How Grupo Bimbo Harnesses Cutting Edge Technology To Become An Industry Leader

We often attribute technological savvy to the young, being “born digital.” The corollary is that the rest of us are necessarily slower to take advantage of new technologies.

The opposite is true of one of the world’s largest food producers Grupo Bimbo. Though not necessarily a household name, the brands they have acquired over the years – Sara Lee, Thomas’, Entenmann’s, Oroweat, among others – are a who’s who of classic American favorites. Then there are the hundreds of in-house brands which feature Osito, the iconic white Bimbo Bear beloved by Latino consumers throughout the U.S., Europe, and Latin America.

Due to the firm’s near-exclusive focus on baked goods which include pastries, donuts, bread, buns, muffins, bagels, cupcakes, crackers, tortillas, candy, and cookies, Grupo Bimbo is the industry’s largest industrial baker with 203 plants in 32 countries.

Founded in December 1945 in Mexico City as a modest family-run bakery, Bimbo has grown to become a behemoth with $13 billion in annual revenue and producing over 13,000 delectable offerings. Equally impressive to Bimbo shareholders (the company trades on the Mexican Stock Exchange under the ticker symbol BIMBO, and over-the-counter in the U.S. OTCM: BMBOY) is the fact that the global bakery market is massive and projected to enjoy strong year-over-year growth. In 2020 the industry reported $453.74 billion in sales and is expected to see 7% CAPGAR and $672.66 billion by 2026.

In addition to the massive infrastructure needed for producing millions of packaged goods, Grupo Bimbo operates over 50,000 vehicles, one of the world’s largest commercial fleets, to reach its 3.2 million points of sale. Baking is a labor-intensive undertaking and maintaining high-quality standards at the scale of Bimbo’s size requires leveraging technology from a massive volume of data points, from ovens and mixers to packing machinery and conveyor belts.

Enter Raúl Obregón, Bimbo's chief information, and transformation officer, the mastermind behind one of the food industry's most transformative data management and logistical initiatives.

"We're a 75-year-old company baking across the globe in the 21st Century," Obregón says from Grupo Bimbo’s modernistic headquarters in Mexico City. "Digital transformation is key to our continued success and for accelerating growth.”

As is common in corporate high fliers, Obregón climbed the ladder from the bottom, joining Grupo Bimbo in 1998 in route sales and working his way up to regional sales manager at Bimbo Bakeries USA (BBU). His big opportunity came when he was hand-picked to serve as president of Bimbo Latin South. As his career progressed, he noticed that decision-makers often lacked the actionable data and business intelligence necessary to weed out inefficiencies and drive productivity.

Motivated to maximize his impact on the company he had grown up with as a child buying treats at pandeiros in Mexico City, Obregón opted to seek out the firm’s top IT leadership role. In relating the story he proudly mentions that last year marked the 10th anniversary of Bimbo’s factory and fleet automation initiative. But the innovation goes much deeper than that, he emphasizes.

To revolutionize the firm’s existing IT systems, Obregón created a strategy for combining the company's existing IT systems with a real-time loT (Internet of Things) infrastructure, artificial intelligence (Al), and robotics. Over time, this foundation of leading-edge technologies has become Bimbo’s core strategic operational plan.

“It all begins with data and analytics,” he adds. “And to bring the right data and leverage our global reach, we are progressing in the implementation of our standard solutions, or Future Systems Landscape (FSL) as we refer to it internally.”

Functioning as a company-wide technology incubator, Obregón says FSL is powering much of the company's digital transformation.

"We have a dedicated group of more than 75 individuals across Mexico, the U.S., and Spain. They are dispersed within different areas of our company and are tasked with constantly looking at ways to accelerate growth and productivity through innovation," he said.

The power of FSL is that it connects everyone and everything, he states. “Touchpoints from consumers, customers, and our own associates, as well as all the different pieces of equipment are gathered through our Internet of Things (IoT) initiative that we call GB Connected.”

More recently the availability of real-time data across the company’s global operations emerged as a crucial asset for dealing with supply chain issues and managing the effects of inflation.

“We have built flexibility in our supply chains including inventory, portfolio, processes, and strong relationships with our suppliers,” Obregón says in commenting on how ingredient shortages were mitigated to avoid production line slowdowns. “Of course, there is a limit to what these levels of flexibility can do, yet they sure help buy some precious time to find alternatives.”

When it comes to inflation, he states that ‘what if’ analysis using timely data has been a principal driver in cutting costs as prices fluctuate.

“We’re constantly using information to analyze pricing effects across our Value Chains and, even with some of our work around Revenue Growth Management,” he says. “Many of the countries where we operate have had historical inflation rates much higher than those observed in the U.S. today, and in operating under those conditions we’ve learned how to benchmark alternative suppliers and inventory levels to better manage under these types of scenarios.”

Obregón also credits technology for Grupo Bimbo’s well-earned reputation as a global leader in green and sustainable business practices. Over the years the firm has pioneered workplace automation, carbon reduction, and waste management by investing heavily in technologies throughout its supply chain. Many of Bimbo’s ambitious carbon reduction goals are met annually he says, in large part by bringing online cutting-edge mixing and baking equipment to drive down the amount of water and energy used in its production facilities.

He adds that one of the biggest opportunities the company has identified for cutting future carbon emissions is in the firm’s massive transportation infrastructure.

“We’re the owner of the industry’s biggest commercial fleet and many years ago we recognized what creating greater efficiencies could mean to lowering our carbon footprint and doing our part in improving air quality.”

From a standing start just ten years ago, Obregón says his team has developed several automated and AI-enabled vehicles designed for highly specific uses. All are powered by rechargeable ion batteries and are guided by programmable logic controllers (PLC), enabling them to operate entirely without human oversight. He adds that recently they brought into service the fifth generation of inventory control and loading dock robots. Fully autonomous street-ready delivery trucks are now within view, he says proudly.

“Up until now our AGVs have been strictly for internal operations,” he states. “However, as autonomous commercial vehicles evolve and become safe and viable, Grupo Bimbo plans to incorporate them into our global distribution systems. We envision this occurring in a staged approach to ensure maximum efficiency and to the highest public benefit.”

Beyond the value the company’s foray into robotics brings to operations, Obregón adds the potential upside may extend to providing technology to other food producers. In 2021 alone the Automated Guided Vehicle market racked up $4.02 billion in sales and is expected to experience a growth rate of around 9% annually, potentially hitting roughly $9 billion by 2030.

Just last year, Grupo Bimbo sold their interest in Kanan Smart Solution, a food quality control systems manufacturer, to Mekitec Group. For several years the global bakery has relied on Mekitec’s X-ray inspection systems, powered by Kanan’s software solutions, to achieve the industry’s highest level of quality control. Backed by Bimbo Ventures, Grupo Bimbo’s venture arm, the agreement will enable Mekitec to increase its focus on baking solutions to help bakery goods manufacturers reduce waste through better end-to-end traceability.

Even though Grupo Bimbo’s AGV is possibly the company’s crown jewel when it comes to skunkworks innovation, he says the firm’s ownership and board of directors are equally proud of their sprawling organization’s embrace of Digital Transformation.

“We’ve made the commitment to position us as a leader in state-of-the-art data and analytics, all of which underpin Grupo Bimbo’s four principles of investment, capital expenditure, innovation, brands, and point-of-sale,” he adds.