PROFITABLE GROWTH IN THE MARKETS AND RELIABLE BRANDS
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
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.
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
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.
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.
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.