Latin America’s Top Executives Reveal Their Inflation Strategies
Institutional Investor Research is part of the Delinian Group, Delinian Limited, 4 Bouverie Street, London, EC4Y 8AX, Registered in England & Wales, Company number 00954730
Copyright © Delinian Limited and its affiliated companies 2024

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement
ResultsExecutive Teams Latin America Executive Team

Latin America’s Top Executives Reveal Their Inflation Strategies


For members of II’s Latin America Executive Team, there are big challenges ahead — but also big opportunities.

View the full results:

Latin America’s top chief executives have prepared for inflation.

Members of Institutional Investor’s Latin America Executive Team — representing industry sectors including food and beverages, healthcare, and banking — said that rising costs are a key threat to their business. At Coca Cola FEMSA in Mexico, John Santa Maria Otazua, the top-rated chief executive in the food and beverage sector as voted for by the sell side, said the company is combatting inflation by improving the affordability of its products and investing more than $500 million in its capacity for recycling bottles. Coca Cola FEMSA has introduced a universal bottle, enabling the company to use the same refillable bottle across territories for Coca-Cola, flavored sparkling beverages, and even non-carbonated beverages.

Coca Cola FEMSA is also using big data to be more strategic about discounts and promotions to protect its profitability. Crucially, hedging strategies have helped Coca Cola FEMSA mitigate price increases for raw materials. “Our resilient profile coupled with the tremendous efforts from our procurement team to ensure raw material sourcing has allowed us to continue operating without any disruptions, also ensuring our business continuity going forward,” Santa Maria Otazua said.

Gilberto Tomazoni, chief executive of the world’s largest meat company, said that he and his team at JBS focus on the aspects they can control: increasing productivity, improving efficiencies, and ramping up innovation. Tomazoni was voted as the top ranking food and beverage chief executive by buy- and sell-side participants in the II survey. He said that in the last two years, JBS has accelerated its direct-to-consumer sales with an e-commerce platform selling ready meals and various types of protein online. “We want to be increasingly closer to our consumers,” Tomazoni said.

In the banking sector, inflation looks a little different. Milton Maluhy Filho, chief executive of Itaú Unibanco, the largest banking institution in Brazil and therefore in Latin America, said that inflation can affect the creditworthiness of clients, requiring special monitoring from banks. Itaú Unibanco uses data to respond to changing markets and the state of its customers’ finances. Investments in technology have helped the bank keep its cost expansion below the rate of inflation over the last ten years. “Currently, we have the lowest cost-to-income ratio in our history and the best one among our peers,” says Maluhy Filho, who was ranked first by buy- and sell-side voters in the banking sector. 

In the healthcare sector, Paulo Moll was voted second in the combined rankings and ranked first by sell-side participants. He heads up the biggest hospital chain in Brazil, Rede D’Or Sao Luiz, where the size of the company has helped it reduce the impact of inflation by switching to new suppliers and squeezing margins. “The main impact from geopolitical tensions for our sector in Brazil seems to be related to the production cost accelerating for many of our suppliers,” Moll said. “Yet, geopolitical tensions have fortunately not affected an important trend in one of the main economic indicators that could boost private healthcare in our country, which is the unemployment rate.” Brazil’s unemployment rate is now at its lowest in over six years. 

Inflation has also come with unexpected benefits to the Brazilian economy. Maluhy Filho from Itaú Unibanco said that although investors’ risk appetite is lower, economic activity is stronger in commodity-exporting countries, such as Brazil, which has created opportunities for the agribusiness sector, among others. “The Brazilian economy is, therefore, expanding at a faster pace than we initially predicted,” he said.

Milton Maluhy Filho, Intau Unibanco

What is the greatest challenge for your sector this year?

