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S e pte mbe r 2015

BRIDGING THE SCHEDULING GAP WITH WORKJAM

THE WAR ON ADDITIVES REVAMPING THE SUPPLY CHAIN WITH SIMPLE HEALTHY INGREDIENTS

TOP10 Sweet Franchises To Invest In


EDITOR’S COMMENT

Are You Working Smarter? D O E S Y O U R B U S I N E S S H A V E room to improve?

Are you thinking outside of the confines of your current state of affairs? In this month’s issue of Food Drink & Franchise, we’re approaching business as usual from a new angle, looking for new ways to take risks and advance. We start with a conversation with Josh Ostrega, COO and co-founder of up-and-coming application WorkJam—an app that is attempting to rethink the way restaurants and retailers manage their hourly employee schedules. By making life easier for management and floor staff alike, is it possible to create a more harmonious work environment? WorkJam thinks that’s a very real possibility, and we’re finding out the how and the why. From here, we’re examining the state of the supply chain industry as Intesource VP of Service Brian Miller discusses the costs and challenges of creating a healthier and more natural supply chain to meet changing consumer demands. We’re also looking at the top 10 sweets and baked goods franchises to consider investing in, for when your franchising instincts take you away from the usual burgers and fries. Are you ready to look at your operations from a fresh angle? Read on and enjoy.

Enjoy the issue!

Sasha Orman Editor Sasha.Orman@fdfworld.com 3


CONTENTS

Features

14

The War On Additives FRANCHISING

6

Bridging the Scheduling Gap

TOP10

Sweet Franchises to Invest In

20 4

September 2015


Company Profiles

28

Aryzta

38 MaxAgro

54

Ingenio Risaralda S.A.

5


FRANCHISING

BRIDGING THE SCHED

Workjam Aims To Improve Th Employees And Employers A Better Approach To Schedul Writ ten by: SASHA ORMAN

6

September 2015


DULING GAP

he Lives Of Alike With A ling

EVERY DAY, THOUSANDS of bar and restaurant managers and owners are charged with the seemingly simple task of maintaining profitability for their business. Considering that the largest overhead costs for a restaurant is labor, it’s no surprise that efficient labor management is a key area a on the path to higher profits. But in the quest for the lowest bottom line,

businesses have been creating a rift between management and the hourly employees that provide day-to-day customer service. While minimum wage has been the most publicized controversy in the restaurant and retail industries, the rise of on-call scheduling has also been gaining attention as a point of contention. “We feel that there’s been a 7


FRANCHISING

68 percent of employers reported that the most difficult part of scheduling is building a framework that takes into account the individual availability of workers.

misalignment with employers and employees,� says Josh Ostrega, COO and co-founder of WorkJam. Named 2015 Retail Start-up of the Year at STORE 2015, the new application that aims to provide a solution that will benefit both sides of the equation. According to research from WorkJam, only 29 percent of hourly workers regularly receive a 8

September 2015

consistent schedule. On the other end, 68 percent of employers reported that the most difficult part of scheduling is building a framework that takes into account the individual availability of workers. What ends up happening is that managers in charge of shift scheduling end up with schedules that fail to take individual availability into account.


BRIDGING THE SCHEDULING GAP

“Across the country there are more and more part time hourly workers, and more and more of them are being put in a position to deal with a lot of unpredictability,” says Ostrega. “They’re getting their schedules without much advance warning, and on top of that there are changing and fluctuating hours based on actual demand. If can’t know your hours in advance, it makes it almost impossible to plan their life. For people who need child care, you can’t wait until Sunday night to get your schedule

and then plan who’s going to watch your kid on Monday morning. This situation in turn leads to unpredictable schedules, canceled shifts, irritation all around and ultimately a disconnect between workers and the business that is not exactly conducive to a productive work environment on either end. “If an employer’s not treating him well—if he doesn’t feel he’s being respected in terms of his time—that employee starts losing respect for company,” he adds. “Then it’s just a

Only 29 percent of hourly workers regularly receive a consistent schedule.

9


FRANCHISING business relationship—they’re just there to get their pay and probably go look for something better.” Ostrega and his partners at WorkJam are attempting to create a solution that’s preferable for both employees and management. Dubbed an “Employee Relationship Management” platform, WorkJam’s goal is to look at areas of frustration on both sides of the situation and building a new scheduling program that takes the pressure off of managers while giving employees more control and agency over their schedules. “When a manager creates a schedule, it’s not just a matter of sitting down and seeing where everybody sits—they have to take everybody’s availability, they have to make sure they’re giving everybody their fair share, there has to be a balance of hours,” Ostrega explains. “A Friday night shift is very different from a Monday morning shift, so you want to make sure that the right people are getting the right shifts and that you’re rewarding your seniority or rotating appropriately. There are also regulations like not working too many hours before you hit overtime. There’s not having 10

