A story in collaboration with:

Vanessa Lean, Managing Director of the Cuestamoras Family Office, Costa Rica. Guillermo Salazar, Founder & Managing Partner, Exaudi Family Business Consulting

Costa Rica is known for its beautiful natural diversity, its active volcanos and, more recently, for its strong push towards renewable energy and sustainability. This small, dynamic Central American country is also home to an impressive array of entrepreneurs and family businesses.

The Cuestamoras Group is one of Costa Rica’s most prominent family businesses. Their story leaves no doubt as to why they made such a mark on the country’s history. Having been in business for more than a century, the Uribe family can count the founding and growing of one of Central America’s first supermarket chains, Mas por Menos, as one of their greatest achievements. Led by Enrique Uribe, his brother-in-law John Moretti and their friend Samuel Hidalgo, the supermarkets grew over many decades until the family, faced with international competition, decided to diversify into other activities. Now in its third and soon fourth generation, this family business boasts three different family branches descending from each one of the original founding partners, the Uribes, the Uribe-Morettis and the Hidalgos, all of whom are shareholders in what has evolved into the Cuestamoras Group, a multi-business conglomerate with activities in urban planning, hospitality, retail and renewable energy.

Though strong in numbers and affection in their family ties, for the first two generations, the Uribes adhered to the policy of keeping the family and the business separate. For a long time, most family members did not know much about the goings on in the business, and the third generation was taught not to think of the business as a provider for their future but rather as an inspiration to build their own careers. However, in 2009, the family decided that it was time to initiate the process of installing a family and corporate governance system. Today, the family has a fully-functional Family Office in place. It also runs various committees and Cousins Consortiums to tie in the next generation.

Tharawat Magazine met six family members who told four different stories about one family business.

PORTRAIT: The Cuestamoras Group – One Family Business in Four Stories
Image courtesy of Cuestamoras Group

Story One: From Mas por Menos to Cuestamoras

Rodrigo Uribe, President of Cuestamoras, Costa Rica

 

The Beginnings

In 1868, at the age of 13, my great-grandfather, Enrique Uribe, lost his parents and was sent from Spain to Costa Rica. Landed in this beautiful part of the world, he started to work and soon was able to open his own store. He married a girl from Spain and had several children, amongst them was my grandfather Luis. It is with Luis that this family business story really begins.

From the very beginning, the Uribes were invested in retail. There were stores on both my grandfather and my grandmother’s sides of the family. Eventually, my grandfather Luis went into business with his father-in-law, starting a successful general store that imported all sorts of products, mainly from Europe.

Luis eventually inherited the store and sold a variety of goods ranging from liquor to building materials. My father, Enrique, was the youngest and rarely agreed with his father and his elder brother who naturally was considered the successor to the business. Running out of patience, my father announced one day that he was going out on his own. “I just need someone to finance me,” he said boldly. My grandfather, to his credit, gave him a little money but made it very clear that this would come out of his inheritance. My father was so eager to get started that he didn’t care what the conditions were. He went after his dream: to open his own supermarket chain, like the ones he had seen in the US, right here in Costa Rica. At the time, this didn’t exist here as everything was unpacked and sold over the counter.

My father found an old garage in a busy part of town and without knowing much about it began a small supermarket. He later discovered that my grandfather had helped him out behind the scenes by getting him credit approvals from suppliers. My father was unstoppable. From the very beginning, he thought of setting up, not just one store, but a whole chain of supermarkets. This is how “Mas por Menos” (More for Less), one of the most important supermarket chains in Central America, was born. My father soon was joined by his brother-in-law, John Moretti, and his father’s finance person, Samuel Hidalgo. These men were there from the beginning, which is why today we have three main family branches, the Uribes, the Morettis and the Hidalgos.

My father was a great leader and, in spite of nationalised banks and scarce financing sources, the supermarkets prospered. Forced to running the business with no bank financing, we were able to prosper and grow by keeping very tight controls. We gained a reputation for being resilient in tough times and expanded from regular supermarkets into discount stores and hypermarkets. We also went deep into the perishables supply chain to buy directly from farmers and set up integrated poultry and egg production. Likewise, meat processing and centralised packing was part of our value chain. Even when we created the United Corporation of Supermarkets, a holding company for three separate store formats, we remained low profile as a business family.

