Josh Sosland, PortraitJosh Sosland, Milling and Baking News editor.

 Already a narrowly focused business, Grupo Bimbo SAB de CV is further tightening its focus on baking with the pending sale of its Ricolino confectionery unit to Mondelez International Inc. Commenting April 27 on the decision to part with the candy division for $1.3 billion, Daniel Servitje spoke with conviction about the strategic thinking behind the move. He was equally passionate in explaining to investment analysts the underpinnings of Bimbo’s merger and acquisition activity over the past 30 years.

“The strategic rationale behind this decision is that we are focusing on our core businesses — grain-based foods,” Mr. Servitje said. “We plan to continue to grow and further consolidate our position as the largest baking company in the world.”

Rather than hedging its bets by diversifying away from its core baking and salty snacks businesses, Mr. Servitje said Bimbo is hopeful about the possibilities of the two sectors for the future.

“We are not a conglomerate,” he said. “We were not even a sort of a broad food company that’s operating in many categories. We were just operating in three. Now we are laser focused on two.”

That the baking business is more promising than the confectionery business is not immediately obvious. One analyst noted that the $1.3 billion price Bimbo will be paid for Ricolino represents a multiple of 2.6 times the division’s sales. By contrast, Bimbo’s total market value (including Ricolino) is less than the company’s total annual sales.

Even more specifically, Mr. Servitje affirmed Bimbo’s commitment to baking in Mexico. He noted the company will spend three quarters of a billion US dollars on numerous capital projects in Mexico this year, including building a new plant in Monterrey.

In seeking to set the record straight with investment analysts about how Bimbo’s merger and acquisition history unfolded, Mr. Servitje made it clear the company knew heavy lifting would be required when Bimbo made its largest acquisitions.

“After we (do) these acquisitions, we have to work tirelessly years and years and years to fix ailing businesses, to invest in bakeries that have not been invested in many, many years and to fix distribution systems that were outmoded or not taken care of,” he said. “And that explains the essence of Grupo Bimbo. Grupo Bimbo is a company that always has its goals (set) very clearly and that has a long-term vision on how to develop the markets where we are.”

He went on to explain that smaller, recent acquisitions do not represent a change in strategy but an intentional move to complement the company’s base business with opportunities for future growth or strong synergies.

The longest-tenured CEO among any major US baking company, Mr. Servitje has been with Grupo Bimbo since 1982 and has headed the business since 1997, the year before Bimbo’s first large US acquisition — Mrs Baird’s Bakeries in Fort Worth, Texas. Numerous acquisitions followed ultimately resulting in Bimbo becoming the largest baking company in the United States. The path Bimbo has charted in the United States and other markets around the world sends a clear signal about the company’s patience when it comes to establishing itself in new markets. In his comments, he seemed to acknowledge that such determined perseverance may not be the industry norm. That the company last week also announced record first-quarter results offers validation for this approach, even if the company is not principally driven by short-term objectives.

“We play for the long haul,” he said. “If you don’t like the long haul, well, that’s who we are. But we are very clear on what we want to achieve, and we want to create value for our shareholders.”

To be sure, the baking industry in the United States and globally has experienced and continues to face daunting challenges. That the words and actions of the man who heads the world’s largest baking company speak so forcefully about the industry’s long-term prospects surely is cause for encouragement.