Latin America is known to be a key strategic growth market for most FMCG companies and is one of the most culturally diverse in the world. As of 2016, its population was estimated to be more than 639 million people with an overall GDP of 5.5 billion US dollars, which makes the region a desirable place to make do business. Paradoxically, Latin America is characterized by a historical politically complex context, highly volatile economy and unpredictable future. This is the reason why we have invited Bobby Mendez to this edition of the Career Success Podcast, so he can shine some light on what today’s Latin American consumers are looking for, as well as the future of business in the region. Bobby is the current President LATAM at Duracell, previously he was the CFO of the Company and in his past, he had a career in Finance at Procter & Gamble mostly in Latin America. His experiences makes him the perfect guest to tell us about how to overcome Latin America’s toughest challenges and reach the company’s full business potential.
On this Podcast, we cover:
- Current situation and context around Latin America
- Biggest challenges being faced business-wise.
- How Latin America’s consumer behaves and differs from other consumers.
- Why it is a good place for companies to do business.
- How is the market going to evolve in the next few years
- Tips to be successful in Latin America
Lauren:
Hi, I’m Lauren Stiebing and welcome to this episode of “Career Success Podcast”. Latin America has had its fair share of challenges over the past decade and today we’ve invited Bobby Mendez, the current president for Latin America for Duracell to discuss with us about what today’s Latin American consumers really are looking for. Welcome Bobby!
Bobby:
Hi, great to be here Lauren!
Lauren:
Well thank you for joining us and as mentioned in the introduction I wanted to bring you here to speak with our audience cause you are someone who has a vast experience in Latin America and if you could just give our listeners a bit of context around the region and it’s performance economically in the past couple of years.
Bobby:
Sure, thank you again for inviting me and for calling me an expert. We have certainly come out of a bumpy 2018 highly volatile for the region, but we have high hopes for 2019. We have strong indications as we travel across the region, of growth coming back, consumer confidence is coming back, markets are coming back with a couple of notable exceptions. I think we’re all aware of the case in Argentina which are going through a very tough recession and the unfortunate case of Venezuela. Other than those two very notable exceptions, the growth outlook for the region is quite positive.
Lauren:
And what do you see as some of the biggest challenges at the moment?
Bobby:
The challenges at the moment are for those of us in the consumer goods business to deliver great consumer value. Consumers are becoming very demanding in terms of value proposition your brand represents. In our case, in Duracell, it’s all about making sure that the consumers sees the great value we offer day in and day out, and it really takes an concerted approach across all relevant consumer touch points to do that. So, the biggest challenge for us at the moment, it is just that: making sure we navigate through these, still somewhat volatile waters, while delivering good consumer value.
Lauren:
And how does the Latin American consumer differ from that’s from its neighbors in the US or Canada? Or are they quite similar?
Bobby:
In some ways they are very similar in some other ways there are somewhat different. Similar in the sense that, as I mentioned earlier, consumer value is something that look for in their brands and that is something that as manufacturers we work very hard to deliver every day.
They are somewhat different in the sense, that they are very brand loyal. The Latin American consumer grows up with wonderful brands, surrounded by wonderful brands, and if you find a way to make yourself relevant for them at very relevant points in their life cycle, then you will be rewarded with incredible levels of loyalty. And that’s is the ultimate sign that you have really build an enduring successful business.
Lauren:
And do you believe that Latin America is the right region for companies to be focused on at the moment? And if so why?
Bobby:
I think so, I think so. If you are a global business, you really have to look at Latin America as a source of growth. The region has a history of being very profitable for strong franchises that have established themselves in the region, in the bigger markets. Demographics of the region show that it is a relatively young region, the demographics are quite favorable. I think if you are looking for sources of growth, if you are looking for a proportionate levels of profitability and if you can sustain some level of volatility and you have the business model strength and financial flexibility to do so, then yes I think you have to look at Latin America as a place to invest in and be a part of.
Lauren:
And how do you see the market evolving in the next 3 years?
Bobby:
Our forecast calls for continued growth. We look for the region to provide a growth in the mid-single digits. Some of the structural reforms that are taking hold in the region, particularly in places like Mexico, Brazil, Chile, Colombia, I was just there this week, or even Argentina with all the challenges of making a lot of tough choices. All of those things are designed to provide the needed level of sustainable growth for the future So, our cultural growth some of the trends we are getting excited about the consumer space like e-commerce, things like technology in general are still in its infancy here in the region. You might have heard some interesting investments by a couple of big financial players globally that are looking at the region to make more investments. The rise of specialty stores, convenience stores… Those are all trends that we are familiar with in the developed world but not so much in the developing world. That is the customer and retail Landscape. From a technology landscape, kind of a product formulation landscape, we look at more and more technologies coming into the region cascading from all the parts of the world truly making a difference in consumer sites raising standards of living and so on and so forth. So, we are quite positive about the prospects in the years ahead.
Lauren:
And what tips would you give to leaders looking to be successful in Latin America.
Bobby:
That is a good question. I think for me and my career it’s been staying in touch. I have lived in the region for a number of years I think that is very important to stay in touch, be a part of the fabric of the daily lives of consumers and customers I think that’s very important. The other one is having a healthy balance between your long-term horizon and your short-term horizon. There’s no doubt that the Latin America’s landscape it’s you have to accept higher levels of volatility as part of doing business in the region. So, you have to balance the short with the long-term. You have a resilient business model that can do that then I as I said earlier you get rewarded with higher levels of profitability and consumer loyalty.
Lauren:
Well Bobby, thank you so much for joining us today and I am sure our listeners especially those who aren’t working at the moment in Latin America have a bit more insight on what’s going on in that region so thank you so much.
Bobby:
Thank you, Lauren, happy to help, anytime!