We grew to a point where we realised that we were too small to face international rivals and too big to compete as a niche player. With this in mind, we partnered with Royal Ahold first, then with Walmart who was interested in coming to the region. We could have fought them, but we realised it would have been an expensive fight. In time, we decided to trade in our ownership of Central America to create a single company with Walmart in Mexico. This gave us shares in Walmart of Mexico which are traded publicly in the Mexican stock exchange. Starting in 2005, we gradually sold shares through the market and most of our net worth became financial assets handled by different banks. And that is how we exited the supermarket business and began our path towards becoming the company we are today.

The birth of Cuestamoras

In 2008, encouraged by past success, we agreed to stay together for the next 100 years, a transcendental decision for both the family and the business. We then proceeded to signed a new shareholder agreement that marked the beginning of the company that you see today.

At first, we experimented with different business models, trying out real estate and private equity where we invested in some smaller companies. We soon realised that operating businesses is in our DNA, not as passive investors. We spent a lot of time on the new strategy and planning how to become a multi-business operator under a lean corporate office

This is how Cuestamoras was born, and we are now already active in three key areas. First is sustainable urban planning. The second is health and wellness space, beginning with pharmacies and pharmaceutical distribution. Third area is energy, trading energy contracts and renewable energy generation. We already had some investments in wind farms, and have now invested in a hydro-electric plant with a European partner. We are expanding across Central America and starting to look at Mexico, which is the next big market in energy. Finally, we have some hotels in our legacy portfolio and some land dedicated to conservation (50% is tropical forest).

PORTRAIT: The Cuestamoras Group – One Family Business in Four Stories
Image courtesy of Cuestamoras Group

Structuring the family business

It all sounds smooth, but of course, it wasn’t. We have faced more than our share of typical family business issues. My father was the typical patriarch. When he died suddenly at the age of 64, we were left in great shock and rather rudderless. I was already taking over, but the loss was enormous for the whole company. My father had a very particular way of doing things; he had a lot of personality, a powerful will and a great ability to go into very small details. He would not tolerate dishonesty or negligence. We didn’t close the supermarkets on the day he died. He wouldn’t have liked us to.

My brother Carlos and I have different personalities. I inherited a role closer to my father’s, pushing the business forward. My brother is more conservative, so together we balance things out.

Starting the governance process was important. Although there is a charm to making decisions without taking everybody’s opinions into account, we knew that it wasn’t a sustainable solution. In the past decisions were made by the heads of the three families in a closed room who then went back to their own branch to communicate the conclusions. So when we decided to implement more structure, we knew we had to change the way we handled things with the family first.

We started sharing more information with the family and began holding periodic meetings for all shareholders. Typically, when you make a business decision, you just execute it. With a family business, it is more sensitive. You can’t just command how people feel. You have to convince, inspire and motivate.

You might be successful in the business side of things, but in the long run, if the family values aren’t clear, your ruin your chances of creating something sustainable. If you put in the time and the goodwill, the family will help the business and the business will thrive in the long run.

I knew that once we opened the floodgates and shared information, there would be no stopping this. The process has been rewarding but also incredibly time consuming. We have to be clear about the right time and place to discuss things and make sure that the right channels are used for the right topics.

We have borrowed a lot of the structures from public companies. We have a Family Office that regulates all questions for the family and a separate Investment Relations Office for shareholder questions.

The Future

My future concerns centre around the family and their wellbeing. Having all these structures in place will safeguard us from making the usual family business mistakes. Hopefully, we can keep the family united under the common goal of keeping the company going. We want to see the next generation flourish in their own businesses. We want successful shareholders because they reinforce the business and ease the pressure of it being the sole income for anyone. In the short-term, it’s great to have money helping the family. However, in the long-term, it’s the family’s healthy outlook that keeps the business alive. 

PORTRAIT: The Cuestamoras Group – One Family Business in Four Stories
Image courtesy of Cuestamoras Group

Story Two: The Cousins’ Consortium

Interview with Antonio Barnabó, President of The Cousins’ Consortium, Cuestamoras, Costa Rica

Antonio Barnabó was born to entrepreneurial parents, but he is also part of the third generation of the Cuestamoras legacy. His mother‘s brothers, Rodrigo and Carlos, are still leading the Cuestamoras Group. With the recent transformation of the company and the instalment of the Family Office, Antonio and his cousins have come together in the Cousins’ Consortium, a committee created to regulate the education and contribution of the third generation to the business and ensure the family’s wellbeing. Antonio is also part of the founding team of the successful Italian Gelateria that was created with his sister, brother-in-law and mother. He tells us more about juggling the role of President of the Cousins’ Consortium and making his own way as an entrepreneur.

