Profitable growth in the markets and reliable brands

//Profitable growth in the markets and reliable brands
Profitable growth in the markets and reliable brands 2017-07-19T13:16:02+00:00

Strategy and progress

STRATEGY GRI 103-2
PROGRESSGRI 103-3
Strengthening the differentiated value propositions of brands and networks.
  • The Organization deepened its understanding of consumers, shoppers and customers in the strategic region by means of marketing studies.
  • The brands were aligned with Grupo Nutresa’s segmentation and the communication codes were strengthened in accordance with the established positions.
  • The Company capitalized the strengths of the transverse brands that are present in different regions and categories.
  • Grupo Nutresa worked on increasing the understanding of customers and shoppers from the commercial networks with the purpose of delivering better value propositions that ensure their loyalty.
Managing the portfolio of brands and products in accordance with the market needs.
  • The portfolio of key business segments was organized to streamline references by region, channel and brand role.
  • The portfolio was adapted to consumer needs in accordance with the brand´s purposes
Strengthening the commercial networks and generating customer loyalty.
  • The customer loyalty strategy was implemented in accordance with each customer’s segment and potential in order to ensure the delivery of differentiated value.
  • The Organization standardized its customer service policy, and successful commercial practices were shared among the companies with the purpose of strengthening the market entry model.
  • Grupo Nutresa consolidated its commercial networks in Central America, United States and Chile by incorporating categories of powdered beverages, nuts and coffee.

Purpose

Profitable development of the strategic markets with brands, distribution networks and value propositions that deliver memorable and differentiated experiences that fulfill the needs, motivations and purposes of customers, shoppers and consumers of different segments.

On the other hand, to understand the new realities of the market, the culture and the society through the Brands and Networks Management Model, and through a portfolio of brands and products based on the everyday life in pursuit of the consumers’ quality of life.

Risks and opportunities GRI 103-1

Grupo Nutresa Commercial Developer, Surtifamiliar Cali.

The changes in the consumption and purchase patterns produced by the offer of new experiences, such as private brands and commercialization formats with low prices, are a challenge for the commercial system. Consequently, the differentiation of experiences was innovated based on the creation of brands valued by the consumer.

The submission of the yearly World Health Organization (WHO) report, the discussions on healthy eating habits and the new nutritional, tax and non-tariff regulations have intensified the efforts to acquire better technology and differentiated value propositions with improvements in the nutritional profiles.

The volatility of the commodities and the exchange rates in the strategic region continue to be a risk for the profitability of the businesses, which could negatively affect them or positively favor them depending on their strategic position. Therefore, market diversification becomes highly important in order to maintain the Organization’s competitive advantages.

The constant changes in the tax regulations around the world are an important risk for Grupo Nutresa. Additionally, the new environmental protection and human health trends have made it necessary to take legislative measures aimed at mitigating the social issues. For that reason, a constant monitoring is performed to the financial impacts caused by the legislative projects, allowing thus to explore strategies focused on an efficient taxation suited to the legal provisions.

Outlook

A Cold Cuts Business customer at a point of sale.

With a view to the MEGA 2020, it is essential to grow in terms of the leadership of brands and flagship categories with the aim of harnessing market opportunities and ensuring the international expansion. In this regard, new value experiences will be designed and adjusted according to the changes in the lifestyles and consumption habits and preferences, based on the Brands and Networks Management Model.

Due to the foregoing, it becomes necessary to continue to push effective innovation forward in order to expand the brands into new market categories, improve the nutritional profiles, advance to healthier and better-perceived categories, as well as to develop more affordable alternatives for the consumer.

The Organization visualizes growth opportunities for the main brands by means of a profitable expansion in strategic territories. Likewise, it is feasible to develop special projects focused on new business models.

The growth dynamics should be supplemented with the internationalization of the businesses and the entry into new categories that provide higher value by means of the implementation of both the “Go to Market” Service Model and the sustainability concepts.

With the purpose of consolidating the leadership in the strategic region, it is important to have an efficient channel participation that allows to ensure the sustainability of the businesses, develop synergies of categories to optimize resources and strengthen the value proposition of the industrial products with higher rates of effective innovation, service, technical support to customers and flawless logistics.

Success stories and acknowledgments GRI 103-3

Compañía de Galletas Noel received several acknowledgments for its 100 years of history: Order of Merit Don Juan del Corral, Gold Grade awarded by the Medellín Council, and the Order of Business Merit awarded by the ANDI (Colombian Industrialists Association), among other.
The Campamento Jet (Jet Camp) experience was acknowledged with a Gold EFFIE award in the category of Activations. This award is the most relevant accolade in the Colombian advertising industry.
Pozuelo was awarded the Gold EFFIE in Costa Rica for its campaign called “Familia en cualquiera de sus moldes” (Family in any of its molds).
Entry to the capsule business in Colombia with “Cápsulas Express Nutresa,” which in just three months achieved a 14% share in the market of the main customer in the country.
Saltín Noel was ranked 11th in Kantar World Brand’s top 20, a specialized board that audits the main mass consumption categories of the market in Colombia.
Doria was acknowledged as the 14th most dominant brand among the basic grocery items producers according to P&M’s (an advertising and marketing firm) study.
Zenú made the tenth place in the study on the most valuable Colombian brands, which assesses financial, market-related and brand-related aspects. This study was conducted by the firms Compassbranding and Raddar.
Lucchetti was selected, for the fifth consecutive year, as one of the 15 most valued brands in Chile in the study called “Chile 3D,” which was conducted by the consulting firm GfK Adimark.
Corona, with its campaign called “Amo el Chocolate” (I love chocolate), focused on introducing different ways of preparation, consumption and communication to Millennials. The brand grew 16% in terms of value, 2% in volume and reached more than 5 million users with the recipe videos in social networks.
El Corral was ranked 1st among the fast food chains by the La Barra magazine. The selection of the winners was audited by KPMG and endorsed by a committee of six representatives of associations from the hotel, restaurant and bar industry.

