Groupe Léa Nature

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Groupe Léa Nature

Avenue Paul-Langevin
Périgny, 17183
France
Telephone: (33 5 46) 34 30 00
Fax: (33 5 46) 34 32 34
Web site: http://www.lea-vital.com

Private Company
Incorporated: 1993 as Léa Vital
Employees: 382
Sales: EUR 74 million ($96.2 million) (2006)
NAIC: 325412 Pharmaceutical Preparation Manufacturing; 311422 Specialty Canning; 311423 Dried and Dehydrated Food Manufacturing; 311823 Pasta Manufacturing

Groupe Léa Nature is a leading French specialist in natural health, beauty, and food products. Based in Périgny, near the Atlantic port city of La Rochelle, Léa Nature has expanded rapidly to become the number two player in France’s health foods market, trailing only perennial leader Distriborg. Léa Nature produces and markets more than 800 products in three primary categories: Natural Beauty; Natural Health; and Natural Foods. The company’s Natural Beauty division includes the flagship brand Laboratoire Léa Nature, as well as the Natessance brand of natural and organic cosmetics and fragrances, including incense, candles, and potpourri under the Maison de Léa brand. The group’s Natural Health line is led by the Floressance line of therapeutic plants, natural food supplements, and vitamins, as well as the Vital line of sports nutrition and health foods. The company’s healthcare line also includes the Natessance, Natebio, and Biopur brands.

Since the late 1990s, Léa Nature has also invested strongly in developing its own lines of organic foods. The company’s food brands include Jardin Bio and Biosud food products; the Entouka line of children’s foods and snacks; Silhouette and Biosilhouette natural and organic diet products; Herborum organic dried fruits and herbs; and Jardin des Oceans salt and specialty products. The company also supplies organic food products to the catering and institutional food markets through its Bioviver subsidiary. In addition to developing its brand lines, Léa Nature has also established its own production operations, with facilities in Périgny, and in Fleurance, the Gers region, and Bazens, in the Lot-et-Garonne. These facilities enable Léa Nature to produce approximately 70 percent of its product lines in-house.

Founded in 1993, Léa Nature’s strategy of targeting both the specialist health and beauty market, as well as the large-scale distribution market, has enabled it to post growth rates of 25 percent per year and more. A privately held company, Léa Nature remains controlled by founder Charles Kloboukoff. In 2006, the company posted revenues of more than EUR 74 million ($96 million). The company hopes to claim the number one position in the French natural health and beauty market by 2010.

NATURAL PRODUCTS DESIGNER IN 1993

The French market for natural beauty and health products began to develop in the early 1990s. The growing body of evidence pointing to the dangers of the use of petrochemicals and other artificial additives in cosmetics, skin, and beauty care products encouraged consumers to seek out more natural products. Concurrent with this trend was the rising importance of new categories of health-oriented products, including plantand flower-based preparations, cures and infusions. This market was continually stimulated by new scientific evidence confirming the therapeutic value of a large variety of natural substances. While the organic foods market remained relatively small, the increasing consumer concerns over the safety of the food supply suggested the strong future potential for the sector.

This potential attracted the attention of Charles Kloboukoff. Having grown up in a family where traditional plant-based medicines and treatments existed side by side with modern medicines, Kloboukoff, who earned a business degree, had long been interested in the use of plants and herbs. Kloboukoff’s early career experience, however, was in France’s large-scale distribution sector. Kloboukoff joined the Intermarché group, one of the leading supermarket groups in the country, where he was responsible for developing and expanding the chain’s dietary products section as well as its pharmacy and ethnic foods departments. From there, Kloboukoff joined Monbanor in order to develop a new marketing campaign for that company’s Silhouette line of dietary products.

Armed with this experience, Kloboukoff decided to develop his interest in plant-based dietary supplements into a business on his own. In 1993, Kloboukoff created Léa Vital in Pantin, near Paris, backed by an investment of FRF 300,000 (EUR 45,000). Joined by his wife Catherine, who served as head of the company’s research and development department, the company began developing its own line of dietary complements based on plants and other natural ingredients, such as sea salts. Kloboukoff’s years of experience working within the supermarket sector formed a core ingredient of the company’s market plan. Instead of confining its distribution to the tiny market of specialty health foods stores, Kloboukoff aimed to introduce its products onto the shelves of the large-scale supermarket groups.