The macroeconomic environment, both local and global, with higher interest rates and widespread inflation, is one of the biggest challenges that the financial sector is facing this year. In this scenario, having the ability to grow whilst maintaining good credit quality will be key to differentiating us from the competition. Improving client satisfaction, adding value to our financial product offerings, and generating more engagement from our customer base in an ever-changing competitive landscape are other key challenges. We aim to achieve this by undergoing a profound cultural and technological transformation — this is where I spend most of my time. We still have a long way to go on these fronts, but I am excited and energized with the results that we have achieved so far.

Lastly, making sure we run our firm as efficiently as possible, from a costs point of view, will also be fundamental to delivering high-quality products and services to our clients at the right price. This task has gotten increasingly challenging with the current inflationary macro environment. 

How are you preparing for inflation?

Inflation obviously impacts our cost base. Additionally, it may also affect our clients’ creditworthiness by adversely impacting their disposable income.

We are constantly monitoring our credit systems, leveraging our extensive experience and data, making sure we can react promptly and diligently to any changes in market conditions, as well as to our clients’ financial conditions. 

As for operational expenses, we have consistently invested in technology in order to make the bank more agile and efficient. As a result, we have been able to keep cost expansion below inflation over the past 10 years and still invest more in new business initiatives. Currently, we have the lowest cost-to-income ratio in our history and the best one among our peers. 

How are geopolitical tensions affecting your business?

One of the immediate impacts of the war in Ukraine was a spike in commodity prices, which translated into higher inflation around the world. In this macroeconomic scenario, investors’ risk appetite is lower. On the other hand, economic activity is stronger in commodity-exporting countries, such as Brazil, which has created opportunities for the agribusiness sector, among others. The Brazilian economy is, therefore, expanding at a faster pace than we initially predicted.

How are you innovating?

Innovation is absolutely ingrained in Itau Unibanco’s DNA. Our century-old history is marked by several initiatives considered revolutionary at the time, such as the launch of the first Brazilian ATM and the first home-banking service via internet.  At present, the pace of transformation is much faster than at any other point in our history, and we believe we have the right elements to meet our clients’ needs and demands, both by leveraging internal talent, as well as accelerating our partnership and M&A agendas.

We are focused on customer-centricity, supported by both our digital and cultural transformations. We significantly increased the speed of change in both of those areas, with meaningful, positive impacts in our businesses. Innovation plays a central role in this transformation agenda, and therefore, it is not the responsibility of a single area or department, but rather is embedded throughout the entire firm.

We have just launched a new initiative to further evolve our corporate culture, which encourages this attitude and invites each of our employees to question the way we do things. We have also been listening carefully to our customers and incorporating their feedback into everything we do. This cultural shift is what makes us capable of creating new business opportunities and new sources of revenue.

What’s the greatest opportunity for your business in the near future?

We believe there is an enormous potential to revolutionize our product offering, not only in financial services, but beyond this, too. We currently cater for approximately 70 million clients. Our journey is focused on increasingly improving their experience by seamlessly combining physical and digital channels, with intensive use of data to meet the demands of each client. Our goal is to be seen as a platform of products and services that help our customers achieve their life goals and objectives.

Additionally, there is opportunity, and a responsibility, for us to scale the positive impacts of our ESG agenda. At the end of last year, Itaú joined the Net-Zero Banking Alliance, a global agreement led by the Organization of United Nations, through which we committed to reduce emissions by 50 percent by 2030 and become carbon neutral by 2050. Another tangible example of this prioritization is our funding target for positive impact sectors. Since 2019, we have allocated approximately BRL 220 billion to fund positive impact sectors and ESG initiatives, with the goal of more than doubling these resources by 2025, reaching BRL 400 billion invested.

Paulo Moll, Rede D’Or Sao Luiz

What is the greatest challenge for your sector this year?

