CMI Foods is like the perfect recipe – it has an ideal mix of ingredients that a company requires to be successful. An organization that combines the power and scale of a large multinational with the essential local knowledge required for food markets, and the passion and core values of a family-owned company.
A business that has thrived in the face of a pandemic, but has also been committed to helping its partners, the environment and the communities it serves.
Operating for more than 100 years, Corporación Multi Inversiones is what it calls a ‘multilatina family corporation’ with two business groups – CMI Foods and CMI Capital – that employs more than 40,000 people and has a presence in 15 countries throughout Latin America and the US.
So it’s little wonder that Jose Gregorio Baquero was tempted out of early retirement to take on the role of CEO of CMI Foods.
“I come from a management consulting background; I worked for 22 years as a partner with Booz & Company, and my expertise was food and beverage companies, transforming their business, defining new operating models and growth strategies,” he explains of his career.
“CMI had been my client since 2009 and I helped it through a series of transformations.” After traversing the globe extensively for work for many years, Jose decided to retire from consulting in 2016.
“A lot of management consultants tend to retire early because of the amount of travel that we have to do. I personally have worked in about 30 countries around the world,” he reveals.
“So I ‘retired’ and joined CMI as a board member. I was an External Director, a Non-Executive Board Member on the CMI Corporate Board and on the CMI Foods Advisory Board. And I also became an Advisor to the owners and to the Corporate President of CMI Foods at that time.”
During this period, CMI Foods decided to install a new operating model as well as a new organization and structure, and to pass the executive leadership from the family to a new CEO. The family decided Jose was the man they wanted.
I think it’s a challenge that happens once in a lifetime for an organization.
“It wasn’t part of my plan, to be honest,” he admits. “But as soon as they invited me, I said, ‘You know what? This is a great challenge for me, with a lot of opportunities.’ And I decided to take on that challenge for a number of reasons.”
In fact, there were four main reasons Jose was enticed to join. The first was the opportunity to expand CMI Foods from within what was already a big organization. “CMI Foods was a collection of independent businesses that all belonged to the same family, but did not operate as one food company,” he explains.
“My challenge was to create the vision and the capabilities we needed to lead and execute the transformation. It was more than a transformation; it was creation, and that was very appealing. I think it’s a challenge that happens once in a lifetime for an organization.”
Secre sauce
The second factor in Jose’s decision was to be part of the CMI family, what he refers to as the “secret sauce” of the business – a very apt metaphor. “One of the things that distinguishes CMI is our ‘secret sauce’: we are a family-owned company.
You’re not just a number, and that goes for me through to the last of my 40,000 team members. You have a name and you are a part of a family,” he says proudly.
“When I started working with CMI in 2009, I instantly clicked with the owners. It goes beyond just a professional relationship; it’s about how you feel part of a family, how we operate and the values we have. It’s something that doesn’t happen too often.”
Despite the welcoming family atmosphere, there’s no doubt the sheer scale of the company was another factor in Jose’s decision to join. “It’s not every day you have the opportunity to lead a company as large as CMI Foods,” he acknowledges.
“We’re one of the largest food companies in Latin America. There are six business units, with more than 28 lines.” And his final reason for taking on the huge transformational challenge of the business was another opportunity that rarely occurs in the business world: the chance to create a legacy.
“It’s a legacy beyond the creation of CMI Foods. We believe our purpose is to feed the world and deliver wellness and sustainable development to our communities, our consumers and our team members,” he shares of the company’s mission.
It’s an exciting vision, but first, there was the pandemic to deal with. It’s something that Jose believes CMI Foods was well prepared for and indeed, the company has thrived over the past year. “In our case, from day one of the pandemic, we were very optimistic,” he confirms.
We’re very different from our competitors. We believe we’re unbeatable.
“At CMI, and especially CMI Foods, we were prepared for a crisis. We didn’t know what crisis was going to come, but last year with the help of our corporate departments we started to do a risk assessment. And following that, given all the risks in the world, we decided we needed a set of new protocols and a new organization to handle risk and any potential crisis.”
As a result of acting early, CMI Foods was prepared when the COVID-19 pandemic hit and it was able to forecast the potential impact on its operations and businesses. It helped the business to have a surprisingly successful year. “Of course there has been an impact,” Jose concedes.
“But we believe that this has been one of the most successful, if not the most successful, years, in CMI Foods history. Not necessarily because of numbers – of course, we were hit like many companies were, especially in our restaurant division – but we have emerged out of this crisis stronger.”
Aggressive future growth
Having ridden out the worst of the pandemic, Jose is unsurprisingly extremely optimistic about the future. “When people ask me when I expect CMI Foods to reach the levels of growth of 2019, I tell them it will happen next year. In fact, our plan for 2022 is more aggressive than the business we had in 2019,” he points out.
CMI Foods is plotting a major evolution for its businesses next year, with much of its portfolio predicted to have double-digit growth. Beyond that, there is a very aggressive vision for 2025, with a strategic plan to almost double the business – certainly growth of 60–80% – in the next four to five years.
Jose explains that such aggressive development will come from maintaining the health and leadership of its core businesses, and growing the profitability of businesses that he refers to as “future winners”, an aggressive plan of new innovations as well as complementing these with acquisitions.
Expansion into new geographical areas – and expanding Jose’s impressive list of passport stamps – is not currently a priority, though. “Our main focus is to grow from the markets in which we currently reside,” he says of the business.
“We operate in 15 countries, so we want to solidify our leadership in those 15 countries. And then we will very strategically evaluate whether we need to go beyond those countries.”
