Lunch with the FT

August 1, 2014 12:32 pm

Lunch with the FT: Xavier López Ancona

Over empanadas and steak, the Mexican founder of KidZania theme parks talks about consumerism, fun and his country’s ‘terrible’ image abroad

There is more than a touch of Willy Wonka about Xavier López Ancona. Roald Dahl’s Wonka created an astonishing world of chocolate inside his factory, and the Mexican entrepreneur oozes the same excitement about KidZania, the amusement parks where children play at working in adult jobs. He founded the company 15 years ago and there are now 16 branches worldwide, with several more, including one in London, under construction.

We have arranged to meet, somewhat unimaginatively, at the restaurant below his office – but then the plan changes. López would like to take me on a tour of his newest KidZania park in Mexico City, and we’ll grab lunch afterwards.

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Lunch with the FT

I head to his headquarters in the Santa Fe business district on the western edge of the city, a neighbourhood of gleaming skyscrapers, commanding towering rents to match, built on what was once a rubbish dump. He is in a meeting when I arrive. I had been expecting him to exude a hip Google vibe to match his open-plan offices where employees work for fictional “ministries” in the service of a republic run by children (who make up 65 per cent of the 35m people who have so far visited KidZania theme parks) and everyone is on first-name terms. When the boss emerges, however, he is dressed formally in navy blazer and grey trousers.

López, 50, is chatty and friendly as we discuss whether to speak English or Spanish (we stick to Spanish). He prefers to drive himself around and, with mercifully little traffic, it takes less than half an hour down the motorway to reach the southern neighbourhood of Cuicuilco (pronounced “Kwi-Kwilco”), possibly the Valley of Mexico’s oldest settlement, where I am to see the shape of KidZania to come.

illustration of Xavier Lopez Ancona by James Ferguson©James Ferguson

This third and newest park in Mexico – one is in Santa Fe and the other in the northern city of Monterrey – is the biggest yet, a kind of “KidZania 2.0”, López says. The company’s European flagship park is taking shape (passers-by can already see a giant KidZania sign) at west London’s Westfield shopping centre. It opens next year, and other new projects include, he hopes, a US park by 2016.

At Cuicuilco, the Wonka-ness goes into overdrive: López beams as he inducts me into the KidZania concept – each park is a child-scale city. Visitors enter with pretend passports through an airport terminal, then spend the day role-playing at working, for which they earn the park’s local currency (which they can spend) while their parents trail along behind.

Instead of Wonka’s Oompa Loompas, there are fully grown staff speaking the KidZania lingo: “kai” for hello (this comes with a splayed finger-over-the-heart gesture that makes me think of Star Trek) and the message: “Have a productive day.” (The correct response, in case you’re wondering, is “ZanKs”, and goodbye is “Z-U”.)

López gallops along, as excited as a child showing off a new toy with loads of cool features. I must drive on the car track, he insists, presenting me with a personalised KidZania licence. “Oh! we must look in here,” he says, leaping to see how the park’s banknotes (called KidZos) are made. We zip around the “town” as he shows me how children can rent mobile phones, make tortillas, build a motorbike, recycle Tetra Pak packaging, make frozen yoghurt, open a bank account, film a television show, put on a play, be a firefighter, a judge or courier and much, much more.

On top of the current 16 locations in 13 countries – all except Cuicuilco (part of which is outside) are indoor attractions – 11 more KidZanias are under construction: as well as London, there are projects in cities including Delhi, Singapore, São Paulo and Doha. None is as big as Cuicuilco, which opened in May 2012; nor will they offer as many “edutainment” activities. Kid­Zania’s pitch is that children love role play, so it lets them play at doing the jobs adults do.

Kidzania in action


A promotional video for the company’s new London branch, opening in 2015

Everyone gets a KidZos cheque on arrival, which they have to cash, and they can earn more only by working at different jobs. They can spend their KidZos (on food, treats or entertainment such as go-karting) but if they run out, they need to do more work to earn more. They can open a bank account, deposit their cheque, be issued with a debit card and use cash machines. Just like grown-ups.

It is “performance with purpose”, says López after we leave KidZania and the buzz of children on school holidays, and cross the car park to a yellow-fronted Argentine restaurant called Piantao where, he assures me (deftly slipping in that he knows I am vegetarian) that the pasta is good.