In the beginning of the year, we saw a huge number of Covid cases in our emergency rooms — mostly related to the omicron variant spreading in Brazil. It is very challenging to organize the services in our 68 hospitals, to make sure we offer high quality medical assistance to all patients, including separate flows and areas dedicated to Covid cases, while continuing to treat other conditions, such as cancer surgeries and other elective and emergency procedures — and in the meantime keeping all of our staff and patients safe. Since the beginning of the pandemic we have treated more than 1.6 million Covid patients, of which 74,000 needed to be hospitalized in one of our units. We have proudly recorded one of the lowest fatality rates in the world.

How are you preparing for inflation?

We are very focused on bringing more efficiency to our operations to offset inflation impacts. Our selling, general, and administrative expenses should be further diluted as our company continues to grow, and we are currently helping to develop new suppliers and strengthening relationships with long-term partners who also benefit from our scale, to bring new solutions to our company and help reduce the inflation impact. We have been able to show improvements in every quarter. In addition, due to our size and scale, we are able to record and sustain margins materially above our sector’s average, which attenuates the challenge of dealing with these temporary pressures, such as the higher inflation.  

How are geopolitical tensions affecting your business?

The main impact from geopolitical tensions for our sector in Brazil seems to be related to the production cost accelerating for many of our suppliers. These tensions could also be pointed as one of the reasons, among many others, for our currency devaluation. Yet, geopolitical tensions have fortunately not affected an important trend in one of the main economic indicators that could boost private healthcare in our country, which is the unemployment rate, now at its lowest in over six years. 

How are you innovating?

Innovation is part of Rede D’Or culture and DNA, supporting us since the early days. We continue to lead our sector in Brazil by introducing and expanding new technologies, from our internally developed enterprise resource planning to the leading robotic program in Latin America. We also offer unique surgical technologies such as Cyberknife, the first and only equipment in the country, used for radio-neurosurgery and other high complexity interventions, as well as cutting-edge technologies such as Nanoknife, which has shown great results in pancreatic oncology surgeries.

Moreover, we have founded a leading medical research institute in Brazil (IDOR), with more than 100 PhDs working together to advance high impact biomedical research and find novel ways to improve the quality of our care. IDOR's versatility and engagement is manifested in its role in the Zika epidemics and, more recently, in the Covid-19 pandemic, spearheading a number of vaccine trials enrolling more than 7,000 patients.

Currently, 60 candidates are graduating at IDOR’s PhD program in biomedical science. We are also working in a broader education platform, hoping to offer a complete healthcare university, including medical, psychology and nursing schools. We have publicly announced an investment of 1 billion reais over the next 10 years on the research front, which includes unique international programs with top notch research centers to foster frontier areas such as mRNA vaccines, stem cell and organoid-based drug discovery, novel imaging modalities based on quantum biology, and CRISPR-based gene editing.

What’s the greatest opportunity for your business in the near future?

We have a huge opportunity in further advancing our market share by developing and delivering a substantial pipeline, which we have detailed in our public documents.

Rede D’Or is already a market leader with 11,000 beds, and working on another 6,000 beds through several organic projects. We’ll also continue to analyze M&A opportunities, as we see many hospitals facing financial difficulties and lacking competitiveness in a market under consolidation. On top of that we see opportunities in other businesses such as oncology, dialysis, diagnostics and education, as we should continue to invest in all of them and foster their growth.

John Santa Maria Otazua, Coca-Cola FEMSA

What is the greatest challenge for your sector this year?

Probably the biggest challenge for us has been balancing short-term initiatives to successfully navigate increased inflation and volatility, without losing focus and speed on the ambitious long-term transformation of our company. We embarked into a significant transformation at Coca-Cola FEMSA, from the traditional way of serving the trade into becoming an omnichannel multi-category platform able to fulfill orders any place, anytime. This is a huge disruption for our industry, and we are doing this by bolstering our strong customer relationships, our vision and our partnership with The Coca-Cola Company. Moreover, although we continue seeing solid volumes across our markets, we are closely monitoring consumer sentiment. Consumers across our markets are becoming more conscious of their overall spending as inflation accelerates. Therefore, our proven ability to provide affordability and value to consumers will continue to be key as we navigate the current inflationary environment.