September 2015

‘clopenings.’ It’s very difficult for someone to figure out all of this and make that perfect schedule.” WorkJam uses the availability preferences that employees submit themselves to help managers generate ideal schedules—but of course even the most perfect schedule is prone to changing, as life is ever unpredictable. This is where the platform shines for employees and their employers. “Employees can basically see their schedules, and then very easily choose to see if anyone would like to pick up a shift, trade a shift, cancel a shift and make changes and it will automatically get broadcast to one or multiple people on a team who can then choose to take over those shifts,” says Ostrega—it’s an innovation that could dramatically alleviate one of the most stressful situations that hourly employees face. “So many people who work in hourly jobs are afraid to say ‘I can’t take a shift,’ because they know that if they say it too many times they’ll get fired. But the reality is that everybody has lives. So what this does is take away that negative stigma of needing to make a change to your schedule, and makes it easy for


WorkJam uses the availability preferences that employees submit themselves to help managers generate ideal schedules


FRANCHISING people to have a little more freedom in giving up shifts and picking up shifts.” It also empowers employees to stabilize their schedules—and thereby their paychecks—in a previously unprecedented way, an immensely important point. “If you have to call to cancel a shift, it’s really hard to also then say: ‘but can you give me something else to get my hours?’” Ostrega points out. “You’re cancelling, but you’re also trying to get more hours to fill up your week. But with this someone can trade a shift or find another shift to pick up, so they can make sure that they’re meeting their financial obligation and not hurting

their take-home pay. Sometimes there are weeks where people would rather give up a few more hours, maybe it’s exam time or there are other things going on in their lives, and other weeks they’re ready to take on a little more. Again, it just creates a little more empowerment on the employee side to be in control of a certain limited amount of their work schedule.” It’s a clear benefit for employees, but it’s a benefit for employers as well, and not just for the tremendous amount of work and effort that it takes off a beleaguered shift manager’s plate. By empowering workers, employers can foster a By empowering workers, employers can foster a better environment and retain their employees for the long haul

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September 2015


BRIDGING THE SCHEDULING GAP

The reality is that if you hire employees that have a really good fit, they’re going to stay longer

better environment and retain their employees for the long haul—which may not be a high priority for many larger chains and franchises, but as WorkJam posits, perhaps it should be. As Ostrenga points out, the experience and expertise of a loyal long-time employee can absolutely affect a bar or restaurant’s profits in ways that the owner may not consider. “The reality is that if you hire employees that have a really good fit, they’re going to stay longer,

and increased retention is good for companies because of a few reasons,” says Ostrenga. “You don’t have to go out and recruit someone new, you don’t have to go and train them again, and if you always are hiring people and have a high turnover, what happens is that your staff is pretty new all the time and not really that experienced. So that translates into customer service and of course sales. All of these things do hit the bottom line of an employer.” 13


S U P P LY C H A I N

THE WAR ON ADDITIVES

REVAMPING THE SUPPLY CHAIN WITH SIMPLE, HEALTHY INGREDIENTS Brian Miller, Vice President of Services at Intesource, answers some questions about food transparency and related challenges in the supply chain

W R I T T E N B Y: B R I A N M I L L E R

What costs and challenges do restaurants encounter when revamping their supply chains to adapt to such fast changing consumer tastes? The biggest supply chain challenge in altering your menu is finding enough supply to complete the overhaul. While many chains are 14

September 2015

publically aiming to be healthier, organic and more transparent in their offerings, doing so is easier said than done. Restaurant procurement teams need to re-evaluate all existing suppliers to ensure they can meet the new standards, and if they can’t, find new vendors to ensure continuity of resources. These antibiotic, preservative and


THE WAR ON ADDITIVES

Diversifying your supplier relationships and having a rock solid understanding of the supply market is critical for minimising the financial impact of menu disruptions. The more supplier relationships you have in your back pocket, the better chance you have of finding alternative sources of supply quickly, under agreeable terms and at an ideal price point. This streamlines the process of procuring ingredients that fit consumer preferences and incorporating them into the menu. When you have longterm, trusted relationships with suppliers, they’re often more willing to help you meet these changing consumer preferences and partner with you to stay on top of the trend.

GMO free ingredients also cost more. Restaurants then have to decide whether they are going to eat that cost, pass the burden on to the consumers or find other areas to cut back. How can firms rework supplier relationships to make the transformation as smooth as possible?

Many consumers are attracted to fast food because of how cheap it is – but organic food, which they are currently demanding, costs more. How can grocers and restaurants remove additives and preservatives and make food “healthier” while keeping the costs down for the end consumers? One method for keeping the cost 15


S U P P LY C H A I N burden away from consumers is to look for other categories where you can cut spend to lower your overall cost structure and find new pockets of savings. Sourcing indirect categories -- such as facility maintenance, construction, uniforms, etc. – can often uncover savings that can counteract the greater costs associated with using organic, antibiotic free, non GMO, and preservative free ingredients in your menu items. The key to profitably keep up with consumer preferences is knowing how to find new savings in other areas of the business. Another strategy is altering the endproduct so it more effectively aligns

‘Restaurant procurement teams need to re-evaluate all existing suppliers to ensure they can meet the new standards, and if they can’t, find new vendors to ensure continuity of resources’ – Brian Miller, Vice President of Services at Intesource 16

