Joining forces with raw materials suppliers and strategic partners in logistics takes Simplot to the top of the frozen french fries market
John Richard Simplot gave his own name to the company he founded during the late 1920s in Boise, Idaho, a state widely known for its high volume of potato production. The JR Simplot company has always been a standout in innovation, besides facing and surpassing different challenges, detecting opportunities and making the most of them to achieve growth for decades, developing the business of frozen french fries, and becoming an empire after striking important deals with the McDonald’s fast-food chain and its owner, Ray A. Kroc.
Currently, Simplot generates 11% of french fries imports in Mexico, and, along two other companies, adds to 60% to 65% of the specialty’s global production.
Through its food, agriculture, turf and livestock divisions, Simplot generates value in the food industry, providing resources to support its suppliers and relying on these resources to thrive in the global market since the early 21st century, with a decade’s worth of labor in Mexico.
“We are interested in winning, we think Mexico can host world-class organizations,” commented Luis Alberto Rodríguez Mastache, CEO for Simplot Mexico, and also in charge of the Central America territory for the company.
Corporate experience to face any challenge
Rodríguez Mastache earned a Bachelor’s degree in Marketing from ITESM (Monterrey Institute of Technology and Higher Education, in Mexico), graduating with honors through a scholarship. Afterwards, he completed an MBA from IPADE (PanAmerican Institute for High Business Management, in Mexico), he also completed Humanities studies at the University of Granada (Spain) and the Strategic Business Negotiations Program at Ivey Business School (part of the Western University, in Canada). His 30-year experience has led him to different areas such as sales and operations, besides marketing, working for multinational companies in the food and beverage industry, and being part of Simplot since 2015.
“It’s our duty to make our organization grow in Mexico under the values the company has displayed: generating value along with suppliers, clients and distributors,” the executive said.
Alberto Ponce is in charge of the supply chain. Ponce earned a degree in Industrial Engineering from ITESM (State of Mexico campus), and also earned an MBA from the University of Texas at Austin. His 14-year experience has led him to global companies such as Colgate-Palmolive, Coca-Cola and Philip Morris.
“To achieve growth, we need the right people. Once the right people are here, the most important thing is keeping the talent in a safe environment,” pointed out Ponce, Supply Chain Director for Mexico and Central America at Simplot.
Value for clients, distributors
and for the company
About 400 million pounds worth of potatoes are imported into Mexico, which, along with the 350 million pounds imported into Central America and the Caribbean add up to 750 million lb, which amounts to almost a billion lb in a global market worth 26 billion lb of potatoes. Simplot’s main focus is on food service businesses, which includes restaurants of every level, grocery stores, retail chains and other specialized outlets.
“Our value proposition offers solutions for what our clients are looking for,” Rodríguez Mastache declared.
Support from the parent company in every front
The structure providing support to the Simplot Mexico operation covers beyond the values and principles of a family business, which brought success to the company in its home country, but it’s also based in three key factors:
Strategic support: The necessary support to design and track the company’s course, from goals to the different ways to carry out plans.
Product portfolio: The Quality Assurance and Research & Development departments contribute to deliver products with the highest quality and consistency; R&D also directs efforts to upcoming innovations. As a result of such efforts, the company is able to offer a product that maintains its temperature for 40 minutes, resulting in a warm, crispy product as delivery customers receive their meal.
Innovation system: Investment in technology and standardized systems, answering to processes deployed during the last two years, led by the implementation of the SAP-HANA ERP platform.
This structure allows Simplot Mexico and affiliates worldwide to work with freedom, responsibility and authority to make decisions and carry concrete actions to increase profitability.
Larger production ability
To back Simplot’s strategic positioning in the fries specialty, the company opened new production plants in Argentina and duplicated its production capacity in Canada and China.
Regarding Mexico and Central America, Simplot doubled production capacity for avocado in Mexico, with the company’s plants in Morelia and Irapuato leading the way.
“Our production facilities in Mexico deliver global production for Mexico, the United States and Asia,” Ponce commented.
Challenges faced by logistics
One of the most important tasks in the Logistics department for Simplot Mexico is developing distribution networks, considering how fragmented distribution is in Mexico, as delivery to every food service unit becomes a challenge.
Synergies have been developed to counteract the contraction among available carriers in the US to bring the product down to Mexico’s northern border and rely on a nationwide distribution network.
In Central America, the company is developing a similar network, able to work with the same efficiency as the one in Mexico does.
“Our distribution partners are doing a great job, we are setting up agreements with Mexican entrepreneurs to reach more locations,” Rodríguez Mastache declared.
Simplot’s strategic partners in logistics operate units furnished with GPS, led by monitoring stations for easy location 24/7, in the same way maritime shipping lines operate tracking platforms.
“We strive to promote solutions along with our distributors and show them that investments in technology are important as it is connecting through social media, offering different options and the importance of delivering a quality product,” Rodríguez Mastache commented. Achievement via Simplot Grower Solution Depending from different potato farmers led Simplot to create the Simplot Grower Solution advisory services, which provides resources such as information, valuable data and advanced products for farmers to obtain successful crops.
This program has been successful with small farmers in the US and Canada, in the same way it has been developed in Mexico, so far, under the “Partners in Growth” brand philosophy.
“In this way, we guarantee quality and support our partners’ growth,” Ponce added.
“Great Place to Work”
Simplot Mexico considers the long term as an important factor to create and maintain sustainable systems, also in aspects such as driving its workforce development. Such an environment favoring outstanding performance has not only earned Simplot Mexico being listed as a “Great Place to Work”, but has held the company in this ranking during the last four years, factoring along other elements such as the professional/personal life balance aspect among employees.
“We all have leadership within our duties, we all have a leadership example for things to happen,” Ponce concluded.