During 2016, we incorporated Nutrisa® into the structure of Grupo Herdez and identified the following strategic priorities: i) make decisions based on profitability and brand building; ii) target efforts towards customer care and preferences; iii) the efficient use of resources; iv) tighten relations with franchisees; v) improve corporate service to stores, and vi) optimize organizational structure.

i) The main actions for improving in-store profitability were:

-We raised the price of yogurt ice cream nationwide, based on a price elasticity analysis.

-We slimmed-down promotions.

-We stimulated store traffic.

With these changes, gross margin grew significantly at year-end.

ii) We focused on consumer preferences with the following actions:

-We launched seasonal flavors in yogurt ice cream, traditional ice cream and ice popsicles, as well as toppings in synergy with Hershey’s®, Nestlé®, Ricolino®, and other brands.

-We strengthened our commercial portfolio with snacks, food supplements and super foods. Under the Nutrisa® brand, we targeted efforts to the launch of products with functional properties and ingredients, enabling us to bolster our position in the health and well-being segment.

iii) In the efficient use of resources:

– We reduced capital invested in openings. We leaned towards strategic openings and franchising.

– We prioritized the use of means to generate traffic and optimized advertising spending.

iv) We tightened relations with franchisees:

– We strengthened communication channels.

– We optimized the franchise service model, which has improved quality standards and sales.

v) We improved corporate services to stores:

-We streamlined the hiring process of store personnel.

vi) We optimized organizational structure:

– We optimized organizational structure by integration the areas of Administration and Finances, Logistics, Human Resources and Systems into Grupo Herdez.