September 2015

with the cost and quality structure. For example, maybe the same dish can be made with chicken, instead of pork, or whichever item is projected to have lower costs for that year. Altering portion sizes – and offering less of the more expensive components – is another common practice. How do firms make sure suppliers have the “seal of approval” and use the healthy, simple ingredients consumers are demanding? Ultimately, it comes down to conducting regular supplier audits. Being proactive about reviews and having proper protocols built into the contract for ensuring ingredient quality will help put greater responsibility on the supplier to make sure their offering is sufficient. Organizations get into trouble when they don’t have the proper visibility into their suppliers’ manufacturing processes. So far, many suppliers have been quick to get onboard the food transparency movement, and have willingly altered their supply to accommodate preservative, antibiotic and GMO free ingredients. Suppliers for Panera and Chipotle, for example,


THE WAR ON ADDITIVES

The supply chain has become a strategic asset for all restaurants. To remain competitive and innovate in this dynamic market, procurement can no longer be solely focused on cost have agreed to reformulate their recipes to comply with this “no” list. More often than not, suppliers will be willing to work with you, since setting you up for success in meeting consumer preferences benefits them as well. The key is fostering collaborative relationships, and being clear around what’s expected. Another example: Walmart recently set guidelines for its suppliers around taking human antibiotics out of chicken products.

Although the guidelines weren’t mandatory, many suppliers still pledged to follow the new protocol. What supply chain strategies can restaurants implement to help them stay innovative and competitive in the dynamic market? The supply chain has become a strategic asset for all restaurants. To remain competitive and innovate in this dynamic market, procurement 17


S U P P LY C H A I N

More and more consumers will demand transparency into their food and menus and demand high quality can no longer be solely focused on cost, but on collaboration, quality, agility, and adaptability. Collaboration across internal departments can go a long way. Think about it – if procurement teamed up with marketing, they’d have a better idea of consumer preferences and market volatility and could forecast and innovate accordingly. PR and procurement could sync up to promote sustainability and 18

September 2015

quality wins from recent sourcing initiatives, giving consumers more confidence in your product offerings. It’s also important to expand your souring goals. The key here is finding the right value from your suppliers and ensuring they can offer the right combination of quality, price and terms, giving you the value you need to create a high quality, innovative product for the market.


THE WAR ON ADDITIVES

‘Diversifying your supplier relationships and having a rock solid understanding of the supply market is critical for minimising the financial impact of menu disruption’ – Brian Miller, Vice President of Services at Intesource How can restaurants reduce the risk involved with menu changes, and still keep up with consumer preferences? The best way to reduce risk is to diversify the supply base. The bigger and more geographically diverse the list of suppliers, and the more variety you have within that list, the more likely you will be able to find alternative sources of supply as menu preferences change. Regularly taking categories to bid through e-sourcing can provide procurement teams with a clear view of what other suppliers, products and prices are available, making it easier to find alternative and natural sources of supply that fit changing consumer tastes. This trend toward food transparency is just starting to take hold. How do you see the “food with integrity” concept taking shape over the next decade? What should

retailers and restaurants be doing now to prepare? The “food with integrity” concept will continue to gain popularity over the next decade. More and more consumers will demand transparency into their food and menus and demand high quality, natural ingredients – and restaurants will continue to meet these demands. Although some consumers today might be willing to pay a little more for peace of mind in the food they are eating, eventually this push for simple ingredients will become even more mainstream, forcing food service establishments to make healthy options the standard, at no additional cost to patrons. Retailers and restaurants need to address their supply chains now, so they’re prepared when this trend becomes the norm. This will ultimately have a strong and rewarding effect on profitability, brand and the mechanics of your business. 19


TOP 10

TOP10 SWEET FRANCHISES to Invest In

Are you considering investing in a QSR franchise of your own? Are you debating between some variation on burger chains or taco shops? While these are always great options, why limit yourself? According to FRANCHISE magazine, nearly one-tenth of the top 200 global franchises operate in the frozen treats and baked goods sector. These ten names are at the top of the list. So when you’re making your decision on the best franchise to further your dreams, don’t rule out the option of dessert first.


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TOP 10

10

PINKBERRY VENTURES

Frozen yogurt is trendy, and Pinkberry is one of the trendiest brands in the game. The sweetly designed Los Angeles-based franchise has been experimenting with up to the minute offerings like dairy-free soft serve and partnerships for delivery. Founded in 2005, Pinkberry is still in serious growth mode with a presence in over 20 countries, most recently Panama.

09

MENCHIE’S

Hailing from Encino in Southern California’s San Fernando Valley, Menchie’s has swiftly built a massive empire on the concept of selling not just frozen yogurt but a flawless and fun guest experience. Menchie’s was ranked one of the fastest growing franchises by Entrepreneur magazine in 2013 and 2014 and a rising star by QSR magazine, and has locations on nearly every continent. 22

September 2015


TOP 10 SWEET FRANCHISES TO INVEST IN

08

YOGEN FRÜZ

While Ontario, Canada-based Yogen Früz was founded in 1986, it has benefited greatly from the recent popularity of frozen yogurt chains. Taking advantage of the latest trends like probiotics and non-dairy alternatives, Yogen Früz has grown rapidly on a global scale, with a presence now in more than 46 countries. Most recently the franchise launched locations in Stockholm and Amsterdam.

