Floc'h & Marchand

BP 20 111
Kerbethune Moreac
Locmine, France
Telephone: (33) 02 97 61 66 00
Fax: (33) 02 97 61 66 29
Web site: http://www.jean-floch.com

Private Company
Incorporated: 1989
Employees: 2,300
Sales: EUR 402.76 million ($480 million) (2004)
NAIC: 311611 Animal (Except Poultry) Slaughtering; 311612 Meat Processed From Carcasses; 311615 Poultry Processing

Floc'h & Marchand is France's leading privately held pork processor, with an output of more than 170,000 tons per year. The company, based in the Brittany region (the heart of the French pork industry) operates in all areas of pork production, from slaughtering to the distribution of fresh meat products to the production of processed and prepared foods, including delicatessen meats, frozen meats, and other products. Floc'h & Marchand, founded by Jean Floc'h and Bernard Marchand in 1969, sells its products under several brand names, including Jean Floc'h, Bernard, and Clermont Salaisons. The company is also a major supplier to the large-scale distribution channel. Floc'h & Marchand operate ten industrial sites, for the most part located in the Brittany region.

After weathering the swine flu crisis in the French pork industry in the late 1990s and early 2000s, Floc'h & Marchand has been investing in increasing its production in the mid-2000s, including a EUR 6 million expansion of its Clermont delicatessen meats plant in Liffre in 2005. Floc'h & Marchand is a private company and remains under the control of its founding partners. In 2004, the company's sales topped EUR 406 million ($480 million).

EARLY DAYS:PORK PROCESSOR

Jean Floc'h joined in the creation of the pork farmer's cooperative Cooperl in 1966. Based in Lamballe, in the Cote d'Armor region of Brittany, France, Cooperl was formed in order to provide technical assistance and marketing support for its member farmers. The French pork industry was then undergoing a transformation from a largely artisanal, local focus to an increasingly industrialized business. A driving force behind the change in the pork sector was the introduction of self-service supermarkets, and the development of large-scale and nationally operating distribution groups, such as Carrefour, E. LeClerc, Auchan, Casino, and the like. The rising demand for packaged pork products, and the steadily rising purchasing power and pricing pressure exerted by the retail giants, encouraged the growth of farmers' cooperatives such as Cooperl in order to help protect and serve their farmer-members' interests.

Floc'h was one of just 24 founders of Cooperl, but the cooperative grew quickly. By 1970, the group already counted 665 members, and production had risen from 8,000 pigs at the beginning to 210,000. By 1975, Cooperl's membership had climbed to 1,300, and the cooperative's total output had doubled to 480,000. While Cooperl's membership was to remain fairly constant over the next thirty years, its production increased dramatically—by the turn of the century, Cooperl represented a total stable of nearly 2.6 million pigs. The vast increase in productivity reflected the huge change that had taken place, not only in France's agricultural sector, but in the retail distribution market, consumer buying patterns. Food technologies and logistics also played a part in the growth of the sector. The development of refrigeration technologies in the 1950s, including refrigerated transport, made it possible to transfer slaughterhouses from France's urban centers to locations close to the country's pork farms. This led to the creation of several specialized slaughterhouses, including the Gilles slaughterhouse, built in Colliney in 1955, which served Cooperl.

Cooperl's operations remained limited to marketing its members' pigs and providing other technical service. Yet the Gilles slaughterhouse's financial crisis in 1977, and its subsequent takeover by the LeClerc supermarket group (which then began supplying its own retail network), led Cooperl to expand its range of functions. In 1978, the cooperative acquired stakes in its first two slaughterhouses. By 1979, Cooperl had taken over slaughterhouse operations directly.

Floc'h worked for Cooperl into the 1980s, where he was joined by close friend Bernard Marchand. Toward the middle of the 1980s, however, Floc'h and Marchand had begun to hatch plans to leave Cooperl and set up business for themselves. Their plans came to fruition in 1985, when Floc'h and Marchand, together with Floc'h's wife Yvonne and another friend, André Thébault, bought a small, family-owned deli meat producer, Clermont Salaisons. That company had started out as a butcher's shop in the early part of the century, until it was bought by Marcel Clermont in 1957. In 1965, however, Clermont led the business to focus on its production of delicatessen and salted meats (salaisons ), and Clermont Salaisons quickly established a regional reputation for its fresh, cooked and salted meat products.

Operating Clermont Salaisons whetted the partners' appetite for business. The group soon began exploring other avenues of business and by 1987 had decided to develop upstream operations, buying up a slaughterhouse in Locminé. This business was then named Bernard Locminé. The slaughterhouse facility not only helped supply the Clermont Salaison operation, it also gave the partners direct access to the market for fresh pork cuts. By 1989, the group prepared to expand still further, carrying out a large-scale expansion of the Locminé facility. At the completion of the expansion, the facility grew to a capacity of 35,000 tons per week, becoming one of the largest in the Brittany region. At this time, the founding partners founded a new company for the growing operations, called Floc'h & Marchand.

ACQUIRING SCALE IN THE 1990S

Floc'h & Marchand sought new areas for expansion into the 1990s. The company responded to the fast-rising demand for prepared foods in the early 1990s by founding a new company, Jean Floc'h Conserverie, inaugurating the group's own canning business. The company then added to its range of prepared and salted meat products, forming a new company, Bernard Salaisons, in 1995. A further extension in the category included the creation of Jean Floc'h Salaisons, which specialized in the production of different types of sausage, as well chopped beef products, and fresh pre-seasoned pork meats.