How are you preparing for inflation?

We have focused our price architecture to provide affordability. To give you a sense, during the last two years, we have invested more than $500 million in returnable bottle capacity. These investments have allowed us to increase returnable capabilities including the coverage of our successful universal bottle, which enables us to use the same refillable bottle for brand Coca-Cola, flavored sparkling beverages, and even non-carbonated beverages across our territories. Additionally, we aim to continue focusing our execution on improving single-serve mix. We are also taking advantage of our big data analytics to take strategic decisions in a more granular way, not only related to price initiatives but also for discounts and promotions to protect our profitability across our markets. In terms of raw materials, our hedging strategies have significantly helped us mitigate the increase in the key raw materials we use. We have hedged our most important raw materials for the rest of 2022 and we are starting to do so for 2023. Overall, although it is certainly a very dynamic environment, we are confident that with our revenue growth management capabilities, combined with our hedging initiatives, we will be able to substantially mitigate pressures and significantly protect our profitability. 

How are geopolitical tensions affecting your business?

As has been the case for many other industries, the current geopolitical situation has challenged supply chains, affecting prices and availability of raw materials. However, our resilient profile coupled with the tremendous efforts from our procurement team to ensure raw material sourcing, has allowed us to continue operating without any disruptions, also ensuring our business continuity going forward.

How are you innovating?

On the omnichannel front, we continue the accelerated expansion of our B2B customer-centric omnichannel digital commercial platform. To give you a sense, we now have approximately 645,000 active monthly purchasers, up from 400,000 during the first quarter of the year. Digital purchases now represent over 7 percent of our total orders, generating close to US$450 million in sales during the first six months of 2022. Additionally, in the direct to home channel in Mexico, over the last 18 months we substantially increased the number of home delivery routes—from almost 800 routes to over 1,500 routes.

We are also investing to digitize our core and bring a tremendous amount of transformation to our supply chain. An example of these initiatives is dynamic routing, which provides us with the ability of flexible dispatching, and has two important effects: an increase in productivity and a reduction in our cost of delivery. Regarding portfolio, we are developing a winning consumer-centric portfolio that is allowing us to consolidate our industry leadership within the non-alcoholic ready-to-drink space. Underscored by the success of the new formula and visual identity of Coca-Cola Zero Sugar, our sparkling beverage category is posting solid volume and share growth, while our still beverage and personal water categories have achieved double-digit growth and share gains across most of our territories.

Finally, we are also working on expanding our portfolio into multi-category. We believe this will allow us to serve new consumption occasions and boost Coca-Cola FEMSA’s sales with combined execution to serve the traditional, on-premise and home delivery channels. We have recently signed distribution agreements in Brazil with companies such as Campari, Estrella Galicia, and Grupo Perfetti Van Melle. We will continue looking for opportunities in order to leverage our strong distribution network and improve our returns. Notably, we are running pilot tests with other companies and markets to assess and learn from new shopper and consumption occasions, and gather the necessary insights to strengthen our value proposition for retailers and consumers in the future. 

What’s the greatest opportunity for your business in the near future?

There are significant opportunities for us to continue building a consumer-centric multi-category portfolio. An example is the opportunity to aggressively develop alcoholic ready-to-drink beverages. For instance, The Coca-Cola Company recently announced plans to debut a Jack Daniel’s and Coca-Cola ready-to-drink cocktail, which will be launched in Mexico in late 2022.

Moreover, there are opportunities for us to close more multi-category partnerships, leveraging our omnichannel digital platform and developing the full capability of the digital and analytic base that we are building across our markets.  All this, as we continue placing sustainability at the center of everything we do, while fostering an agile, people-centric culture across all of our markets.  

Gilberto Tomazoni, JBS

What is the greatest challenge for your sector this year?

