Société Industrielle Lesaffre

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Société Industrielle Lesaffre

BP 3029
137 rue Gabriel Peri
Marcq-en-Barœul,
France
Telephone: (33 03 20) 81 61 00
Fax: (33 03 20) 98 60 91
Web site: http://www.lesaffre.fr

Private Company
Incorporated: 1853
Employees: 7,500
Sales: EUR 1.2 billion ($1.6 billion) (2005)
NAIC: 311423 Dried and Dehydrated Food Manufacturing

Société Industrielle Lesaffre is the world's leading producer of yeast, yeast extracts, enzymes, dough conditioners, and related ingredients and additives for the baking, wine, foodservice, animal feed, and other foods industries. The French company's liquid, dried, and compressed yeast products include nutritional yeast, brewer's yeast, vitamin-fortified nutritional yeast, and mineral-fortified yeast, marketed under the SAF Perfect Rise and Red Star yeast brands. Other Lesaffre products include yeast extracts and autolyzed yeast, used as flavor enhancers; milling correctors, sourdough starters, and bread improvers; malt and ethanol; and other specialty bioconverters, biocatalysts, flavorings, technologies, and services.

Lesaffre is an internationally operating company with 46 production centers operating in 24 countries, and sales to more than 180 countries. Approximately 80 percent of Lesaffre's sales, which top EUR 1.2 billion ($1.6 billion) per year, is generated outside of France. Founded in 1853, Lesaffre is based in Marcq-en-Barœul, near Lille. The company remains controlled by the founding Lesaffre family, represented by CEO Patrick Lesaffre.

ETHANOL ORIGINS IN 1853

In 1853, two cousins, Louis Lesaffre-Roussel and Louis Bonduelle Dalle, joined together to found a distillery producing ethanol from juniper berries and grain in Marquette-lez-Lille. The cousins, both born in 1802, came from well-established agricultural families based in France's North region, near Lille. Bonduelle, for example, had inherited the family farm growing grain and producing vegetable oils. The rapid expansion of the distillery business encouraged the cousins to expand the business, and in 1862 they purchased a second property, a farm in Renescure, which was converted into a dedicated grain alcohol distillery.

By then, Louis Pasteur had undertaken his ground-breaking research on yeast. Working in Lille, Pasteur proved, among other things, that yeast was responsible for the fermentation process, not a chemical reaction, and that fermentation occurred in the absence of oxygen. Pasteur's research not only helped describe the process by which grains and other plants were converted to alcohol, it also explained the effect of yeast on bread dough. Pasteur's research also helped identify the specific yeast, Saccharomyces cerevisiae, at the heart of the fermentation process.

The discovery of the action of yeast had dramatic effects not only the brewing and distillation industries, but on the baking industry as well. Prior to Pasteur's discovery, bakers had traditionally produced so-called sourdough breads. The rising agent for this type of bread consisted of a starter dough mix—containing yeast but also specific bacteria strains. The exposure of yeast to air, however, allowed the yeast to consume the alcohol produced through fermentation, resulting in the release of lactic acid, providing the distinctive taste of sourdough breads.

By the early 1870s, a method had been found to extract the Saccharomyces cerevisiae yeast as a byproduct of the distillation process. Baron Max von Springer, part of the Vienna-based Fould-Springer family, became the first in France to launch the industrial production of yeast. Springer began extracting yeast at his distillery in Maisons-Alfort, near Paris, in 1871 or 1872. By then, Louis Lesaffre, who died in 1869, had also led the company in developing a method for extracting fresh yeast. By 1873, the company founded its own plant for producing fresh yeast at a former grain mill in Marcqen-Barœul, outside of Lille.

The availability of fresh yeast, as opposed to sourdough starter, revolutionized the baking industry in France and soon throughout the world. The Lesaffre-Bonduelle company, which had continued to expand in other agricultural areas, remained a leading yeast producer through the end of the 19th century. By 1895, the company had launched its highly popular brand, l'Hirondelle, which grew into one of the world's best-selling and long-lasting yeast brands into the 21st century. The launch of l'Hirondelle provided strong support to the group's rapidly growing international sales, and by the dawn of the 20th century the company was supplying yeast to a number of markets, including Belgium, the United Kingdom, Italy, Switzerland, and Spain.