Jose hopes that the company’s growth will also benefit the communities in which it operates. To this end, he says CMI Foods is employing training initiatives and offering franchise opportunities to local businesses in areas as diverse as bakeries and selling fresh chickens. “We’re offering opportunities to entrepreneurs to help us fuel that growth,” he states.
“It’s not just growing CMI, but also developing a sustainable economy in our operating countries.” Understandably, with such a large company and so many diverse opportunities, a strong yet flexible strategic plan is vital.
We combine world-class capabilities with local knowledge and agility, the passion to win and the familial nature of the business. That is what makes cmi foods so powerful.
“We’re making some changes and modifying our vision, but around 80% is the same,” Jose says. “We are probably adapting 15–20% of our strategy, but the majority will stay the same.
“If you have a sound strategy, that will pull the business through good times, bad times, times of crisis and a pandemic. Your strategy can’t change depending on the flavor of the day.”
And so CMI Foods’ core strategy remains largely unchanged, while some of its businesses will adapt strategies as they experience faster or slower than expected growth. Pollo Campero, for example, was one of its surprise star performers during the pandemic.
While the restaurant industry was badly hit in 2020, it took on a new operating model that involved deliveries as well as on-premises food. “We thought that it would be a terrible year for Pollo Campero. In fact, it’s been great,” he smiles.
“We took advantage of the opportunities and now we’re growing faster than the rest of the industry.”
That special ingredient
CMI Foods is succeeding where many others are failing and Jose believes it comes down to that special ingredient he mentioned earlier: the company’s ‘secret sauce’. “We’re very different from our competitors. We believe we’re unbeatable,” he affirms.
“One of the things that set us apart is the secret sauce. The core values we have are the result of being family owned – you’re part of a family. That culture of values sets us apart in a number of things. You’re part of something bigger, something that goes beyond the next quarter, something that goes beyond the next year. You’re part of a legacy. You’re part of a vision.”
We believe that this has been one of the most successful, if not the most successful, years in cmi foods history.
The company’s core values spell the word reir, which means ‘laugh’ in Spanish. At CMI, REIR stands for responsibility, excellence, integrity and respect. Jose uses the metaphor of driving your own family car, rather than a rental, to illustrate how these important core values play out.
You’re not invested in a hire car and will perhaps use the cheapest fuel and largely not care about how clean it is. However, when you drive your own car, you want to look after it, maintain it and keep it clean – you care more.
“Being part of CMI, all of us act as if we’re owners, as if we’re driving our own car,” he says. “And that is a big difference. Having that culture, everybody has that passion to win, that passion for quality, as if this was your own company. And that goes from the CEO to the last of the team members. That is a secret sauce we have at CMI. It is our formula to win.”
That level of intimacy and passion within the company extends to encompass the community setting too. “If you think about how we’re different from a multinational company, it’s that we’re local,” Jose explains.
“We are from Central America. We are from Latin America. So we know this market because we grew up in this market and we live in it. We know the consumers better than a multinational can because we’re from here, and we know the local flavors, especially when it comes to food.
“We combine world-class capabilities with local knowledge and agility, the passion to win and the familial nature of the business. That is what makes CMI Foods so powerful.”
Supply chain success
Perhaps the most complex issue CMI Foods has to deal with is planning the huge supply chain required to keep the business successful. It includes products that are living and growing, and that can cause its own set of problems.
“When you produce cookies and you miss your forecast, you probably have an oversupply of cookies. It doesn’t matter,” Jose explains.
“When you think about chickens, those are live animals. You need to plan that supply chain early on, including how many eggs you want to incubate. Even before the eggs, you need to think about the other reproductive part of the chain. Then you have all the grain you need. So it’s a very complex supply chain.
“One of the capabilities that we have created at CMI Foods is the capability to not only execute the supply chain, but also do the proper planning.”
With such a large and complex set of suppliers, the company has set up a specialized group that basically helps with strategic sourcing. That group helps CMI set up lasting relationships with suppliers and also identifies which suppliers are the best for the long-term.
“Our specialized group basically focuses on a strategic sourcing of our strategic commodities – the orientation process, the sourcing, the handling of the freight, the ships,” he explains.
“Then we also have a specialized group in strategic sourcing with the more traditional suppliers, those who produce the other raw materials, the packing materials, all of that. We also have another group that’s focused on more local suppliers; for example, transportation companies.”
Jose adds that a big challenge is integrating this complex supply chain to ensure the business runs smoothly. “One of the companies we have is focused on building the right sales and operations planning capabilities, to ensure we have proper forecasts and proper planning to manage this complex supply chain,” he says.
CMI Foods has more than 5,000 suppliers in total, of which around 15 to 30 are the key suppliers of strategic commodities that Jose mentioned earlier. Those key relationships not only provide the bulk of the company’s purchases, but will also have an impact on quality and innovation going forward. One such example is Griffith Foods.
Also a global yet family-owned company based in Chicago, it has been partners with CMI for more than 50 years. It provides the flavor for Pollo Campero and marinades for many of its other businesses. “It is probably one of the best examples of the long-term partnerships we have,” he smiles.
“Griffith Foods has been great in supporting us in our expansion.” If all of this isn’t enough for CMI – helping its shareholders, consumers, partners and communities – the company also has a strong commitment to helping the environment.
“For us, sustainability is key,” Jose stresses. “One of the things we always look at is how to use energy in the most efficient way. As part of CMI Capital, we are one of the largest generators of renewable energy in terms of hydro, wind and solar. We also use those capabilities to improve the energy efficiency of CMI Foods and reduce our carbon footprint.
“We are focusing on leveraging the capabilities that we have in CMI Capital for the sustainable growth of CMI Foods.”
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