Humanity is currently facing two emergencies at the same time. We must tackle climate change and also increase global food production, in order to feed the world’s growing population. Those emergencies are not issues for the future. They aren’t mere challenges, but emergencies that are affecting humanity right now. Extreme climate events are already having an impact. Food insecurity is rising with nearly one third of the world’s population without access to adequate food. Here at JBS, as one of the global leaders in the food industry, we have the responsibility to be part of the solution and are working to achieve a more sustainable and inclusive food production system. Therefore, our greatest challenge is to expand food production in an increasingly sustainable manner. This is also central to our guiding purpose of feeding the world with the best there is. Inflation around the world is an additional challenge we face in the short term.

How are you preparing for inflation?

Inflation has a different impact depending on the products and the region, so our diversified multi-protein, multi-geography global platform protects the company against potential regional or seasonal fluctuations. In times like these, our strategy is to focus on the aspects that we can control. We have to be more productive, more efficient, and to ramp up innovation. 

How are geopolitical tensions affecting your business?

First of all, geopolitical tensions can lead to serious humanitarian crises, and our desire is for conflicts to end as soon as possible. These tensions can also disrupt the raw material supply chain, global logistics and market demand for certain products, which can cause global supply chain instability. From a JBS perspective, as we said before, we focus on what we can control and our global platform allows us to better navigate any challenges.

How are you innovating?

JBS is constantly innovating to meet global consumer demands. We do this seeking healthy, tasty, ready-to-eat and innovative products, with sustainability at their core. 

We innovate in our portfolio when we bring new proteins to our offering, for example, with our investment in Huon Aquaculture, in Australia, and our global plant-based platform, that includes the Incrivel brand, a market leader in Brazil.

We are innovating in sustainability with new technologies to reduce greenhouse gas emissions, such as feed additives we have been testing in our livestock operations in Brazil.

We are investing in science because we believe biotechnology can be a source of impactful solutions for the future of food. We are at the forefront of cultivated protein capability and other leading-edge technologies for the food industry, with a new JBS Biotech Innovation Center under construction in Brazil.

Our Global Innovation Team works to leverage JBS's competitive advantage and accelerate innovation through information sharing, multi-market exchange and the creation of global platforms that favor innovative practices. The Company has also invested in the JBS Global Food Innovation Center, a partnership with Colorado State University. Opened in 2019, the center is a teaching and research hub for cutting-edge global innovations in new product development, culinary research, food science, food safety, and animal welfare.

What’s the greatest opportunity for your business in the near future?

JBS has been successful in its strategy of diversifying geographically and by protein type. The company has also focused on high value-added products and building strong brands. We believe that these fundamentals are key to continuous and sustainable growth.

Acquisitions are an important element of this strategy. Last year alone, we invested in businesses that allowed us to increase our relevance in segments where we see high growth potential. With the acquisition of Huon, in Australia, we started our aquaculture production from a position of regional leadership and in bases that provide a strong global expansion opportunity. Last year, 2021, also marked our first foray into cultivated protein, acquiring control of BioTech Foods in Spain and investing in R&D in a biotechnology center in Brazil. 

We also want to be increasingly closer to our consumers. For the last two years, we have advanced our e-commerce offer through direct sales platforms or partners, making it possible to buy ready-to-eat meals and various types of protein online, all for prompt delivery. At the same time, we strengthened our relationship with retail and foodservice partners. 

Finally, sustainability is our business strategy and guides how we create value and future-proof our business while safeguarding the planet for future generations. For this reason, in 2021, we assumed what we consider to be JBS’s most important commitment: to be net zero by 2040.


“The opportunity for Japanʼs economy to break out of the protracted stagnation of the so-called ‘thirty lost years’ has finally arrived,” says Mitsubishi UFJ’s Hironori Kamezawa.
Amid a surge in trading, J.P. Morgan Chase took second place in the ranking, followed by Goldman Sachs in third.
The domestic firm is once again No. 1 for equity sales.
Gift this article