Brioche Pasquier S.A.

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Brioche Pasquier S.A.

B.P. 2
49360 Les Cerqueux
France
Telephone: (33) 2-41-29-54-00
Fax: (33) 2-41-29-54-02

Public Company
Incorporated: 1974
Employees: 2,444
Sales: EUR 478.8 million ($501.8 million)(2002)
Stock Exchanges: Euronext Paris
Ticker Symbol: 6627
NAIC: 311812 Commercial Bakeries

France’s Brioche Pasquier S.A. has parlayed a nearly century-old recipe into a growing European baked goods empire. The company controls 40 percent of the French market for industrial pastry breads, called “Viennoiseries,” or “Vienna breads.” The company’s core products remain its namesake brioche (a sweetened, light bread), fresh buns, and its “Pitch” brand snacks. Brioche Pasquier distributes its products, which emphasize their freshness, primarily through supermarket and hypermarket channels. The company also produces frozen pastries, breads, and pies for the restaurant and related sectors. As part of its emphasis on freshness, the company has adopted a decentralized, autonomously operating production policy, building new production facilities for specific geographic markets in order to enable daily delivery of fresh baked goods. Since the late 1990s, Brioche Pasquier has begun exporting its products and production model to other European markets. The company is now present in Belgium, Spain, the United Kingdom, Germany, and Italy. Foreign sales accounted for 11 percent of the company’s total sales of EUR 479 million in 2002. In support of its international expansion, Brioche Pasquier has made a number of key acquisitions in the early years of the 21st century, including Spain’s Recondo and Italy’s Bresciadolci and Les Brioches. Quoted on the Euronext Paris Stock Exchange, the company remains controlled by the founding Pasquier family, led by brothers Serge and Louis-Marie Pasquier.

Industrialized Recipe in the 1970s

Serge and Louis-Marie Pasquier’s grandfather had operated a bakery in the village (population: 600) of Cerqueux, near Cholet in France’s Vendée region. The elder Pasquier earned a reputation for the quality of his baked goods, particularly his brioche, a regional specialty, before passing along the family bakery to his son. When the second Pasquier died in 1972, the bakery was taken over by his sons, including Serge and Louis-Marie and their three brothers.

Serge and Louis-Marie, then in their early 20s, became the driving force behind the company’s destiny. The brothers recognized the strong potential for their grandfather’s brioche recipe, particularly during a period when French dietary and shopping habits were undergoing a rapid change. The introduction of supermarkets, and later hypermarkets, since the 1950s and 1960s had created a demand for new products, especially prepackaged products.

The brothers formed a natural team, with Serge handling the administrative end, while Louis-Marie worked on sales and distribution, and in the early 1970s the Pasquiers began selling their brioche to local supermarkets. Recognizing the new sales potential of the supermarket shelf, Louis-Marie soon developed a distinctive packaging for the brioche. Featuring a clear, simple design, the Brioche Pasquier package also featured a list of the product’s ingredients—a rarity at the time—that emphasized its all-natural recipe.

As Serge Pasquier told Capital: “We didn’t have a business plan! Our main asset was the product, a craftsman’s recipe, with no preservatives or coloring agents. We were pioneers in detailing the ingredients on the package.” That package helped stimulate demand for the Brioche Pasquier, as it came to be called, and encouraged the company to begin seeking to industrialize their production. In 1974, the family incorporated the company as Brioche Pasquier.

By 1976, the family-owned bakery was no longer large enough to meet the demand of the region’s supermarkets for its brioche. In that year, Brioche Pasquier began construction of their first factory, in Cerqueux. The opening of that 1,000-square-meter facility, in 1977, enabled the company to adopt a new policy—that of delivering their products six days a week in order to guarantee their freshness when they arrived on supermarket shelves.