07

DAIRY QUEEN

Dairy Queen celebrated its 75th anniversary this year (there were free vanilla soft-serve cones for everyone on the day of the milestone itself), and the ice cream quick service joint is still going strong. The franchise has designs to be the top chain in the fast food world, and a big part of that is domestic and international growth, with a special focus on the Middle East where Dairy Queen has been developing a strong presence for more than 30 years. 23


TOP 10

05

CINNABON

Its cameo as a new career path for Saul Goodman in Better Call Saul this year hasn’t hurt Cinnabon’s fresh image, but the franchise has plans for growth either way. Earlier this year Cinnabon promoted its president Kat Cole to an overarching role with its parent company FOCUS brands, and brought on new president Joe Guith in her stead— as he assumed the role, Guith mentioned the acceleration of multichannel growth as a priority.

06

COLD STONE CREAMERY

Cold Stone Creamery has been bringing its brand of hand-mixed ice cream to audiences around the world for more than 25 years, and the chain shows no sign of slowing down. In 2015 alone Cold Stone entered such vital emerging key markets as Vietnam and India. 24

September 2015


TOP 10 SWEET FRANCHISES TO INVEST IN

03

04

KRISPY KREME DOUGHNUT

Doughnuts are so trendy right now, and North Carolina-based doughnut chain Krispy Kreme has been at the forefront of this trend since the 1930s. Already present in more than 20 countries, last year Krispy Kreme ventured into South America for the first time through a partnership with franchisee Industria de Restaurantes Casuales LTDA (IRCC Ltda) to launch a brand new Bogota, Colombia location. With the success of this latest international venture, Krispy Kreme’s global growth is still very much on the rise.

DUNKIN DONUTS

Just ahead of Krispy Kreme is Dunkin Donuts, the Boston-based East Coast Favorite that has been on a massive growth streak. In 2014 the chain announced plans to open a thousand locations in California over the next few years, with more than a few already open for business by now, and in early 2015 the chain partnered with Asian QSR chain Jollibee to further growth in China.

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TOP 10

BASKIN-ROBBINS Dunkin Brands is a swiftly growing parent company, thanks to the rapid development of Dunkin Donuts and its sister subsidiary Baskin-Robbins. For a while Baskin-Robbins was having a tough time competing against the blitz of frozen yogurt chains cropping up, but traditional ice cream is on the rise once again

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September 2015

and Baskin-Robbins is thriving. “There’s been a lot of recent news come through about ice cream is cool again,” said Bill Mitchell, president of Baskin-Robbins U.S. and Canada, and Dunkin’ Donuts and Baskin-Robbins China, Japan and Korea, in a recent interview discussing the brand. “So we think we’ve already hurdled that same hurdle that we faced in the mid-80s.”

02


TOP 10 SWEET FRANCHISES TO INVEST IN

AUNTIE ANNE’S HANDROLLED SOFT PRETZELS Who doesn’t like a piping hot soft pretzel? It’s the perfect intersection between sweet baked dessert and chewy savory snack, especially when consumers are choosing between sweet choices like raisin and cinnamon or savory choices like spicy jalapeno and

01

meaty hot dog-stuffed pretzel dogs. Auntie Anne’s has made a name for itself growing in the non-traditional model, taking its snacks from malls and airports to stadiums and military bases. This non-traditional model has proven quite successful for the brand, and is propelling it toward international growth with an entrance this year into Aruba and Canada. 27


Ex s

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Aryzta:

xcellence in frozen specialty bakery

rving major brands of Food Service in Brazil, the company is a market leader Written by: Flรกvia Brancato | Produced by: Taybele Piven 29


A R Y Z TA

A

s a global leader in bakery and frozen confections, Aryzta is among the world’s three largest baking companies, earing 4.8 billion euros in profit last year. With 60 plants located in 25 different countries, it is headquartered in Zurich, Switzerland. The company started its journey in Brazil 30 years ago, providing hamburger buns and pies for McDonalds. After a merge in 2008 between IAWS Group PLC and Hiestand Holding AG, the company changed its name to Aryzta and has been part of Aryzta group since 2010. Maintaining its values, Aryzta possesses a differentiated quality concept based on maximum food safety, as well as full compliance with the customers’ expectations. “As the absolute leader in the food service sector in Brazil, the company is responsible for serving 80 percent of the national market,” said the president of Aryzta in Brazil, Claudio Gekker. The industrial structure of the company includes a specialized plant

Bread factory in Food Town - Osasco

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September 2015


I

Flour silos

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PÃ E S E S P E C I A I S

Cookies

in Santo Amaro, São Paulo state, two bread factories in Osasco and Jaguariúna, also located São Paulo state, and another in Juiz de Fora, in Minas Gerais state. In addition to hamburger buns, artisan soft breads, artisan crusty breads, cakes, croissants, and more, the company has also been investing in new lines of products and packaging, including a specific line for retail. Future plans include partnerships with major supermarket chains. Management strategies Since the company’s arrival in Brazil, the process management system has been based on TPM, which evolved into LEAN Manufacturing. “Aryzta RISE is the result of continuous improvement

“As the absolute leader in the food service sector in Brazil, the company is responsible for serving 80 percent of the national market” – Claudio Gekker, president of Aryzta in Brazil

