Bimbo leads by example
Aug. 1, 2012
by Joshua Sosland
Advocates often assert that embracing sustainability helps lower rather than add costs. At Grupo Bimbo SAB de CV, it was the urgent need to cut costs that led to the discovery that sustainability, done properly, makes significant contributions to a company’s bottom line.
In an exclusive interview with sister publication Milling & Baking News, Daniel Servitje, CEO of Grupo Bimbo, reviewed the evolution of sustainability at the world’s largest wholesale baking company. He said Bimbo is regularly recognized as a sustainability leader in the Mexican business community. Late in 2011, the Bolsa Mexicana de Valores (the Mexican Stock Exchange) chose Bimbo for inclusion in a new Sustainability Index, which helps investors identify companies that stand out on the basis of their environmental stewardship, social responsibility and corporate governance.
Mr. Servitje said his own background in the subject readied the company to support the issue. “My first entrepreneurial initiative was a solar energy company when I was 18,” he said. “It floundered, but I had a real interest in renewable energy and energy conservation that I have never lost. I also enjoy the forests and hiking, and as a company, we’ve worked on a reforestation initiative in Mexico.”
Opportunity from struggle
The chance to turn this interest into action for Grupo Bimbo occurred at a time 10 years ago when the company was struggling financially.
“We had an economic crisis in the country and needed to reduce our engineering staffing or move many of them to new areas,” Mr. Servitje said. “We asked some engineers to try to find some energy savings, which they did. Their discovery quickly proved profitable and showed high payback ratios.
“Since then, we’ve had a small team of engineers developing and testing ways for us to be more efficient in our energy gas and electricity usage, and to improve efficiency in our distribution routes,” he continued. “It has been a very profitable initiative, and we are expanding globally with different divisions in various stages of the process.”
Mr. Servitje cited US sustainability efforts, where approaches may be different from those being pursued in Mexico, as an example.
“We are happy with the process in the United States,” Mr. Servitje said. “For example, they have installed efficient lighting, significantly reduced landfill waste and decreased electricity by increasing energy efficient equipment in some plants. These actions make sense from an economic standpoint, and we believe we have a role as manufacturers and distributors to reduce our environmental footprint.”
Grupo Bimbo’s sustainability progress is carefully measured around three principal areas: carbon footprint, water footprint and waste management. Longtime Grupo Bimbo executive Rosalio Rodriguez, chief of operations, has overall oversight.
Some examples of the results in these areas during the past three years include decreasing carbon dioxide generation from the company’s plants and vehicles 6.2% and reducing the company’s water use by 3.9%. Additionally, in Mexico and Central America, Grupo Bimbo was able to recycle 71% of its total waste, both hazardous and non-hazardous.
A never-ending initiative
Making real progress toward sustainability and continuing that progress is crucial, Mr. Rodriguez said.
“We are working on the entire value chain,” he said. “If we are going to be audited, our suppliers will be, too.”
Perhaps the most visible move by Grupo Bimbo on the sustainability front is an initiative announced in December 2010. The company is partnering in the construction of a wind farm in Union Hidalgo, in the southern coastal region state of Oaxaca, not far from Mexico’s border with Guatemala.
Called Piedra Larga, the wind farm is expected to be the global food industry’s largest, generating nearly 100% of the electrical power used by Grupo Bimbo in Mexico. The installed power of the plant will be 90 MW, derived from 45 turbines of 2 MW each.
The initiative will allow the company to diminish gas emissions, equating to 17 million gallons of diesel and 180,000 tonnes of carbon dioxide (roughly 15% of current emissions, excluding the acquisition of Sara Lee’s fresh bakery business in the US).
While firmly committed to the initiative, Mr. Servitje was careful to point out Grupo Bimbo is not entering into the wind energy business.
“It will be a profitable commitment, but we are not investing,” he explained. “We are committing to buy the wind energy at least 18 and up to 28 years. This should have a financial benefit while producing clean energy in all our plants in Mexico. It will be the largest conversion of nonrenewable to renewables in the world in the food industry, as far as we know. There is some associated risk — if electric costs decline significantly, we may pay more than market prices — but we are optimistic about the results. It has been eight years from conception to realization. We’re almost there.” The company expects the farm to go online in the final months of 2012.
A long time in the making
The enthusiasm for sustainability at Grupo Bimbo also may be seen as consistent with broader values embraced by the company, Mr. Servitje said. It underscores that to whatever degree Grupo Bimbo has cut costs through sustainability, other motivations are at play, several of which date back decades.
“We believed in our social responsibility many years before it became mainstream,” he said. “It’s nothing I invented. It’s part of the DNA of our company. Our leaders and founders always believed business could make society better.”
In fact, today, the company’s vision looking to the year 2015 calls for Bimbo to be “a model to be followed with worldwide recognition in terms of sustainability.” The vision statement continues, “We bring together our economic and social goals with awareness and commitment to reduce our environmental footprint.”
“We’ve focused playing our part on many fronts — not just environmental but also on developing better citizens for our countries,” Mr. Servitje said. “The image of the company, I think, is a positive one. If we make mistakes, we need to correct them. We don’t only want to grow but also to make society a little better. It’s in our blood. Ultimately, we do it not to make money, but because it’s our role in business.”