By the mid-1980s, Pasquier’s reputation had begun to extend beyond its home region, as brioche, once simply a regional specialty, began its transformation into one of France’s favorite after-school snacks. The company prepared for its national expansion by going public, listing its stock on the secondary market of the Nantes Stock Exchange (later merged into the main Paris Stock Exchange) in 1985. The Pasquier family retained 58 percent of the company, while employees—who had been granted shares in the company as early as 1975—held 10 percent. By the end of that year, the company’s sales reached FFr135 million (approximately $20 million).

National Expansion in the 1980s

The year 1986 was something of a turning point for the company. In that year, Brioche Pasquier became the first food company in France to add the date of production to the packaging of its products, another guarantee of their freshness. That drive for product freshness led Brioche Pasquier to the construction of their second production plant in 1986, this time in Charencieu, near Lyon, which began supplying the Alps region.

In addition to the company’s drive for proximity, the new facility represented Brioche Pasquier’s commitment to a decentralized operation. The new factory, Brioche Pasquier Alpes, like the 11 others that were to follow, was granted a high degree of autonomy in order to respond to the demand of its local market. Toward this end, facilities were equipped with their own research and development laboratories in order to develop and test new recipes.

The year 1986 held another, perhaps more significant moment for Brioche Pasquier, which until then had remained a single-product company. In a country where a large majority of children snacked on brioche covered with chocolate spread, Pasquier recognized the need for a new type of pre-packaged snack. The result, a rolled, chocolate-filled pastry called Pitch, later became the company’s hottest seller.

Pasquier continued its national expansion at the end of the 1980s. In 1989, the company added to its network of production plants with the purchase of Etablissements Barnasson, located in Etoile sur Rhône in the south of France. That company, which produced croissants, as well as prepackaged chocolate breads (pain au chocolat), converted its production to Brioche Pasquier products and changed its name to Brioche Pasquier Sud in 1990.

Also in 1989, Pasquier added new food technology capacity with the purchase of Badial, which operated the Laboratoires Viguerie and specialized in developing recipes for new food and dietary products. Badial and Viguerie were then merged into a single company, Brioche Pasquier Nutrition, in 1991. By then, the company had expanded into a new market, frozen pastries destined for the restaurant industry, with the launch of subsidiary Surgélé Pasquier. That entry was supported by the construction of a new 1,800-square-meter production facility.

In the meantime, the company had also begun its entry into the fresh pastry market by acquiring a stake in Leve in 1989. In 1991, Brioche Pasquier gained control of more than 97 percent of Leve. The following year, the company built a new production plant in Cequeux under newly formed subsidiary Pâtisserie Pasquier Quest, which specialized in fresh pastry production. Also in that year, the company acquired Vergers de Moismont, a specialist in frozen pies. Brioche Pasquier then regrouped its frozen pastry operations into a dedicated division.

Pasquier entered the Parisian market in 1993, constructing a factory in Le Chaatelet en Brie to support the launch of new subsidiary Brioche Pasquier Paris. At the same time, the company continued to expand both its fresh and frozen pastry divisions. Pasquier acquired Michel Delage Pâtisseries Surgelées, which specialized in the French pastry favorite “pate a choux” (a type of cream puff). That company was then renamed Påtisserie Pasquier Centre. The following year, the company added Beignets Heunets, located in the north of France, which focused on frozen filled doughnuts.

International Expansion in the New Century

By the mid-1990s, Brioche Pasquier had captured 40 percent of the French market for pre-packaged pastries, bringing its total revenues to more than FFrl.35 billion ($225 million) by 1996. The rising demand for the company’s products, coupled with its commitment to daily deliveries, had also led it to take the unusual step of reducing its employees hours—years ahead of the 35-hour workweek instituted by the French government at the turn of the 21st century. Pasquier employees now worked on a 33-hour per week schedule. In exchange, Pasquier gained greater flexibility, especially in its ability to operate six days per week in order to supply its hypermarket and supermarket customers with fresh product on the crucial Saturday shopping day.

With its position in France assured, in 1997 Brioche Pasquier began pursuing a plan of international expansion, although with only limited success. The company was forced to abandon its entry into Spain after just six months, and its attempts to enter the nearby Belgian, German, and Italian markets remained tentative. In 2001, only 2 percent of the group’s total sales came from exports.