How long have you been involved in your family business and what role do you play?

I am currently President of the Cousins’ Consortium of Cuestamoras and the third generation of our family involved in the company. This generation only got involved recently; in 2009, we started working on family governance and institutions. Before then, the younger generation was very proud of the business but saw it as something abstract; we were absolutely not involved. We didn’t even speak about it; to us, the second generation was almost like a secret society! Now, we are learning how to run the business and, when the time comes, how to be good shareholders.

The consortium is fifteen cousins who are all very committed to the family enterprise. Working together was not easy at first. Fortunately, one of our core family values has always been respect, so we are very open with each other and have learned how to manage our little conflicts. Now with the fourth generation being born, it’s a good time for us to address our vision and to create a legacy for the next century.

What were your initial tasks in the Cousins’ Consortium?

We began by establishing a family protocol which was the first explicit document that detailed the relationship between the family and the business; we discussed this with the whole family and made sure it was something everyone agreed on. Then we started to set up reunions, courses and different committees: the philanthropy committee, the education committee and the family committee. We focus on building skills like public speaking, financial planning and event organisation. Not everyone will play an operational role but we will all be shareholders at some point and we take that very seriously.

Do the other two branches of the family have Cousins’ Consortiums?

We have a multi-branch Cousins’ Consortium where the third generation members of all branches work together. We’re working towards implementing the same systems and institutions across all the branches as this will make things much more efficient.

You also started your own family business with your mother, sister and brother-in-law a few years ago. How do you reconcile your many roles?

Well, it’s a big time commitment, but my mother has always been adamant about us never relying on the Cousins’ Consortium for our careers or livelihoods. She is a real entrepreneur herself so going into business together was just a matter of time.

My sister came up with the idea of setting up the first, authentically Italian Gelateria in Costa Rica “Gelateria Da Noi”. We started out with one small store in 2009, and now we have seven locations. My brother-in-law and sister are chefs; they make the gelato and pastries. My mother is the driving spirit and takes care of the shop decor and expansion plans. I take care of the finances and I’m also on the Board of Directors.

PORTRAIT: The Cuestamoras Group – One Family Business in Four Stories
Image courtesy of Cuestamoras Group

Sounds like a very busy schedule…

Yes, it’s a young company and naturally takes up much of our time. Being the President of the Cousins’ Consortium also takes a lot of time; the President interacts with the Board of Directors and carries their news and feedback back to the Consortiums. I am also an intermediary for the third and second generations. Each family branch has its own vote on the Board of Directors, and each branch is responsible for its own consensus. We meet whenever we need to organise events or training. Reunions are also mandatory; reunions are how we promote cohesion and keep everyone aligned. We also keep in touch via WhatsApp.

How did the family react to all these rules being put into place?

When we first started assigning roles and committees, we quickly realised that not everyone wanted to be part of it in an active way. Putting people into committees without consulting them first doesn’t really work! It all fell into place when a few people took on leadership roles in the committees; everyone else contributes as often as they want to.

How did the second generation react to all these changes?

At first, the second-generation members would tell us what to do, and we would do it. Then we started to become more proactive and come up with our own plans, so they had to be flexible enough to adopt new ideas and structures. They began to understand that cousins do not relate to each other in the same way as siblings; we have a different relationship and require different communication than they did as brothers and sisters.

With all these changes in place, have you started talking about the family business more?

There is definitely a new openness about the topic; that need for tight control over information has relaxed a little. My mother and I talk about it much more, but that’s also because we have our Gelateria business together.

What is your wish for the future of your family business, Cuestamoras?

I think we’re growing, making improvements and learning a lot. Our main objective is to have a great relationship between the generations. I would also love to see all my cousins doing things that they are passionate about. Many of them, like me, have great businesses that they built themselves; some are in the arts, some in fashion, others are committed to the environment. It would be wonderful to see everyone pursuing their own passions, fulfilled with their own businesses and financially independent of the family business. That would be the ideal – individual fulfilment while maintaining the family legacy.