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B

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Setembro 2015


BRAZIL

process that supports our entire operation using Lean tools and techniques,” said Gekker. Investment strategies for training are decided through performance assessment and talent scouting. An internal recruitment program makes all open positions available within the company first. “We promote around 6,000 hours year for internal training, specific bakery training, and allocate about 1% of our net sales,” added the president. To further increase the engagement level, the company holds a monthly meeting, which celebrates the birthdays within the month, and serves as a chance for team members to interact with each other and new products. Gekker highlighted the importance of these meetings. “We have meetings where I talk to groups of employees from all of our factories and offices to understand where we have more opportunities, and so that we have the cooperation and participation from everyone in our business.” As a global benchmark in the food industry, Aryzta’s policies for food safety as well as the safety and health of its employees are based on stricter standards than GFSI and its various certifiers. “We are in the British Retail Consortium (BRC) certification w w w. . c o m . b r

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“We have meetings where I even talk to groups of employees from all of our factories and offices to understand where we have more opportunities” – Claudio Gekker, president of Aryzta in Brazil


A R Y Z TA

Petit Gateau

“Similarly, foods products that for some reason have not been approved for sale are donated to Mesa Brazil, Food Bank and many other institutions” – Claudio Gekker, president of Aryzta in Brazil 36

September 2015

implementation phase. Our Quality Management System and Food Safety is recognized and approved by our clients through annual audits by independent international bodies such as SGS / Intertek / Global Sai,” he said. Environmental responsibility Always concerned with the environment, Aryzta adopts conscious practices to promote employee participation and share the responsibility of improving processes in factories. In 2013, the global Aryzta sustainability board launched a major challenge to all plants: reduce


BRAZIL

Company Information NAME

Aryzta INDUSTRY

Food/Baking EMPLOYEES

Around 550 E S TA B L I S H E D

1937 HEADQUARTERS

Brazil - São Paulo, SP Global - Zurich, Switzerland

20 percent consumption of electricity, water and LPG / NG and reduce landfill waste by 50 percent, all by 2020. Recycling companies collect materials such as cardboard, plastic, metal and burning lamps used in manufacturing areas and offices. On average, more than 12 tons of recyclable material are processed per plant, per year. “Similarly, foods products that for some reason have not been approved for sale are donated to Mesa Brazil, Food Bank and many other institutions,” said the president. Every year, each Aryzta factory donates 12-20 tons of food.

PRODUCTS/ SERVICES

Hamburger buns, Par-baked artesian breads, buns, rolls, muffins, frozen cookie dough, laminated dough, donuts, continental pastries, sweet and savory reception goods and a variety of savory pizzas and tarts MANAGEMENT

President: Claudio Gekker CFO: Regis Santos

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FAMILY TRADITION in

AGRIBUSINESS

Agricultural entrepreneurship from Chile, hand-in-hand with sustainability.

Written by: Rebecca Castrejon, Editor Produced by: Taybele Piven, Director of Operations for WDM Group - LATAM Interviewee: Cristian Kuhlenthal, CEO of MaxAgro

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September 2015


MAXAGRO

A

Packing San Francisco (MaxAgro Business Unit)

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September 2015

lthough it was founded as a family business in 1970, MaxAgro has become an agribusiness leader and the second largest pork producer in Chile. The company has been growing through acquisitions and strategic management, maintaining a progressive development, which resulted in 120 percent growth in 2014, largely thanks to its global export of pork products. After this industrial growth, MaxAgro has allocated part of its investment to social and sustainable programs, such as wastewater treatment and the construction of two biogas plants that generate renewable energy to the surrounding communities, providing them with a better environment by reducing their carbon footprint. One of its major differentiators is quality control in the production area, which has raised its competence in the global market. Being a family business, the company has maintained a close relationship with its local partners and suppliers both domestically and regional, strengthening the value chain from the field. “The company has grown rapidly these past ten years, we now have about 1,600 people working directly in our operations. Being in the front lines of MaxAgro is a tremendous responsibility and a daily challenge, I’m leading a company with such competitive goals,” said the current CEO of MaxAgro, Cristian Kühlenthal. Kühlenthal has been leading MaxAgro


L AT I N A M E R I C A

since 2010, shortly after the integration of all agribusiness units. Under his administration the company has completed several commercial, sustainable and internationalization projects. After generating profits and doubling all productivity, MaxAgro expects to consolidate this volume in the domestic market. “We want to consolidate our pork business in the short run and grow our fruit production by 20 percent,” said Kühlenthal. Agricultural diversification MaxAgro has three main agribusiness units: 1. Fruits. Agricola Lyon is the trade name of the company’s cultivation unit. Lyon cultivates grapes, kiwis, avocados and cherries, among other fruits. Always following the highest quality standards for export to customers in Europe, USA, UK and Asia. Additionally, MaxAgro’s San

Key People

Cristian Kühlenthal Becker CEO of MaxAgro Industrial Engineer from the University of Chile (Universidad de Chile) and with more than 10 years of agribusiness experience in MaxAgro. He joined the mentioned company in early 2005, as manager of the construction project of the slaughtering plant “Planta Faenadora Las Pataguas”. He remained in this position for about four years, during which he also developed the commercialization of meat products in local and international markets. In mid-2010, Kühlenthal became General Manager of Commercial MaxAgro. Subsequently, he integrated an entire operation that until that day existed under various business names, assuming this great challenge as General Manager of the new restructure company MaxAgro.