At the start of the 20th century, meanwhile, the Bonduelle-Lesaffre group counted seven production facilities, including the fast-growing yeast production plant. An important step in the future Lesaffre's development came in 1901, when the founding Bonduelle and Lesaffre families agreed to break up their industrial holdings. The Bonduelle family, which later emerged as France's leading frozen and canned vegetable producer, among other activities, took over the families' agricultural products operations, while the Lesaffre family chose to specialize in the production of yeast and related products for the baking, brewing, and other industries.

BUILDING A YEAST GIANT AFTER WORLD WAR II

In the first half of the 20th century, Lesaffre experienced a number of setbacks—as well as its own triumphs. The company's production facility was first destroyed by fire in 1910. Rebuilt soon after, the factory was pillaged at the outbreak of World War I. The Lesaffre family persevered, however, rebuilding the facility and expanding through the next decades, only to see its factories destroyed once again by Allied bombing raids in 1944.

COMPANY PERSPECTIVES

Originating from an agricultural background, since 1853 the Lesaffre family has built up a range of production activities aimed at the food industry. Over the generations, the company has gradually emerged as a major group specialized in the field of biotechnology. Ever keen to preserve its financial independence and profitability, Lesaffre aims to provide its customers with top quality products at best manufacturing costs, while at the same time respecting both human and environmental values. Lesaffre is today the world leader in the production of yeast and yeast extracts.

Yet Lesaffre remained a highly successful producer of yeast, as well as a major supplier of malt to the brewing industry. An important advance for the company came with the development of longer-lasting dry yeast in the 1930s. At the end of World War II, Lesaffre continued to invest strongly in its research and development efforts, enabling the company to remain at the cutting edge of the international yeast and bakery ingredients market. As a result, the company became a prime partner in the development of the industrial baking industry. The appearance of the first supermarkets, in the meantime, was driving demand for new types of packaged and fresh breads. Similarly, the development of processed and prepared foods, and the increasing industrialization of the food sector in general, provided new room for expansion for the Lesaffre group. During the 1950s, Lesaffre began developing a new range of yeast extracts, enzymes, and other additives for baked goods and other food markets.

Already a leader in France by the 1960s, Lesaffre took its first steps to expand its operations beyond exports. The company launched its first expansion into international operations, forming a partnership with Italian yeast producer STL in 1963. Back in France, the company grew in 1972 with the acquisition of Fould Springer (later renamed as BioSpringer). That company had continued its own expansion, adding dried yeast production in 1930, then diversifying into the production of yeast extracts in the late 1950s.

Lesaffre launched its entry into North America in 1976, introducing a new brand, SAF Instant Yeast for the U.S. and Canadian markets. The company initially supplied these markets with yeast exported from its main European facilities. In the early 1980s, the company decided to move closer to this fast-growing market. The company added its first North American factory in Mexico in 1981. The company then began scouting locations in the United States, and in 1982 opened its first plant there. The group's U.S. network ultimately included plants in Pennsylvania, Kentucky, California, and Montana. Coordinating these operations was the group's central U.S. headquarters, established in 1986.

WORLD YEAST LEADER IN THE NEW CENTURY

Lesaffre had also entered Asia, building a plant in India in 1983. By the end of that year, the company's total manufacturing base numbered nine plants. Lesaffre, however, had only just begun its international expansion drive. At the start of the 1990s, the company stepped up its effort to establish itself as a global yeast leader. Acquisitions formed an important part of the group's growth during the period. In 1986, for example, the company added to its U.S. presence through the purchase of Milwaukee's Froedtert Malt Corporation, founded some 120 years earlier. Into the early 1990s, the company added operations in Spain and Turkey, both in 1991, then bought Australia's Bakels Yeast in 1993.

