Introduction to Jose Antonio Fernández Garza-Lagüera
Jose Antonio Fernández Garza-Lagüera is set to become the new CEO of Fomento Económico Mexicano (FEMSA) on November 1, 2022. He has outlined a multi-year plan for OXXO, one of Mexico’s leading convenience store chains, with annual investments exceeding $1 billion in Mexico.
FEMSA’s Continued Focus on Mexico
Fernández Garza-Lagüera emphasized that Mexico will remain a significant contributor to FEMSA’s value creation in the future. He stated, “We will continue deploying more than $1 billion in our capital expenditures (CapEx) in our home country every year… Mexico will continue to play a disproportionately large role in value creation for FEMSA going forward.”
Targeting the Coffee and Food Segment
During a conference with analysts to present FEMSA’s third-quarter financial results, Fernández Garza-Lagüera highlighted the potential in the coffee and food segment, given OXXO’s status as one of the largest sellers of coffee.
- Current low traffic in the breakfast consumption segment
- Opportunity to increase participation in the morning coffee market
He mentioned, “Coffee and food categories are where we can make significant improvements. We have conducted a thorough diagnosis of our value proposition and are currently in the experimental phase to launch new offerings under a multi-year program.”
Coffee Sales Growth and Aliances
Fernández Garza-Lagüera pointed out that coffee sales are growing at a double-digit rate, which keeps him optimistic. He also mentioned recent alliances, such as the partnership with Sbarro, an international pizza chain, to test food offerings like pizza in OXXO stores.
He acknowledged testing brands like Doña Tota, which has shown promising results. However, he emphasized that growth will primarily come from breakfast and on-the-go food options.
“This is for the Mexican road warrior where we see a need, where our consumers are genuinely demanding more opportunities, and where I believe we can differentiate ourselves from the tacos category.”
Transition to Niche Format
Fernández Garza-Lagüera revealed plans to have 40% of OXXO stores operate under the niche format within the next decade.
- Target: At least 10,000 new stores over the next 10 years
- 60% traditional stores, 40% niche format stores
Currently, the niche format accounts for 15-20% of new stores. These units are typically found in corporate buildings, hospitals, and universities, requiring less staff and offering a distinct product range.
Key Questions and Answers
- Who is Jose Antonio Fernández Garza-Lagüera? He is the incoming CEO of FEMSA, taking office on November 1, 2022.
- What is FEMSA? Fomento Económico Mexicano (FEMSA) is a Mexican multinational beverage and convenience store company.
- What is OXXO? OXXO is a convenience store chain owned by FEMSA, known for selling beverages, snacks, and other daily necessities.
- What is the plan for OXXO under Fernández Garza-Lagüera? The new CEO plans to invest heavily in Mexico, focusing on the coffee and food segment, increasing niche format stores, and testing new food offerings.