Léa Vital at first functioned as a design and development shop, developing its formulations and designing their packaging, which were then manufactured and distributed for the company by outside sources. In the meantime, Charles Kloboukoff served as the company’s main salesman, crisscrossing the country in order to persuade the major supermarket groups to stock its products. Kloboukoff became one of the first in the sector to market his products as part of a healthful lifestyle, a formula that succeeded in convincing the company’s first major clients, including sporting goods leader Decathlon and supermarkets giant Leclerc. Before long, Léa Vital’s client list included most of the large-scale distribution groups, including Kloboukoff’s former employer, Intermarché.

MOVING TO LA ROCHELLE IN 1996

Léa Vital launched a new brand, Floressance, incorporating a range of plant-based, health promoting products in 1994. The company at first concentrated on expanding the Floressance line, which launched a new range of herbal teas, “phyto-cocktails,” and capsules in 1995. That year also marked the group’s first venture into the organic foods market, with the creation of Le Jardin Biologique (“bio” is the French equivalent for “organic”). The brand included a range of herbs, spices, and other flavorings, such as bouillon cubes, as well as its own assortment of herbal teas. Inspired by Catherine Kloboukoff, the Jardin Biologique line found support from Charles Kloboukoff’s brother, an organic farmer, and their cousin, Ivan Kloboukoff, who became head of the company’s marketing effort.

COMPANY PERSPECTIVES

Léa Nature exclusively manufactures and distributes natural and organic products to promote health and well-being. The Group’s philosophy, “the spirit of nature,” is based on key values such as involvement, solidarity, respect for fellow man and nature, originality, reactivity, passion, independence, etc. … and on men and women sharing the same belief and the same desire to offer healthy, innovative and competitive natural products. The Léa Nature Group is thus a real human adventure where the initial quest is to promote the development, sharing approach and natural satisfaction of its clients and employees. We want to contribute, in our own way, to a greener and more environmentally friendly world in the long-term, helping to strike a fairer economical and social balance.

The company’s sales rose steadily, from the equivalent of EUR 230,000 in its first year to more than EUR 1 million in 1994. The launch of the Jardin Biologique line, which quickly built up a selection of 45 products, helped stimulate the company’s growth, more than doubling sales. The company had also increasingly built up its staff, including a dedicated sales team, and by the beginning of 1996 Léa Vital employed 22 people. The company also launched its first manufacturing operation at this time, setting up a small production workshop at its Paris headquarters.

The Kloboukoffs had never intended to remain in the Paris area, and in 1996 the company went in search of a new location along France’s Atlantic coast. Léa Vital’s choice fell on La Rochelle, a midsized city that had established a reputation as France’s “greenest” city. The company moved that year into new headquarters in Périgny, a village on the outskirts of La Rochelle, persuading seven of its 22 employees to make the move.

The Périgny site provided the basis for strong expansion by the company, as it extended its existing product lines. The company also entered a new market, cosmetics, in 1996, with the launch of the Léa Nature brand. The fast-growing perfume retailer Marionnaud, among others, soon picked up that line. With sales soaring past EUR 7 million by the end of that year, the company rapidly rebuilt its payroll to 35 employees.

The second half of the 1990s saw Léa Vital come into its own, as the market for dietary complements in general, and natural and organic products in particular, took off strongly in France. By 1997, the company’s Floressance line had claimed the leading position in the chain store market. By 1998, the company’s sales had doubled again, as the company claimed the number two position in the French natural products market. This growth brought recognition from Ernst & Young and Entreprise magazine, which placed the company at number 25 in its list of fastest-growing French independent companies.