It’s a slight relief, for someone as shopping centre-phobic as me, to be back out in daylight. López is keen to sit outside. We are ushered to a table on a patio with open sides and a glass roof. The other tables quickly fill up with shoppers, their children playing on a grassy bank in the patio area, and with workers from local offices.

How about pasties – empanadas – to start, he suggests, and a grilled cheese called provoleta to share? He orders a diet fizzy apple drink and I ask for mineral water.

López turned 50 in April – “I’m on the fifth floor now,” he jokes, and is very trim, having lost 11kg on a Kid­Zania employees’ challenge two years ago. After taking part in a marathon with his staff, he wants to do a triathlon next year and tells me he is about to run a half-marathon in San Francisco. He admits to being ambitious and driven. “I want to do it all,” he says. He was born in Mexico City in 1964 and his father worked at a variety of businesses, largely in the food industry, while his mother stayed at home with the seven children. López is not married and has no children himself but has 16 nephews and nieces.

When his pasty comes, he’s pleased to see that it is baked, not fried – “it’s healthier like that” – but still proceeds to cut off all the pastry and eat just the meat inside. “I’m very pernickety,” he smiles, “but only about food”. I am not so lucky – my spinach and cheese pasty is fried but I eat it anyway.

. . .

There’s a question I’ve been burning to ask ever since my son went to a birthday party at KidZania: don’t these theme parks just push consumerism? There are big brands and fast food everywhere, reinforcing corporate marketing messages. Almost all KidZanias are in malls and though they are designed to mimic a city, the “shopping centre” feel is everywhere.

There are few [Mexican] success stories for kids to think “I could be him”

López responds by stressing, first, that his parks are “more educational every day” and there are plenty of neutral activities – such as being a judge, doctor or policeman, attending the KidZania university, visiting the tax office or recycling plastic bottles – that are less brand-focused. Also, he says, kids are quietly learning about supply and demand: activities that are not so sought-after are also cheaper than being a firefighter or making pizza – and that has its appeal when the supply of KidZos is running low.

The company likes to say that its 800 global “industry partners” – these are the names visitors see inside KidZania, including Nestlé, American Airlines, Mitsubishi, Johnson & Johnson, Honda, Unilever and Nike – “authenticate the content”. In other words, the mini versions of stores, banks and offices with their familiar logos make the role-play real. López looks a bit puzzled by my question about consumerism. Without “industry partners”, he has no product, after all. And though he doesn’t say it, I am sure that he thinks the role play would be abstract – and boring for kids – without the real brands.

The role play is so real, in fact, that children can use earned KidZos to buy trinkets, or save them over several visits to buy a bigger item – such as a games console (or, more oddly, a food mixer) from the park’s department store. Indeed, López is far less concerned about brand bombardment than about stressing to me that there are no video games inside his parks: KidZania, he says, is about good old-fashioned play and learning.

He also flatly rejects any suggestion that the parks push fast food, even if the sports stadium is sponsored by Coca-Cola. Domino’s, where visitors make and eat their own pizza, is there “because the children love that – they make it and get to take away the finished product,” but he stresses that sushi and sandwiches are also on offer. The food issue is a bit of a raw nerve – the company is, in fact, phasing out one fast-food supplier. “We want parents to feel comfortable,” he says, before steering the conversation back to safer topics.

We have to go where the cities are, and 60 per cent of [world] population is in Asia

The main courses arrive. López has a flank steak, called vacío, and salad, and picks absent-mindedly at the chips that come with it. My fettuccine with pesto is tasty but unremarkable. López has been called the “Mexican Walt Disney” for the way he has carved out a new niche in the entertainment industry. While Disney theme parks offer children a few minutes of pure magic on a thrilling ride, there is also the prospect of hours of queueing and long walks from one attraction to another. López’s vision for KidZania is, rather, that visitors are “learning, being entertained, being engaged” at all times – and that’s important, since education is Mexico’s major problem, he says. “We are a good example of a Mexican company that can grow internationally. Mexico needs entrepreneurs. There are very few success stories for kids to think, ‘I could be him.’”

He says he never set out to be an entrepreneur. After studying for a year at a high school in Tulsa he went back to Mexico for a business administration degree and then took an MBA at the Kellogg School of Management at Northwestern University in Illinois.

