Artisanal Production Reaches National RetailersBy Gabriela Mastache | Thu, 05/28/2020 - 16:03
Transforming an SME into a larger company is a necessary transition to move to a more competitive position, says Jorge Valdés, Co-founder of Bolis d Lucy. “It is a significant challenge moving from an artisanal to a quasi-industrial production.”
In less than 20 years, Bolis D Lucy, a Mexican company that manufactures and commercializes flavored ice pops, or bolis, moved from being a micro business operating through street vendors to marketing its products through leading retailers such as Liverpool. “Bolis d Lucy’s operation started out as part of the informal market and we commercialized our products outside of schools,” says Lucía Rangel, Co-founder of Bolis d Lucy.
According to Rangel, the company started with one person producing 60 bolis and six flavors per day. Since then, it has introduced more than 40 flavors. The company’s production capabilities evolved at first through inertia, Valdés says. “When our daily production went from 60 to 400 bolis, we still did everything manually. We had work tables of people working as if they were on an assembly line. After we reached the 400 mark, we realized that we had surpassed our manual capabilities.” The change in the production was felt mainly in the filling and packaging processes. “We acquired special liquid filling machinery, since we needed them to be able to manage the viscosity of our different flavors,” says Valdés.
With a total of 44 employees, Valdés says the company manufactures 15,000 ice pops on a daily basis and has the capacity to increase production. “We make around 35 bolis per minute and manufacture 15,000 bolis per day. We could reach a daily production of 22,000 but that would entail reaching the ceiling of our current manufacturing capabilities.”
Although the company started as an informal business, Valdés says that its transformation to the formal economy and its entrance to “Orgullo Morelos,” a state government program that guarantees the quality and authenticity of products from the state of Morelos, helped the company to position its product with national level retailers like Liverpool and Oxxo. “We started selling a small number of products through Liverpool in 2014 and now it is close to becoming our main client, purchasing almost a million units per year,” says Valdés. Bolis D Lucy has also entered 60 Oxxo stores in the state of Morelos and is in Sears stores in Mexico City, from where it hopes to expand to Sears stores in other parts of the country.
With commercial operations in 21 states through company stores and through retailers like Liverpool and Oxxo, Valdés says that growing the company’s production capabilities is a must. “Our medium-term vision is to set up a production site in Irapuato, Guanajuato,” he says. Setting up production in the Bajio region obeys to two key factors that are needed for the continuous growth of the company: logistics and inputs. “From Irapuato, we can distribute our product through the rest of the country more easily than from Morelos. Moreover, the region is an important dairy basin that will allow us to obtain milk at a much more competitive price,” says Valdés.
The quality of its inputs is a key factor in the company’s success, adds Valdés. “The quality of our product has helped us to stay ahead of our competitors. From the beginning, we have used high-quality products that are leaders in their category. We do not use substitutes or inferior products.” Moving its production from Morelos to Guanajuato would allow Bolis D Lucy not only to reduce costs but also to control the production process from start. “Given that 80 percent of our product input is milk, our intent is to obtain raw milk and carry out the pasteurization process ourselves. This would allow us to reduce our costs by around 40 percent,” says Valdés.
Bolis D Lucy has enjoyed significant success in the retail arena, and Valdés says that establishing its manufacturing plant will allow the company to easily triple production. “Working the same shift we are currently working, we hope to produce at least 45,000 pieces per day.” The increase in production would allow it to position bolis in more Oxxo stores, not only in Morelos but also in Mexico City. “Morelos has 315 Oxxo stores and we are present in 60. We also see an opportunity to enter Oxxo stores in Mexico City, where they have over 3,000 stores.” Rángel says that the company still has significant room for growth in the country. “We want to focus in the states in the center of the country. We believe that if we can build a strong foundation in the center of the country, growing to other states or other countries will be easier.”