Commercially driven it may be, but as Alan Swaby learns while talking to the GM for North America, this French food company is equally passionate about taste, choice and quality.
The world’s leading producer of exclusively vegetable products isn’t from North America. It’s French. But after conquering practically all the known world, it was inevitable that it would eventually turn its attentions to that continent.
Bonduelle has global revenues just short of $2 billion and employs over 8,000 staff in 18 countries. It deals with 4,000 farmers cultivating 100,000 hectares of land, the output of which is handled in 43 production centers worldwide and sold as branded products in 80 countries. But it’s a name practically unheard of in North America.
“Acquisition has always been a major part of our growth strategy,” explains Jerome Bonduelle, general manager of North American operations, “but being family owned we can take a long view on matters and wait until the right opportunity comes along. Three years ago it happened when we bought Aliments Carrière—Canada’s number one supplier of canned and frozen vegetables.”
As such, despite being the leader in Canada and one of the big(ish) boys in the US, the Bonduelle name per se is not in the public domain. But pick up a can or packet of Arctic Garden vegetables and you have Bonduelle in your hands.
“Our strategy is clear,” says Bonduelle. “We concentrate exclusively on vegetables in all forms—canned, frozen and fresh—and sell through every distribution channel, everywhere in the world. But achieving this exclusively on the back of the Bonduelle brand is not necessary.”
It’s a pragmatic position that allows the business to best shape itself to prevailing economic conditions regardless of the level of affluence. So despite the US being the biggest single market for food products, Bonduelle realizes that trying to make a mark at retail level would require such enormous marketing effort that it would break the bank. Instead, it accepts that just 10 percent of its US revenue comes from retail and rather concentrates on the 75 percent of sales that come from the food services sector.
Rather than being precious about products appearing under its own brand, a significant proportion of the business comes from private labels or co-packing deals on well known brands such as Green Giant or Del Monte that are owned by others but produced either exclusively or partly by Bonduelle for Canada.
“North America is a mature market,” says Bonduelle, “and it’s pointless creating extra capacity. Growth in the States in particular, will come from acquisitions. Countries such as Brazil, on the other hand, are growing vigorously and it makes much more sense to build more processing capacity there.”
At the time Bonduelle was eying up Aliments Carrière, the exchange rate with the US$ made business across the border extremely favorable. These days, though, an almost parity rate means that easy sales are long gone. “Our purchase of Aliments Carrière also coincided with an enormous price bubble in agricultural produce,” says Bonduelle. “Where once prices moved modestly ± 2 percent, 2008 saw demand from bio-fuels, as well as a developing Chinese and Indian market, create double digit movements. This year, prices have gone down but are still higher and more volatile than pre-2008.”
With a double whammy like this squeezing margins, it was inevitable that Bonduelle turned its attention to costs. In this respect, Jerome Bonduelle is highly complimentary of the management that had steered Aliments Carrière into its position of dominance. “The lean based program they developed in conjunction with Montreal consultants Pro-action, has been implemented at six of the seven North American plants,” says Bonduelle, “and the results have helped the business maintain its position through very difficult times.”
Overall, productivity has increased by at least 15 percent and as much as 30 percent. Plants are more responsive and can change from line to line much faster than before. “The most impressive feature, though,” says Bonduelle, “is the change of culture. The old fire-fighting ways have gone and instead we have a more motivated workforce embracing a proactive, problem solving mind set.”
The program has been so successful that it is being exported back to France and being implemented there under the guidance of the former Canadian head who is now general manager in Europe. “There is a huge difference in business style between North America and Europe,” acknowledges Bonduelle. “It would be good to inject a dose of Anglo Saxon pragmatism into lofty Gallic theorization.”
In fact, staff development is one of the key fundamentals of the Bonduelle corporate approach. In some countries it’s obligatory to allocate a percentage of total salaries into training programs but Bonduelle invariably surpasses that requirement and invests around two percent of salaries this way.
It’s all part of the grand plan to create a sustainable business in the sense that it will be viable and profitable for generations to come. As well as enhancing the skills of employees brought about by annual appraisals leading to tailored training programs, Bonduelle is an enthusiastic signatory to the French national aim of reducing agro-chemical usage by 50 percent. For example, instead of spraying weeds systematically, Bonduelle’s growers must follow good practice guidelines for minimum usage of herbicides, and the company promotes the use of the integrated production model, by sponsoring eight farms into a pilot program in Northern France. Then there is the constant battle to reduce water and energy consumption. So far, overall reductions achieved measure six and ten percent respectively while 90 percent of all vegetable waste is being recycled.
Despite increased affluence, very few of us eat as healthily as we should so the final link in the chain is to try and improve the nutritional intake of customers by supporting research, taking field initiatives, and participating in information and education programs. The Louis Bonduelle Foundation has created possibly the web’s most comprehensive information reference point on vegetables in which it places great emphasis on helping children develop a liking for nutritious food. In Canada, under its support to non-profit organization Jeunes Pousses (Fr. for baby leaves) it takes the message directly into schools, encouraging children to grow and then eat their own vegetables.
“What better way of sustaining a business and staying number one than by creating the next generation of healthy customers?” says Bonduelle.
