Case Abstract

This case describes how Florida Ice & Farm (FIFCO), Costa Rica’s leading beverage company, develops and implements a triple bottom line strategy that addresses not only its financial returns but also its social and environmental performance. This initiative was adopted during the financial crisis, severely testing FIFCO’s commitment to sustainability.

The case opens in 2003 as a new CEO, Ramon Mendiola, initiates radical changes to bring FIFCO’s productivity into line with the world industry leaders. In the first phase (2004-2006), he focuses on operational excellence, increasing efficiency and improving financial returns. In the second phase, he challenges the company to double sales and earnings in two years, which is achieved through a combination of internal growth and new acquisitions in foods and beverages. Having achieved this goal, Ramón presents a new challenge to his executive team: the “triple bottom line” strategy. No sooner is the strategy launched than the company is hit by the world recession and the abrupt passing of a draconian traffic law.

The case describes the dilemma facing the CEO in early 2009, the decision to reaffirm the triple bottom line strategy, and the implementation of that strategy through a “sustainability balanced scorecard.” Of the 12 objectives set by the executive team in consultation with stakeholders, the case focuses on three: changing the culture of alcohol consumption in Costa Rica; becoming “water- neutral” in 2014; and promoting employees’ voluntary work through a menu of community service options. As a result of its accomplishments, FIFCO is identified by the World Economic Forum and the Boston Consulting Group as among the top 16 out of a thousand companies in emerging nations having innovative sustainable business practices, and is awarded the title of “sustainability champion.”

The issue facing Ramon Mendiola at the end of the case is what should be the next challenge for the company. He could continue to consolidate the triple bottom line within FIFCO, or he could spread the philosophy to his business partners. The case presents several alternatives. The company could work with long-time suppliers to reduce their environmental footprints or it could focus on distributors and retailers to promote recycling or volunteerism.

Case Abstract

Chipotle Mexican Grill, Inc. (CMG) was a Denver, Colorado-based chain that competed in the fast casual segment of the restaurant industry. The chain offered a range of Mexican food items in its 1,316 restaurants, which were predominantly in the United States. Founder and current co-CEO, Steve Ells had emphasized not only good tasting food but also a commitment to sustainability early on in the company’s history. The chain’s mission was “Food with Integrity,” which captured its commitment to both the environment and people. CMG positioned itself as a differentiator, using both food quality and a commitment to sustainability as factors that isolated the company from its competitors. However, in 2012 the company faced a number of challenges. A competitor from a different segment of the restaurant industry, Taco Bell, had launched a new line of menu items aimed directly at CMG. In addition, food costs were increasing and CMG was hard pressed to both control input costs and find suppliers who adhered to the company’s sustainability-based sourcing policy. In the most recent quarterly report, the company had indicated a slowing down of same-store sales. A hedge fund investor had recently called for shorting the company’s stock because of the impending problems. CMG’s two co-CEOs, Ells and Montgomery F. Moran, had to decide on the best course to confront these challenges in the backdrop of a free-fall in the company’s stock price.