Lesaffre's new markets included Austria, Switzerland, Argentina, and Hungary, all in 1994, and Russia in 1995. By the end of the decade, the company extended its reach to include the central European market, and into the next decade the company added plants in China and in the Middle East. Through its BioSpringer yeast extract subsidiary, created as an offshoot of Fould Springer in 1990, the company also added operations in Italy, through the 1998 purchase of a stake in Eridania Lievito. In 2000, that subsidiary acquired Prodesa, based in Brazil, as well. In 2003, Lesaffre decided to merge Fould Springer and BioSpringer again, renaming the combined operation as BioSpringer. In that year also the company created a new subsidiary, Fermentis, specialized in developing yeast products for the brewing and distilling industries. In another shift, Lesaffre merged its malting operations with those of Archer Daniels Midland, creating the International Malting Company joint venture in 1998.

Soon after, Lesaffre's U.S.-based yeast business cemented its leadership position in that market. In 2000 the company agreed to acquire Red Star Yeast & Products from Universal Foods Corporation, paying $125 million for the popular yeast brand. Lesaffre continued to seek new extensions to its North American holdings, and in 2003 the company bought Canada's Stranks Management, including its subsidiaries Breadwinner's Baking Goods Ltd. and Newport Industries Inc., and especially the Bakipan consumer yeast brand.

KEY DATES

1853:: Cousins Louis Lesaffre-Roussel and Louis Bonduelle Dalle found a distillery in Marquette-lez-Lille, France.
1862:: A second grain alcohol distillery is established in Renescure.
1872:: Company launches production of fresh yeast in Marcq-en-Barœul, outside of Lille.
1895:: The first commercial brand, l'Hirondelle, debuts.
1963:: Company's first international expansion into Italy.
1972:: French yeast producer Fould-Springer is acquired.
1976:: SAF Instant Yeast brand is introduced in the United States.
1982:: Company opens its first factory in United States.
1998:: The International Malt Company joint venture with Archer Daniels Midland is established.
2000:: Company acquires Red Star Yeast & Products from Universal Foods Corporation.

By 2005, Lesaffre had clearly established itself as the dominant yeast producer in the world. The company had also grown dramatically since the early 1980s, building up a global network of factories—including a new factory opened in Algeria in 2004—of nearly 50 plants. The group's strong growth in its yeast and yeast products operations led it to exit the International Malting Company joint venture, selling its stake to partner Archer Daniels Midland in October 2006. Lesaffre remained focused on developing its core yeast business into the new century.

M. L. Cohen

PRINCIPAL SUBSIDIARIES

Bakels Lesaffre Yeast Pty Ltd. (Australia); BioSpringer USA; Bonopan D.O.O. (Slovenia); Commercialisation D'arômes, D'enzymes Pour L'alimentation Animale; Compania Internacional De Productos Universales Alimenticios, Ltda–Unifco (Costa Rica); Fala GmbH (Germany); Fermentis; Lesaffre Bio-Corporation; Lesaffre Bio-Corporation Sp Z.O.O. (Po; Lesaffre Cesko, A.S. (Czech Republic); Lesaffre Far East Ltd. (Hong Kong); Lesaffre Ingredients; Lesaffre Malting Corporation (United States); Lesaffre Slovensko (Slovakia); Lesaffre Sudamérica (Brazil); Lesaffre-Cat Tuong Jv Co. Ltd. (Vietnam); Lesaffre Yeast Corporation (United States); London Malt Company (United Kingdom); Malterie Tournaisienne (Belgium); Panadis S.A. de C.V. (Mexico); Prodesa (Brazil); Saf Dniepr (Ukraine); Saf Do Brasil (Brazil); Saf Indonusa (Indonesia); Saf Neva (Russia); Saf Yeast Co. Pvt. Ltd. (India).

PRINCIPAL COMPETITORS

Associated British Foods; Japan Tobacco Inc; Altria Group Inc.; Nestlé S.A.; Unilever plc; Dobrogea Grup S.A.; Kraft Foods Inc.; Bunge Ltd.; General Mills Inc.; Orkla ASA; Dr. August Oetker; CJ Corporation.