Key Dates

1974:: Brioche Pasquier is established to sell brioche based on a family recipe.
1976:: The company builds its first industrial production facility.
1985:: Brioche Pasquier goes public with a listing on the secondary market of the Nantes Stock Exchange.
1990:: The company launches its first frozen foods operations.
1992:: Brioche Pasquier establishes a frozen foods division.
1999:: The company builds a production facility in Aubigny in order to enter the British market.

By then, the company had already recovered from an entirely different attempt at expansion. In 1997, the company had acquired smoked salmon specialist Sopal-Narvik. The purchase of the French smoked salmon leader left many observers perplexed, although the addition of Narvik provided Pasquier with much-needed expertise in export sales. Pasquier also hoped to develop the Narvik purchase into a diversification into the wider prepared foods category and began to invest in converting its production to include surimi and tarama products as well. Under Pasquier, Narvik’s sales grew by more than 50 percent, reaching FFr420 million (not consolidated with Pasquier’s own sales) by 2000. Nonetheless, in 2001, Pasquier chose to abandon its diversificaiton effort, selling Narvik to salmon specialist Armoric.

Instead, Pasquier returned to focusing on its European expansion in the new century. In 1999, the company built a new production facility, in Aubigny en Artois, creating Brioche Pasquier Nord. The 8,000-square-meter facility not only added coverage to France’s northern region but also increased the company’s ability to supply neighboring European markets. With the completion of the British Channel tunnel, the Aubigny factory positioned Pasquier to enter the United Kingdom as well.

Paquier stepped up its quest for European growth in 2000, targeting Spain, Portugal, England, and Italy for expansion. Acquisitions now formed the primary thrust of the company’s foreign expansion. In this way, the company hoped to gain not only a local presence, but insight into local consumer preferences, in order to tailor the company’s product offering to the new market. The company’s acquisition drive began with the purchase of a 51 percent stake in Spain’s Productos Recondo. Similar to, although smaller than, Brioche Pasquier, Recondo offered Pasquier its already established distribution network, as well as its own successful line of Spanish pastries.

In May 2001, Pasquier returned to France, acquiring COFREP, based in Brittany, which specialized in frozen cakes and pastries for the restaurant circuit. The COFREP acquisition not only filled out Pasquier’s frozen foods line, but also helped the company to focus that division on building up its export markets.

Italy became Pasquier’s next target market with the July 2001 purchases of that country’s Les Brioches SRL and Bresciadolci SpA, both previously owned by the same family. Those purchases gave Pasquier production facilities and distribution networks in Italy, as well as new puff pastry specialties that the company hoped to introduce to the French market.

Fire destroyed the company’s Paris facility in 2001, forcing the company to invest some EUR 62 million to rebuild the plant. The company also prepared to open a new production site in Metz, near the German border, in a move to step up its position in that country.

In 2003, Pasquier appeared well on the way to achieving its international ambitions. Its moves into Spain and Italy had been particularly successful, and the company’s international sales grew by some 55 percent in just one year. By the end of 2002, international sales accounted for 11 percent of the company’s total revenues, which topped EUR 478 million that year.

In 2003, Pasquier began adding to its international production capacity, adding new production lines in both its Spanish and Italian subsidiaries. The new lines were expected to be completed in 2004. With its commitment to freshness and quality ingredients, Brioche Pasquier hoped to duplicate its success beyond France.

Principal Subsidiaries

Brioche Pasquier Alpes; Brioche Pasquier Paris; Brioche Pasquier Sud; Brioche Pasquier Nord; Brioche Pasquier Espagne; Brioche Pasquier Italia; Brioche Pasquier Belgique; Brioche Pasquier U.K.; Brioche Pasquier Deutschland; Pâtisserie Pasquier Quest; Pâtisserie Pasquier Nord; Pâtisserie Pasquier Sud; Pâtisserie Pasquier Val du loir; Moismont Pâtisserie; Pasquier Nutrition.