“When I was doing my masters, everyone was talking about consulting,” López recalls. So he joined Booz Allen Hamilton in Mexico. “In consulting, everyone wanted to change to private equity. I got headhunted but I said no, I loved consulting.”

In 1996 he did move on, to General Electric, where he was vice-president of the equity capital group. And he loved that, too, although he noticed that in private equity, “everyone wanted to start their own business”. Again, he didn’t think too much about it until an old school friend approached him with an idea to launch nurseries focusing on role-play activities for children. He worked on the plan for months in his spare time before asking for a sabbatical from GE to see if the idea had legs. His boss chided him that he was “just playing at his little business” before giving him six months off: López never looked – or went – back.

The kindergarten idea morphed into KidZania and the first park opened in Santa Fe in 1999. López later bought out his school friend-turned-business partner, Luis Javier Laresgoiti. It is a not a subject he wants to dwell on.

López is a very wealthy man (it’s hard to tell exactly how wealthy, as KidZania does not make its revenue figures public). He owns the three Mexican KidZanias outright and franchises the rest. His only extravagance appears to be cruise holidays. He has driven me here in his Volkswagen car and, I note, he is wearing a plastic watch and a bracelet from a KidZania souvenir shop.

In the UK, his KidZania franchise partner is the entrepreneur Joel Cadbury (who is, perhaps appropriately, a member of the British chocolate dynasty). Company projections aim for 1m visitors at the London park each year, which will help KidZania towards a worldwide target of 10m visitors annually. The parks cost up to $35m to build and admission costs range from around $15 in Mumbai to nearly $50 in Tokyo.

In the US, López is planning a different approach and intends to team up with a US partner (he won’t name it) for a launch, probably in Chicago or Dallas. He is currently conducting due diligence and hopes to have a deal signed and sealed “well before the end of this year”.

When KidZania was proving itself a successful concept, he tested the waters in the US but bowed to the counsel of, among others, Howard Schultz of Starbucks, who told him he was not ready and should build successful franchises outside Mexico before targeting the US. “It was quite good advice,” he smiles. Starbucks much later became a company partner in Kuwait and Istanbul (although the Starbucks outlets in KidZania offer refreshments for weary accompanying adults, not activities for children).

. . .

Piantao
Av San Fernando 649, 14060 Mexico City

Meat empanada 59 pesos

Spinach and cheese

empanada 59 pesos

Provoleta 90 pesos

Vacío 245 pesos

Fettuccine 136 pesos

Mixed salad 112 pesos

Sparkling apple drink
38 pesos

Mineral water 35 pesos

Total (incl service)
890 pesos
(£39.85)

While Mexican companies had traditionally looked south to Central America or north to the US, KidZania became only the second Mexican group to invest in Japan, and the first in Indonesia and Kuwait. Parks have followed in places such as Seoul, Cairo and Istanbul – although Kid­Zania is not yet operating in China. That may well change: “We have to go where the cities are, and 60 per cent of the population is in Asia.”

López sees himself as a national trailblazer: “We need more Mexican brands,” he says. Aside from cement company Cemex, baking group Bimbo and beer brands such as Corona, Mexico has only a few companies that are international household names. This is a message he likes to stress whenever he is invited to conferences, and though he says he avoids dishing out criticism at such events, he says that Mexico also “needs a better image . . . outside Mexico, this country’s image is terrible”.

Indeed, just as we are finishing our meals, it belatedly occurs to him that we should have gone to a different restaurant, “somewhere more Mexican to promote Mexico. I just didn’t think.”

He recommends the “very good chocolate dessert” but skips it himself with a practised “Oh no, I’m on a diet.” I skip it too. After coffee (on the house) I pick up the bill. It’s hard for a Mexican man to accept being invited by a woman, and López has already said he wants to pay, but reluctantly accepts the FT’s rules.

We drive back to KidZania HQ, where he immediately dashes up the stairs to find someone going my way home who can give me a lift through the clogged rush-hour traffic. He says he goes to work happy, and it shows. “I love my job and my product,” he smiles. No wonder: he says he has margins of 20 to 30 per cent and sees returns in three to five years, above the industry average. “It’s a good business,” he says. “We’re doing good, and doing well.”

Jude Webber is the FT’s Mexico and Central America correspondent

Illustration by James Ferguson

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