KEY DATES

1966:

Jean Floc'h is a founding member of Cooperl pig farmer cooperative.

1967:

Floc'h's friend, Bernard Marchand, joins Cooperl.

1985:

Floc'h and Marchand acquire Clermont Salaisons and begin production of processed meat products.

1989:

Company expands slaughtering capacity and adopts name of Floc'h & Marchand.

1990:

Company establishes the Jean Floc'h Conserverie and enters the canned meat market.

1995:

The Bernard Salaisons subsidiary is launched.

1997:

Frozen meat production begins.

1999:

A joint venture is begun with Kaufler to provide slaughtering and processing technology to Shandong, China.

2001:

Company acquires Charles S.A., a live pig sales agent, and regroups frozen meats business into single factory.

During the 1990s, Floc'h & Marchand rose to prominence as a leading supplier of pork products to the French market. The company also developed a strong export business through the decade, supplying not only other European markets, but markets in North Africa, the Middle East, and Asia. For these markets, the company developed specific products, such as pork-free products for Muslim countries. By the mid-2000s, the export market accounted for some 20 percent of the group's total sales.

Floc'h & Marchand itself made a brief excursion into the international market in the second half of the 1990s. In 1995, the region of Brittany set up an economic cooperation agreement with the Chinese province of Shandong. This led Floc'h & Marchand to join with Kaufler S.A., a supplier of slaughterhouse and meat processing equipment based in Brittany, to form a joint-venture with a local partner in Shandong to develop a business producing delicatessen meats and sausages. Launched in Jining in 1999, that company was later sold to another company and moved to Qingdao.

Closer to home, Floc'h & Marchand had set its sights on further expansion. The company acquired its first site outside of Brittany, at Montigny Le Bretonneux, near Paris, in 1998. That company, set up at the beginning of the 1980s, focused on supplying local butcher shops with cuts of meat. Following its takeover by Floc'h & Marchand, however, the Montigny factory expanded its operations to include the processing and preparation of vacuum-packed meat cuts for the restaurant and catering market. That operation was renamed as Bernard Montigny.

Floc'h & Marchand continued its growth through 1998, acquiring two slaughtering and processing units of fellow Briton Fleury Michon, a producer of packaged delicatessen meats. The first of the two was Loudéac Viandes, originally established in 1965 on a site belonging to the Olida Group, which was subsequently acquired by Fleury Michon in 1992. The second plant, called Ster Goz, was located in South Finistere, established in 1949 as a slaughterhouse. Once under Floc'h & Marchand's control, the Ster Goz site converted its operations to become a major boning facility, preparing meats for canned and salted meat producers, including parent Floc'h & Marchand.

FRENCH PORK LEADER IN THE NEW CENTURY

In the meantime, Floc'h & Marchand had begun developing a new line of business, that of frozen meat products. The company began investing in freezing capacity in 1997, adding flash freezers to several of its sites. The rapid growth of this sector, particularly through the large-scale distribution channel, encouraged Floc'h & Marchand to add a dedicated freezer plant in 2001, regrouping all of the company's frozen foods production.

Floc'h & Marchand faced a setback, however, with the outbreak of a swine flu epidemic at the end of the 1990s. The company saw its sales slip dramatic, amid sensational headlines. The company's international sales were particularly hard hit. A blow to the company came from the banning of pork imports to South Korea, a major export market for Floc'h & Marchand.

Nonetheless, the company continued to invest in its expansion. In 2001, the company acquired Charles S.A., based in Sizun, near Brest. That company had been founded in 1977 and served as a sales agent for live pigs. By 1983, Charles had begun exports to Italy, and especially Sicily. Charles later added exports to Germany and else, as well as becoming a supplier to Floc'h & Marchand's Bernard plant in Kerbéthune.

Into the mid-2000s, Floc'h & Marchand remained a prominent player in the French pork market, and by the middle of the decade had become the country's leading privately owned pork products supplier. Under the continued leadership of founders Jean Floc'h and Bernard Marchand, the company remained committed to its future growth. In 2005, for example, the company spent some EUR 6 million on a major expansion of the its Clermont production facility.

PRINCIPAL SUBSIDIARIES

Bernard Jean Floc'h Locminé; Bernard Locminé; Bernard Montigny; Clermont Salaisons; Jean Floc'h Conserverie; Jean Floc'h Salaisons; Jean Floc'h Surgélation; Ster Goz.

PRINCIPAL COMPETITORS

Danish Crown AmbA; Sovion N.V.; Kerry Group plc; Orkla ASA; Groupe Terrena; Sadia S.A.; SOCOPA S.A.; Glanbia plc; Agrial; Doux S.A.

FURTHER READING

"Crise porcine: l'ensemble de la filière est touché," Les Echos, April 30, 1999.

"Fleury Michon se sépare de deux de ses filiales," Les Echos, January 15, 1998.

"Floc'h & Marchand crée un joint venture en Chine," Les Echos, April 15, 1999.

"Floc'h investit dans le surgelé," Les Echos, September 15, 1997.

"Floc'h Marchand revient sur le marché coréen du porc," Les Echos, October 29, 2002.

"French Meat Firm Plans Major Investments," Agra Europe, August 13, 1999.

"Itinéraires de "self-made patrons": Jean Floc'h, 62 ans," L'Expansion, February 3, 2000.