Léa Vital continued to roll out new products—by 1999, the company boasted a range of more than 400 products, marketed under its Floressance, Le Jardin Bio, Léa Nature and Léa Phyto brands. This extension of the company’s product lines, backed by its strong market position, prepared it to profit from a new boom in the natural foods market at the dawn of the 21st century.

GROWTH IN THE NEW CENTURY

Increasing alarm over the disastrous situation of the food and agricultural sector—rocked by the crisis surrounding the outbreak of mad cow disease, the dioxin crisis in the pig market, the efforts to introduce genetically modified crops into Europe, and the discovery of pervasively high levels of groundwater contamination in France—had led to a new surge in demand for organic foods and dietary products. In order to take advantage of the fast-growing market, Léa Vital recognized the need to invest in its expansion. In 1999, the company decided to open its capital to outside investors.

The company turned to three institutional investors, Spef, part of the Banque Populaire, Ouest Croissance, and the Institut Régional pour le Développement Industriel (IRDI), selling a total of 8.5 percent interest in the company, and raising FRF 20 million (approximately $3.5 million). The investment enabled the company to build a new 4,500-square-meter headquarters and production facility in Périgny. The plant, built at a total cost of nearly EUR 7 million, was completed in September of that year. The increase in production space allowed the company to extend its product lines, and particularly its Jardin Bio brand, which launched a new range of savory foods. By then, Léa Vital’s employee ranks had increased to more than 200.

KEY DATES

1993:: Charles and Catherine Kloboukoff found Léa Vital in order to develop natural dietary supplements for large-scale retail distribution sector.
1996:: Léa Vital moves headquarters to Périgny; launches Léa Nature cosmetics brand.
1999:: Sells 8.5 percent stake to institutional investors in order to fund expansion.
2000:: Acquires Viver organic foods canning company, La Maison de Fleurance organic foods company, and Silhouette brand; launches Entouka organic children’s snack brand.
2006:: Expands Périgny production facility to more than 20,000 square meters; changes company name to Léa Nature.

The year 2000 marked a turning point for the company as Léa Vital completed its first acquisitions. The company first acquired La Maison de Fleurance, a group specialized in organic prepared foods, adding more than 120 new products to double the Jardin Bio line. The company next moved to expand its industrial capacity, buying organic fruits and vegetables canning company Viver, and its BioViver brand. Also in 2000, Léa Vital bought the Silhouette brand of dietary products. By the end of that year, the company had launched a new branded line of organic snack foods for children called Entouka.

TARGETING THE TOP FOR 2010

The continued growth in demand for natural and organic products encouraged Léa Vital to continue expanding its range of products and brands into the middle of the decade. In 2003, the company launched its Natessance line of organic cosmetics, joined the following year by the launch of the Natessance Baby line of organic infant care products. In that year, also, the company created a new brand, Jardin des Oceans, including sea salts and related products. The company also launched its own line of fair trade products, Jardin Bio Equitable. For this, the company established its own contracts directly with producers, introducing the first products in 2005. The company also launched its own line of home-care products, La Maison de Léa.

By mid-decade, the company’s total product range had topped 800 items. By then, some 70 percent of the group’s products were manufactured in house. In support of its manufacturing operations, the company expanded its main Périgny production facility, to 11,000 square meters in 2002, and again to more than 20,000 square meters in 2006. At the same time, the company expected its Viver manufacturing operation—struggling against losses since its takeover—to return to profitability by the end of the year.

By the second half of the decade, Charles Kloboukoff had established a clear objective for the company he had founded—claiming the number one share of the French organic foods and dietary supplements market by 2010. To this end, the company, already number two with a 9.5 percent market share, prepared to take on long-time leader Distriborg, which dominated the market with a 40 percent share.

As part of its new strategy, the company changed its name in 2006, becoming Léa Nature. At the same time, the company restructured its operations into two core divisions, Naturenvie, for the company’s organic foods brands; and Léa Vital, which included its health and beauty products. By the end of that year, the company’s sales topped EUR 74 million ($96 million). Léa Nature showed no signs of slowing down its product expansion. In 2007, the company rolled out a line of line of clothing and textiles based on organically grown cotton.