Bimbo Group

Bimbo Group and Papalote Museo del Niño

“When there are no profits, it’s very hard to undertake social philanthropic

actions.” Lorenzo Servitje, Bimbo Group founding partner

Shortly after the Bimbo Group was awarded the Socially Responsible Company badge by the Mexican Philanthropic Center (CEMEFI A.C.) in 2001, the company was about to launch a new bread product line for children, known as Bimbo Kids. According to information supplied by a leading marketing data firm, the children category concept had already been significantly developed by then.

At that time, Bimbo Group’s marketing director, José Manuel González Guzmán, B.A., was in charge of launching the new product line, 100% intended for children. A new product launching process involved several previous market research surveys, but, essentially, it required a relevant sample. The Bimbo Group faced the challenge of launching this new line quickly and at low cost. Then, José Manuel remembered the alliance Bimbo Group had had with the Papalote Museo del Niño (Papalote Children Museum) for ten years. He thought, “If we are going to launch a children’s product, we should try it at a place where children usually go to carry out the necessary market research and, at the same time, to display it.” Although catering children, the museum was visited by people of all ages, social backgrounds and locations, thus constituting a very suitable place to carry out sample surveys for the new product line.

José Manuel knew thousands of children regularly visited the museum, and he thought he could take advantage of those visits to launch the new product, both in order to conduct previous market research studies and to promote the product after launching. Until then, the relationship between Bimbo Group and the museum had been based on an alliance involving the Group’s contributions to support museum visiting programs for lowincome children’s schools and some exhibitions. These contributions only accounted for a small percentage of the company’s earnings, but they meant a sizeable support for the museum and its goal to provide a scientific, technological and artistic communication environment based on games as core mechanism. In exchange for its

support, Bimbo benefited by posting its brand in the museum.

However, José Manuel’s idea opposed Bimbo’s standing policy as regards its social endeavors: low-profile actions having a great impact on society. Its contributions to the museum also followed that pattern: the company granted the funds for various projects not only to provide a kind of social aid, but also to promote its brands or products without advertising in the media as part of a direct marketing campaign. This new idea could add to other marketing efforts deployed by the company. It also meant deriving additional value from the Bimbo Group and Papalote Museo del Niño 2 partnership, but it would also change the way in which the company had usually operated with its social partners before.

Still, certain aspects had to be considered before making a decision. The idea agreed with the company’s philosophy to seek innovative means to generate profits enabling Bimbo Group to grow and, as a result, help social causes. In addition, it would allow for a reliable platform to launch Bimbo Kids, thus supplying a competitive advantage.

Also, ethics had always been paramount to the Bimbo Group in its business behavior. In this regard, José Manuel believed “ethical aspects are a competitive advantage, though they are not tangible in business.

Companies are meant to do business. Sometimes, business opportunities are lost on account of certain principles. For Bimbo, pursuing its ethical principles is always good business, even if it means missing out on some specific transactions.” In other words, Bimbo refused to take part in any deals involving illegal terms, although it might mean economic losses, to preserve its internal and external image.

José Manuel thought taking advantage of the partnership with the museum would not be against company ethics, rather it would enhance their link to the Papalote Children Museum, its market and the new product line.

The marketing strategy designed for Bimbo Kids was quite clear in its slogan: “Bimbo Kids, children’s special bread”. With this new brand, Bimbo sought to bond with children through a specially-made nutritious product, with a different packaging, a somewhat sweet flavor, and, above all, a chance to reshape its alliance with the museum.

Therefore, the question was whether Bimbo should consider the partnership as an opportunity to develop a competitive advantage through the children visiting the museum in order to carry out line samplings and to launch the new product line. José Manuel had to discuss this plan with the Bimbo Group and the Papalote Children Museum.

Bimbo Group

Panificación Bimbo S.A. opened its first bread production plant on December 2, 1945, at the Santa María Insurgentes colony in the Federal District. Its founding partners were Lorenzo Servitje Sendra, Jaime Sendra Grimau, Alfonso Velasco, Jaime Jorba Sendra y José T. Mata. Plant facilities included an office building, a dock, a warehouse and a somewhat rudimentary production room, for some operations were manual. At that time, the company had 38 employees, 5 stockholders, 5 products and 10 vehicles.

As of 1980, the Bimbo Group (from now on “Bimbo”) went public at the Mexican Stock Exchange. According to company sources, Bimbo was not listed in foreign stock exchanges because it did not need to seek financing on an international basis, since its operations were covered by the domestic market. Later, during 2000, Bimbo’s consolidated net sales rose to 31,477 million Mexican Pesos (Mex$), 2.7% more than the year before, due to its 5.9% increase in international operations.

By late 2001, Bimbo was already one of the world’s leading bread companies on account of its brand positioning and production and sales volume. It was also the market leader in Mexico and in 90% of the Latin American countries where it operated. With operations in 16 American and European countries, it had hundreds of prestigious brands and products. As a result, the company had grown and its product portfolio had diversified to include production, distribution and sales of a wide array of packed bread, home-style pastries, crackers,

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