Progress achieved in 2016 GRI 103-3

Grupo Nutresa’s Brand and Network Management Model

In the consolidation of the Brands and Networks Management Model as the fundamental axis and articulator of Grupo Nutresa’s commercial strategy, three key agent groups have been established: consumers, shoppers and customers. The Organization strives to interpret their needs, motivations and purposes in order to gain their loyalty.

By executing the Model, Grupo Nutresa delivers relevant, memorable and differentiated value experiences through brands that are beloved and known well by the consumers in the regions where it operates, supported on distribution networks with a vast capacity and availability to reach the consumers at the moment and place they establish.

In 2016, the Organization created a unified brand map for all the Businesses. Additionally, as a differentiating factor, a strategic definition was established for each brand with a role and a specific positioning in order to efficiently serve the market.

The saturation and fragmentation of the digital media make it increasingly harder to stand out and gain customers’ preference through the traditional media. This fact implies that the relation among the advertisers goes from being unidirectional to being bidirectional, which means that consumers determine what they want from the brands and so they start having a fundamental role. Therefore, Grupo Nutresa co-creates with the consumers by listening and understanding the interactions that take place in the digital media it is exposed to.

The Organization is permanently working on improving its capabilities to maintain its omnichannel presence based on the distribution and value propositions of its brands, and it understands that today’s shoppers are more demanding in their purchase decisions and in terms of information research, brand purpose, money and time saving, risk reduction, channel convenience and diversity, among other aspects.

Considering the foregoing, Grupo Nutresa’s Brand and Network Management Model generates a characteristic and unified knowledge of the commercial system. In the future, it will integrate diverse information sources by means of big data analysis to enable a better reading of the needs of customers, shoppers and consumers.

Reliable brands with an excellent price-value ratio GRI 102-2

To maintain and increase brand capital, the Organization makes a rational use of the resources for the production and commercialization process, based on the reinforcement of three core capabilities: knowledge of both the markets and the consumer needs, market entry excellence, and efficiency in the planning and management of the supply chain.

Likewise, a permanent surveillance is maintained over the trademark registries in order to ensure the protection and defense of the rights, secure the value and recognition of the brands and avoid consumer confusion. This constant management has allowed the Organization to receive multiple notoriety statements regarding its brands from the Superintendency of Industry and Commerce, granting a reinforced protection to several of them, which should be preserved.

Impeccable execution

Grupo Nutresa offers the best value proposition to customers and consumers.

Grupo Nutresa implemented several initiatives focused on developing and strengthening customers’ capabilities, such as training activities, co-creation sessions, loyalty programs, collaborative models, experience centers, events, use of sustainable materials and an impeccable execution at the points of sale.

In addition, a comprehensive advisory was provided to the traditional channel in Colombia, allowing the renovation of the points of sale, the display fixtures and the merchandising material in order to improve the consumer experience, as well as the administration and management of the customers.

In the international operations of Bon and POPS in the Dominican Republic and Central America respectively, the Organization achieved the consolidation of a network comprising more than 450 ice cream shops in 8 countries. 80 of these shops were renovated in order to provide a better consumer experience.

Internationalization Model

Ice Cream Shops in Dominican Republic

This Model is aimed at achieving that, by 2020, the sales abroad will represent 45% of Grupo Nutresa’s total sales, which in 2016 it was equivalent to USD 1,09 billion. In this regard, the Organization deepened its study of the strategic region market and focused on meeting its needs. Furthermore, Grupo Nutresa started using the international segmentation model in all four countries, classifying them as strategic, tactical and opportunity-driven, which allowed to efficiently allocate the resources for brand building and distribution.

Raw materials volatility management

Due to the relevance of raw materials for Grupo Nutresa’s sustainability, the management of this matter is focused on its diversification, the development of policies of coverage with defined risk levels managed by a specialized committee, a trained team dedicated to the follow-up and negotiation of supplies, and the permanent search for new opportunities and schemes for the efficient and competitive raw materials sourcing at a worldwide scale.

This focus has allowed the Organization to minimize the impact of the surge of the American Dollar exchange rate (with respect to the Colombian Peso) and the raise in the price of the commodities.

Direct economic value generated and distributed GRI 201-1 [SDG 2] [SDG 5] [SDG 7] [SDG 8] [SDG 9]