Page 91 - STRATEGY Magazine

PROFILE: FEMSA
125 YEARS OF INNOVATION
FEMSA is looking to double its value every five years—quite an ambitious target for the global beverage leader. How will it achieve this goal? By practicing the same values that have defined the company since 1890.
“From the company’s beginnings as a local brewer in 1890 to our global profile as a NYSE-listed beverage and retail leader today, the vision of the founders has not wavered: to work with and for the communities we serve and to create long-term value for all our stakeholders.”—José Antonio Fernández, Executive Chairman of the Board, and Carlos Salazar, CEO
FACTS
Company: FEMSA Founded: 1890
Revenue: Total consolidated revenues in 2016 rose 22.8% over the prior year
Investments: Invested US$16.8 million
Million USD in on-site and online training in 2016
CSR: 3 main initiatives address water issues in Latin America and education programs focused on infants and young children support healthy nutritional habits and lifestyles
Website: www.femsa.com
Back in 1890, five entrepreneurs founded a brewery that crafted Mexico’s first internationally recognized beer, Carta Blanca. In the intervening years, the company has survived the Mexican Revolution—manager Luis G. Sada noted that it was “business as usual” after the brewery was seized, then recovered—founded a prestigious university, joined The Coca-Cola Company as its largest franchise bottler worldwide, and traded its beer business for a 20 percent ownership share in Heineken.
Today, FEMSA is a multinational company with a strong presence in 12 countries from South America to the Philippines. Although beverages still play a major role in its success through Coca-Cola FEMSA, the corporation now boasts two additional divisions: FEMSA Comercio, with more than 15,225 OXXO stores and 2,120 pharmacies in Latin America, and FEMSA Negocios Estratégicos, which is dedicated to logistics, point-of- sale refrigeration solutions, and plastics. The three divisions share economic, social, and environmental values that have earned the company recognition from organizations including the Mexican Center for Philanthropy and One Planet.
Constant evolution
From its roots as a local brewery to one of the world’s leading beverage companies, serving 351 million consumers annually, FEMSA has made change a constant. Its multiple lines of business make evident a tradition of innovation.
The current corporate structure, in which the three divisions complement one another, represents a logical extension of FEMSA’s growth. Take FEMSA Comercio—in the 1970s, the corporation needed an outlet for beer sales, so it designed OXXO, a retail concept. Today, it opens three OXXO stores a day, a pace that is expected to continue for several years. The Comercio division oversees the development of brands in sectors ranging from fast food to beauty, including OXXO Gas, Farmacon pharmacies, and Doña Tota restaurants. Thanks to FEMSA Comercio, 6.6 million people have access to banking.
FEMSA Negocios Estratégicos also sprang from expansion. Originally a solution for transporting beer to retailers, it is now a profit center. Executives believe that significant growth lies ahead for the logistics business, in Mexico and across the Americas. Although it is currently the smallest division of the three, Negocios Estratégicos is integral to FEMSA’s success.
Focus on philanthropy
This quest for improvement reaches far beyond the bottom line—the company opened its first school in 1906 and has been a champion of education ever since. Environmental concerns are paramount, as well. As one example, subsidiary Imbera, designed to support beer distribution as a commercial refrigeration company, was the first firm in the world to receive the One Planet award for energy-saving technology.
In 2008, Fundación FEMSA was created to serve people by focusing on water and nutrition. Today, 600,000 people in more than 500 communities have benefited from initiatives that bring clean water to communities, provide nutrition advice, and support training at the Water Center for Latin America and the Caribbean at Tecnológico de Monterrey.
For FEMSA, this is what good business looks like.
strategybg.com 89