MaxAgro exports products to more than 50 countries around the world w w w. m a x a g ro . c l

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C O M PA N Y N A M E

A look inside the San Francisco plant

Meat processing plant “Faenadora Las Pataguas�

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September 2015

Francisco plant, ships about 18,000 boxes of fresh fruit to various destinations in the globe, a process that follows climate control and packaging best practices. 2. Pig farms. These are characterized by integrating global premises and certifications within their production processes. To name a few, they have PABCO (Pork Convention regulation) ad the Clean Production Agreement certification of Pigs, including a strict control of dioxins, furans and Polychlorinated Biphenyls, among other indicators of quality. Production takes place in eight branches within Agricola Santa Lucia, Agricola Chillian Viejo and Agricola El Monte. 3. Pork production. From the Slaughterhouse The Pataguas, MaxAgro


SECTOR

Workers in hatcheries

processes different types of cuts to any market. The plant’s certifications include ISO 9001, ISO 14001 and HACCP. Biogas plants As part of its environmental efforts, Maxagro has implemented biogas plants that allowed the production of organic gas or biogas through wastewater treatments and from this the generation of non-conventional renewable electricity for all surrounding communities. With this use of clean energy, MaxAgro will be able to generate up to 50 percent of the energy demand in the localities of Pichidegua or Palmilla. In turn, the company is developing similar projects within their Agricultural units Chillan Viejo and El Monte,

First class quality control

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MAXAGRO expecting to have these implemented at the end of 2016. Today, MaxAgro has achieved more than 90 percent of its production associated with this technology. “Our priority has always been to seek environmental solutions to our production process, which will allow us to move forward hand in hand with the surrounding communities,” said the CEO of MaxAgro, Cristian Kühlenthal.

Production plant

Best practices in the field, hand in hand with automation-technology MaxAgro has been distinguished by its high quality fruit production. This agribusiness


L AT I N A M E R I C A

company follows and promotes best agricultural techniques between all agroprocessing employees, integrating first class automation equipment. “Without our employees, MaxAgro would not be where it is today. Our human resource has been a fundamental part of this growth and the reason why we invest to improve their working conditions. We want them to continue to feel proud of belonging to this great family,” said the CEO. Its processes are highly sustainable, since the workforce respects the environment during cultivation and the automation used lowers the use of natural resources, as well as their biogas plants, which eliminate odors caused from livestock operations. Human management and social responsibility MaxAgro employees are more than committed to their job as members of the food force in the country; meanwhile, the company recognizes their hard work through celebrations and social assistance programs. Some examples are Father’s Day events, motivational seminars, free breakfasts, karaoke, Halloween contests, sponsorships in community sports, holiday celebrations, Women’s Day, events during Easter, Labor Day, and many others. In 2014, the agricultural unit Chillán Viejo was part of Teleton, giving income in the benefit of

Fruits: MaxAgro’s Business Unit

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MAXAGRO children with disabilities. In the environmental context, the company has participated in the Spring Festival in favor of the environment, receiving the national Recyclapolis award in the category of “Air – Sustainability” for its green leadership and in recognition of its innovative biogas plants in Chile. In partnership with Zoetis, MaxAgro uses the vaccine Improvac®, which prevents the risk of bad odor in pork from males, without the need to castrate the piglets

Global and national management MaxAgro’s Supply Chain is the product of added value, quality and first-class certifications, with exports reaching European and Asian economies, delivering meat to more than 50 countries worldwide. For commercialization


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purposes, the company has three global offices: in Tokyo, Madrid and Shanghai, while its national distribution is developed through Don Pork (a Chilean brand), and from six branches located in strategic areas in Chile.

THE INTERVIEW Cristian Kühlenthal, a civil engineer with more than a decade of experience in agribusiness, joined MaxAgro in early 2005, as manager of the construction project of the slaughtering plant “Planta Faenadora Las Pataguas”. Years later, he managed the commercial area, globalizing brands in upscale economies, these milestones earned him the title of CEO, a position he holds today. In an interview with Kühlenthal, he explained us the current production plans of the company and consolidation efforts, after growing more than 100 percent last year, among social, sustainable and innovation activities. Business Review Latin America: What are MaxAgro’s top three differentiators in the agribusiness sector in Chile? Cristian Kühlenthal: We are a family business that focuses on the production of quality products, a process based on vertically integrated models on all of our business areas. For example, in the case of pork production, we control the process since the purchase point,

WHY USE IMPROVAC®? This technology was implemented in Maxagro’s farms several years ago, and it continues to provide a competitive advantage compared with traditional pork production. It delivers multiple and very significant benefits in strategic areas, including sustainability. Vaccinated pigs need much less feed and therefore produce less waste; this significantly reduces greenhouse gas emissions into the environment. The carbon footprint is reduced by more than 6% versus conventional production. Another very important aspect is that we do not need to castrate male piglets, as the vaccine and the control process completely prevent any potential bad aroma or taste in pork. Animal wellbeing and humane production is very important for Maxagro, so stopping physical castration years ago was a big relief for our farm employees and for the pigs. Finally, what we do is for our customers: this vaccine is safe and approved by the strictest regulatory authorities in countries all over the world. Our customers in Chile, Japan, South Korea and several other countries demand and enjoy high quality pork products, and we are proud to deliver it consistently.

