Interview with Daniel Servitje, Grupo Bimbo CEO by: Imagen Empresarial

Daniel Servitje,

Grupo Bimbo CEO

Carlos Mota: We are talking to Daniel Servitje, who is Grupo Bimbo CEO, and cochairman of the B20 Food Safety Working Group, whom I would like to thank for taking this call to talk about the B20 and the next G20 meeting.

Dear Daniel, how are you? Good morning.

Daniel Servitje: Good morning Carlos and good morning to the audience

Carlos Mota: GThanks for talking to us Daniel, what motivated you, how is it that you are now participating in the B20, in the issue of food safety?

Can you tell us a little bit about the history of how this group was comprised, because not everyone is familiar with it?

Daniel Servitje: Of course Carlos, well this is a group that somehow runs in parallel with the G20 meetings, the group of the 20 most important countries of the world, and it is a group made up basically of the CEOs, general directors of important companies in the world whose purpose is to address other relevant topics in the world agenda.

One of the issues that the G20 and we have undertaken in this group of entrepreneurs is that of food safety. We have worked on this issue for a couple of years now, and I had the opportunity to participate as a member of this group in the last meeting in Cannes, and now they have asked me to co-chair with the Unilever CEO worldwide, in this food safety group, made up of 18 international companies and organizations.

Carlos Mota: Daniel: What is food safety?

Daniel Servitje: Well, food safety, what is…. The challenge we have ahead of us Carlos is basically to feed the current generation in a sustainable manner, as well as the over 9 billion people we expect to have by the year 2050, and the challenge is huge because it entails doing it under the context of water restriction and we don’t have more farming land in the world if we want to preserve the biodiversity we have on Earth.

Carlos Mota: PSo for this purpose you are going to take to the presidents and to President Calderón specific proposals, have you already submitted them?

Daniel Servitje: Well yes, that’s what I was saying, it is a process that fortunately, given the importance of the subject, we have been working on it in this working group for about two years, and what we did on this occasion, was to improve some of the recommendations we had made in the past, discuss them under the light of current changes, and since May, we delivered our recommendations to the Sherpas of the Food Safety Group of the G20, to the ministers and vice-ministers of agriculture.

We also delivered them in the World Economic Forum, and during these few weeks we have had interactions also with other audiences to ground the recommendations and align them, in the best way possible, to what will be presented in the G20.

Carlos Mota: Do you have a specific expectation of this meeting, as a result of what you have already submitted?

Daniel Servitje: Well yes, certainly, we are interested in providing our thoughts, our experience on the topic and basically we have very concrete, very clear proposals Carlos, that we believe can help solve this problem.

Number one is that it has to continue being in the agenda for many years, it is not a problem that will be solved making decisions today, but rather something that has to be taken to different fora year after year.

Number two, there has to be alignment between the private and public sectors, and this will have to come together in national programs where there is participation of the private and public sectors, in a program with a scope, I would say, that transcends political time frames.

I would like to point out here Carlos that this effort has already started in Mexico, it is called: “A new vision for agriculture”, coordinated and led by the Ministry of Agriculture and where companies and farmers associations have been working, for about 6 months now, with this purpose; that is, we are going to find out where the bottle necks are, we are going to find and discuss the best production systems and it is already starting to give good results.

This has also been done in other countries of Africa, and anyhow, it is one of the recommendations we believe have to be provided in every country.

And one more, we want to change much of the dialogue on agriculture; from farming aid and subsidies to one focused on promoting entrepreneurship; to create these incentives so that farmers; who are the heart of this project, can become entrepreneurs and not just the receivers of subsidies and aid, and this is a problem prevalent in many countries not just Mexico.

Carlos Mota: Yes, that is right; it is something common; Daniel, we are talking to Daniel Servitje Grupo Bimbo CEO and co-chairman of the B20 Food Safety Working Group.

Daniel, taking this to the private enterprise arena, like you in Bimbo, when you have this food safety discussions under the framework of the B20 and when you go back to Grupo Bimbo, where you lead the strategy that you design and implement there, what happens? How does it translate, if it does? That is, what you discussed under the B20 meetings translates into something in your company? As the company leader, do you supervise the strategies and execute them under the framework of an individual company?

Daniel Servitje: Well I think that is a very interesting question Carlos, I would say that I have learned a lot from this forum, it has given me the opportunity to talk to world specialists of the FAO and to top level think tanks, and I certainly believe that the idea I bring back to the company is that we all have co-responsibility in this problem, we have to make sure that value chains become sustainable as well.

In our case, we are making commitments, for example, in making sure the purchases of palm oil is sustainable to avoid deforestation, not necessarily because we have a deficit in Mexico, but because this will have repercussions in t worldwide supply.

And I would also say that we have been more aware of all the issues related to water; just to let you know, 70% of the freshwater of the world is for agricultural use, thus we have to work with farmers to make sure that ?and it is one of our recommendations? they use water for agricultural purposes in a more efficient way.

And there is a way to do it, by investing One of our recommendations is to migrate subsidies to agriculture, to investment promotion in agriculture, in irrigation networks that can provide greater productivity to farmers and also a more sustainable use of this very scarce resource which is water, right?

Carlos Mota: Of course.

Daniel Servitje: Another area where I think there was a good discussion and a very fortunate conclusion is the issue of biofuels, for example Carlos, in the United States, 40% of the maize cultivated ?and the US is the main producer of this crop worldwide? is devoted precisely to biofuels, ethanol.

Carlos Mota: Yes, yes.

Daniel Servitje: And it is a use we believe is not necessarily the most positive one, especially because it was also subsidized and it had a mandate limit, as it is called, in the inclusion of this ethanol in gasoline.

So we have stated that under this food safety framework, a comprehensive review of the subsidy regimens for biofuels has to be performed, as well as ensure we understand what their environmental impact is; but especially, the promotion of second and third generation bioethanols which have a lower impact in this competition of food and fuels.

Carlos Mota: My time is running out Daniel; but finally, is there anything else you will experience during the next G20 meeting, will you attend the meeting or not?

Daniel Servitje: Yes, God willing, I will be there next weekend, we believe the Mexican Presidency has contributed a great deal to this Summit. President Calderon is very interested in the work carried out by all working groups and a new working group was created to follow up on the recommendations and commitments made by the private sector, which is also a breakthrough in these events, and I think this will give our Country a good standing Carlos.

Carlos Mota: As always, I congratulate you Daniel; in this case regarding the B20 and the G20. Thank you for explaining in detail what you are proposing and hopefully this is heard by the leaders who will be present in Los Cabos and we hope we can talk to you Daniel in another interview so that you give us an update on the Bimbo strategy and how you are doing around the world.

Carlos Mota: Thank you.

Daniel Servitje: See you soon.

Carlos Mota:Thank you Daniel Servitje, Grupo Bimbo CEO and Co-Chair of the B20 Food Safety Working Group.