics of the market. Secondly, we search for places where private leadership is seen as a development. You won’t find this in all countries. We want to be where the private sector is seen as an engine for development, where private property is respected, free enterprise is welcomed, as well as free competition. Thirdly, we want to go to countries where we can apply the skills we have and where we may have allies who are willing to combine their capabilities with ours. The other analysis is on risks and opportunities to determine where to go.
I think most companies carry out an analysis like this. That is a scenario where having an Agency that is able to show the advantages, realistically explain the risks, but able to advise those interested, can be very important for the development of the region. Moreover, we interact in many countries of America and Asia with similar agencies such as ACI, they do the same. Locally there are different entities created by municipalities or city councils, promoting the cities and supporting the establishment of entrepreneurs who want to go and do business. Although national agencies are very important, in reality we do not come to settle in a country, we land in a city, then local allies make the national efforts possible.
Medellín still fears the arrival of foreign companies, that’s the reason why we must create a new mentality. When I say exposure to other cultures, to other markets, other consumers, other people, I am talking about a source of growth and not a problem. That’s the perspective. We need to move away from protectionism and work more on productivity, competitiveness, talent development, use of technology. All of the above is more valuable than protection.
ACI has been doing this. The Agency evolved from only raising cooperation funds to attracting investment… What I have seen in the world is that organizations like ACI become like the development office of the city, and are being demanded inside and abroad. For example, the DCOA (Development Corporation of Abilene) in Texas has a development office in the city. This Agency is interested in fostering not only foreign companies, but also those local players. It is in charge of developing any type of requirements.