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MAXAGRO

“Our priority has always been to seek an environmental solution to our production process, which will allow us to move forward hand in hand with the surrounding communities” – Cristián Kühlenthal, CEO of MaxAgro

Pork cuts for any global market

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manufacturing, breeding, slaughter and commercialization. We are a company that integrates environmental regulations, working with an open door policy, transparency and in direct communication with our neighbors. Finally, all the above points empower and enable each of our employees, constantly seeking new ways to make each of our more than 1,600 employees, feel pride in belonging to our company, through a direct, personalized treatment and mutual respect. They are our greatest capital. BRAL: What is the role of your employees, local farmers, producers and suppliers, in the success of MaxAgro? CK: Our employees are our most important resource because they are the ones with the abilities, inventiveness, commitment and knowledge to succeed, allowing us to continue growing. Undoubtedly, without this great human capital we would not have been able to get where


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we are. Each collaborator has been instrumental in realizing our goals, growing above the market and becoming the second largest pork producer in Chile. In relation to our national and international suppliers, they have also been very supportive on our growth, not only by understanding our expansion plans, but also by becoming part of them. In this case, I would like to highlight one of our greatest allies, Zoetis, a laboratory that through its product Improvac, has allowed not only to achieve better production parameters within our animals, but also to improve our meat quality by optimizing our farm welfare standards. MaxAgro acknowledge the commitment, support and help from each of our suppliers, since they have been part of the sustained growth of the company. BRAL: What social initiatives would the company implement in coming years? CK: Internally, our People Management team works with numerous communications programs to make our employees feel full ownership of MaxAgro. The department also generates quality related contests for our workforce to raise their concerns and ideas on how to improve our processes. We began this path seven years ago under HR Management, which we later renamed “People Management�. Since then, we have carried out various activities, ranging from our quarterly magazine Maxnoticias, to celebrations

Pig farms

Hatchery Chillian

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MAXAGRO

In the opening of the biogas plant in chile

such as Mother’s Day, Father’s Day, Christmas party, Children’s Day, Labor Day, etc. Every day we try to do activities that deliver greater sense of belonging to our workers, and for each of them to feel better about their daily job. We participate in environmental committees and town meetings, and are continuously implementing corporate social responsibilities, aiming to make 2017 our first social report, in order to measure and objectify our various actions. Human resource of MaxAgro

BRAL: Are there any plans to expand MaxAgro’s farms or production plants? CK: We are in the process of expanding our business units, a project we materialized 50

September 2015


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last year with the purchase of two new production farms related to breeding pigs, which pushed our growth by 120 percent in relation to animal production. We are also in the process of integrating these new operations to all production and environmental standards MaxAgro has today, as we want to make this process as quickly as possible so that we can improve current conditions in acquired farms and the environment of our neighbors. This process is a little bit slower, due to investments in technology that are subject to environmental assessment by Chilean regulations. Regarding the business unit of fruit, in recent years we increased our agro more than 500 hectares, with the inclusion of table grapes, kiwi, avocados, cherries, tangerines, etc. In 2014, MaxAgro joined Geofrut, one of the largest fruit exporters in Chile. For the coming years, we plan to expand in a range of 80-100 hectares per year, considering that we have this space available. BRAL: Do you seek to enter other Latin American economies in coming years? CK: Our high quality products integrate global standards for a worldwide distribution. MaxAgro exports products to the most demanding markets such as Japan, Korea, China, USA, England and Canada, as well as to other countries in Latin America and Europe. For that, we continuously review the conditions of each of the markets,

Hatchery “El Monte�

Employees: Bringing added value to every product

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C O M PA N Y N A M E

More information at www.novagri.org


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in order to meet all current international food and industry regulations. We commercialized with nearly 50 countries around the world and every day we investigate new markets. In Chile, we have distribution throughout the country thanks to an alliance with “Don Cerdo” and through a network of six outlets in the south of Chile. In the medium term, we seek to consolidate Maxagro as the second largest producer of pork in Chile, grow orchards in our fields and increase exports through Geofrut.

Company Information NAME

MaxAgro INDUSTRY

Food: Meat and fruit HEADQUARTERS

Huechuraba, Region Metropolitana, Chile FOUNDED

“MaxAgro acknowledges the commitment, support and help from each of our suppliers, since they have been part of the sustained growth of the company”

1971 EMPLOYEES

1,600 REVENUE

US $160 a 180 million WEBSITE

www.maxagro.cl

– Cristián Kühlenthal, CEO of MaxAgro

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SUGARCANE RESOURCES with Added Value

Risaralda transforms and maximizes the potential of sugarcane for renewable energy and to provide products that meet expectations with sustainable development.

