Molino Cañuelas: Serving Customers from Seed Development to the Kitchen Table

Jose B. Alvarez; Maria Fernanda  Miguel; Mariana  Cal

Case | HBS Case Collection | December 2017

Molino Cañuelas: Serving Customers from Seed Development to the Kitchen Table

by Jose B. Alvarez, Maria Fernanda Miguel and Mariana Cal

Abstract

Molino Cañuelas was a vertically integrated food company with a management system that allowed it to innovate and grow systematically. With sales of $2 billion in 2016, the firm not only produced flour, vegetable oil, and packaged food products, it also owned a port terminal, a packaging plant, and an Agribusiness Services Division to support over 8,000 agricultural producers.
CEO and Chairman Aldo Navilli, who had run the company since 1986 and had developed its management system, wanted to ensure that as the company grew and expanded, it would maintain its culture and working style.
The company was exporting to 32 countries and had manufacturing plants in Brazil and Uruguay. As it continued its international expansion, should it follow the same vertical integration strategy in other countries, or should it develop its retail business through partnerships or alliances?

Keywords: Vertical Integration; Quality Management System; Agribusiness; food industry; Molino Cañuelas; Argentina; Vertical Integration; Quality; Management Systems; Expansion; Global Range; Growth and Development Strategy; Agribusiness; Food and Beverage Industry; Agriculture and Agribusiness Industry; Argentina;

Language: English

Format: Print

42 pages

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Citation:

Alvarez, Jose B., Maria Fernanda Miguel, and Mariana Cal. "Molino Cañuelas: Serving Customers from Seed Development to the Kitchen Table." Harvard Business School Case 518-046, December 2017.

In 2017, Joelle Faulkner, CEO of Area One Farms, a Canadian private-equity fund focused on investing in the best Canadian farms and helping them expand, considered the merits and disadvantages of expanding her business to the U.S. While the markets shared some similarities, Faulkner did not know the U.S. market as well as the Canadian one. Could her joint venture partnership model work as well in the U.S. as it had in her home country?

In 2016, the millennial generation (those age 19 to 35 in 2016), the largest generation by population in the U.S., was entering its prime home buying, family forming, earning and spending years. This generation was showing different beliefs and behaviors than previous generations—beliefs and behaviors that were having a significant impact on the overall economy and in particular on the food industry. This note explores the millennial generation, how it differs from previous generations, and examples of how it is impacting the food industry.

Case | HBS Case Collection | December 2017 (Revised January 2018)

NatureSweet

Jose Alvarez, Forest Reinhardt and Natalie Kindred

This case describes the business model and workplace philosophy of NatureSweet, a privately owned, vertically integrated greenhouse grower and marketer of fresh tomatoes with sales across the United States and $329 million in 2016 revenues. CEO Bryant Ambelang treated NatureSweet more like a consumer-packaged goods manufacturer than an agricultural producer, with a focus on consistency, branding, margin, and price stability, and a frontline-worker-centric production model inspired by the Toyota Production System. Workers—who, because of NatureSweet’s year-round greenhouse production model, were employed full time—were empowered with training and productivity incentives, allowing them to earn well above the minimum wage and advance their careers within the company. Indeed, improving the lives of workers was the explicit purpose of NatureSweet’s operations. Through its financial incentives, personal and professional development initiatives, and worker-appreciation programs, NatureSweet had cultivated a truly unique, uplifting workplace culture in its Mexico operations. Ambelang aspired to replicate the model in the United States as a way of demonstrating the potential to “transform the lives of agricultural workers in North America.” But in late 2017, the Arizona-based production operations that NatureSweet had acquired in 2014 were still struggling to attain the successes achieved in Mexico. This case describes NatureSweet’s history, achievements in Mexico, and challenges in Arizona, inviting students to evaluate the keys to NatureSweet’s success in Mexico and analyze their potential for replication in the United States. Will Ambelang succeed in Arizona and, in doing so, demonstrate that it is possible to transform the lives of agricultural workers in North America?

Keywords: NatureSweet; tomatoes; Agriculture; greenhouse; Ambelang; cherry tomatoes; organizational culture; incentives; worker empowerment; Empowerment; Toyota production system; leadership; branding; produce; manufacturing; Organizational change; Agribusiness; Business Model; Employee Relationship Management; Working Conditions; Organizational Culture; Success; Problems and Challenges; Agriculture and Agribusiness Industry; Manufacturing Industry; United States; Mexico; North America;

Citation:

Alvarez, Jose, Forest Reinhardt, and Natalie Kindred. "NatureSweet." Harvard Business School Case 518-002, December 2017. (Revised January 2018.) View Details

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Molino Cañuelas: Serving Customers from Seed Development to the Kitchen Table

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