Written by: Mateo Rafael Tablado, Associate Editor Produced by: Taybele Piven, Operations Director at WDM Group – Latin America

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INGENIO RISARALDA S.A.

I Headquarters of Ingenio Risaralda in Colombia

Sugar-different presentations

ngenio Risaralda is a young Colombian sugar mill founded in 1973. The company’s basis were created in association with various entities, including civil and private organizations, as well as support from the government. In 1978, Risaralda started assembling machinery for milling, with operations that produced an average of 800 tons per day. In the 1990s and after facing great challenges, a productive expansion enabled the growth and modernization of Ingenio Risaralda. Following these development steps, Risaralda inaugurated a new sugar refinery in 2000, which now serves local customers and multinational clients. In 2006, the mill began working a Biodistillery, participating in the oil and gas market in Colombia, and always following all renewable laws governing this mixture of ethanol. Ingenio Risaralda has produced an average of 100,000 liters of alcohol a day and for the last 10 years. It has increased its commitment to quality and competition. And thanks to the expansion of business lines through value added foods, the company has improved its processes and working conditions for their employees. Added Value: Diversification The competition in domestic and global markets with other Colombian sugar mills, were the main factors for Ingenio Risaralda’s evolution, from being a processor and provider of raw sugar

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cane, to become the first refinery to develop other business units.

Key People

The company markets value-added products and today offers five varieties of sugar: brown, white, special white, refined and pulverized sugar. Ingenio Risaralda has an electricity generating station capable of producing 13.5 megawatts at a frequency of 60 Hertz, capable of autosupply their operations and provide surplus to the national electricity system in Colombia. In addition, the company will open its new cogeneration power plant with a capacity of 33 MW. This is coupled with the aforementioned operation to produce ethanol for fuel by using

Cesar Augusto Arango Isaza General Manager at Ingenio Risaralda Arango is an Industrial Engineering that graduated in 1973 from the Technical University of Pereira, the capital of the department of Risaralda (Colombia). He started working at Ingenio Risaralda in February 1999, and has been part of this family for more than 15 years, during which the company has experienced diversification in its product line and value creation. Arango has received individual awards such as the Order Gonzalo Vallejo by the Departmental Assembly of Risaralda, among others.

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Sugar cane processed in Ingenio Risaralda

all waste from the sugar mill. The compost is distributed through Kompostar trademarks and Nutrihumic. Compliance with Global Standards Sugar Mill

Bio-distillery at Ingenio Risaralda

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In addition to various quality labels, Ingenio Risaralda has international certifications such as: - BASC: which ensures safe in international trade, - Certification Management System under the Food Safety Standard - International Food Safety System Certification 22000: which ensures that the sugar they produce is safe. - ISO / IEC 17025-2005 Laboratory Bio-distillery: which certifies the technical competence and reliability of the data issued


SECTOR

Workers and contractors

by the laboratory for Ethyl Alcohol, enabling compliance with the requirements for marketing this type of renewable fuel. Ingenio Risaralda has also received local awards by the Chamber of Commerce, Department of Pereira and local government agencies. Business and Community Partners Ingenio Risaralda has increased its quality standards, which are being followed by their main suppliers: cane farmers. In partnership with organizations such as Cenicaña and FUNDEAGRO (the Foundation to improve the productivity of sugar cane). Additionally, they have released programs that promote environmental, economic and social developments.

“Ingenio Risaralda has increased its quality standards, which are being followed by their main suppliers: cane farmers”

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INGENIO RISARALDA S.A. Other allies are CIAMSA (International Marketing of Sugar and Honey,) and SERCODEX, the customs agency that has managed quality in Colombian products before they are shipped abroad, primarily to Peru, Chile, USA, Europe, Russia, among others. Vanguard Storage

Storagev

One of the latest innovations in Ingenio Risaralda is their storage system or “drive-in,” which allows them to transfer merchandise placed in structures, in which the forklift moves easily. For example, bringing products to market

Somos la compañía número 1 en suministro de materiales mecánicos para el sector industrial e hidrocarburos de nuestro país, con una trayectoria de más de 40 años. Estamos comprometidos con nuestros clientes en brindar valor agregado en el desarrollo de proyectos con calidad y eficiencia, teniendo como base el mejoramiento continuo de nuestros procesos y la permanente capacitación de los colaboradores que conforman nuestro equipo de trabajo.

www.casaval.net


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share, whose shelf life is closer than other within the same facility. The system itself can store 3,500 tons of sugar, or 38 tons racks, distributed in thirteen rows and seven vertical levels.

Company Information NAME

Ingenio Risaralda S.A.

In addition, all logistics of Ingenio Risaralda are maintained and tracked via satellite. Contemplating until 2024 In Its Strategic Management Plan 2015-2024, Ingenio Risaralda seeks to become a world-class sugar mill, with a perfect use of sugarcane and near-zero waste thanks to its use in bio-fuel, and always following high standards of social and environmental responsibility.

INDUSTRY

Food – Renewable energy and Agribusiness HEADQUARTERS

Risaralda, Colombia FOUNDED

1973 EMPLOYEES

490 REVENUE

USD $225 million WEBSITE

www.ingeniorisaralda.com

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FDF World - September 2015  

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