Picard Surgeles Business Information, Profile, and History
Picard is unique on the French frozen food market because it is both a distribution label and a brand name. The strength of this innovativ e concept enables us to offer our customers the double guarantee of a well-known brand and our own distribution network that now comprises more than 600 points of sale and 23 home delivery bases. For 30 year s Picard has selected and created the best products and perfected the best recipes in order to enable our customers to enjoy the pleasure of eating well every day.
History of Picard Surgeles
Picard Surgeles is France's leading frozen foods specialist. The Font ainebleau-based company operates as both a manufacturer and a distrib utor, with a network of more than 500 retail stores throughout most o f France. The company also operates an e-commerce capable web site an d offers home delivery services. Picard's revenues of more than EUR 7 85 million ($890 million) gives it a market share of more than 12 percent of the total French frozen food market, as well as approxima tely one-third share among the country's frozen food specialists reta ilers. Picard has distinguished itself through a commitment to high q uality and innovation. Some 95 percent of the more than 1,000 product s on offer at the company's stores are either produced by Picard or p roduced exclusively for the company, and sold under the company's own brands, especially the Picard name. Other brands include a line of p repared exotic meals under the Cuisine Evasion brand; ice cream, sorb ets, and other frozen desserts under the François Théro n name; Formule Express, for microwaveable meals; and Le Soleil, for Mediterranean dishes. Originally focused on the Parisian region, Pica rd has been steadily completing its national coverage, backed by a st rong logistics support system. The company also has begun a foray int o the international market, operating 45 stores in Italy, and offerin g delivery services to Belgium. Picard is led by Chairman and CEO Xav ier Decelle. In 2005, the company was acquired by investment group BC Partners.
Retail Frozen Foods Pioneer in the 1970s
Picard's growth into France's leading frozen foods specialist began o nly in the 1970s, when the company was acquired by Armand Decelle. No netheless the Picard name had already been associated with the frozen products market since as early as 1906, when Raymond Picard began pr oducing ice blocks and delivering them to local restaurants, cafes, a nd homeowners in Fontainebleau. By 1920, Picard's business had become known as Les Glacières de Fontainebleau--Etablissements Picar d. Other sources, however, date the establishment of the Picard famil y business to the 1940s.
That year marked a revolution in the international grocery industry. Clarence Birdseye had recognized the potential for flash-freezing foo ds while on a trip to the Arctic. Returning to the United States, Bir dseye developed a method for flash-freezing foods on an industrial sc ale, and the frozen foods industry was born. The frozen food revoluti on--which allowed the nutrients and flavors in foods to be preserved far longer than was the case with fresh foods--was slow in reaching F rance, however, where freezers, and even refrigerators, remained rari ties through the first half of the century.
This situation changed in the years following the post-World War II p eriod. France entered a period of extended economic boom. At the same time, as disposable income levels grew, the country embraced home ap pliances on a large scale. The growth of a leisure industry also enco uraged the growth of a convenience foods industry, enabling consumers to spend less time in the kitchen. Refrigerators grew in size and ad ded freezer compartments. Meanwhile, restaurants and cafes installed dedicated refrigeration and freezer capacity.
By the early 1960s, the Picard family had recognized that its traditi onal business of providing ice was doomed; instead the company conver ted itself to a wholesale supplier of freezers and frozen foods to th e commercial sector. In 1962, the company changed its name to Etablis sements Picard. The company's earliest products included chopped meat , breaded fish, spinach, and other vegetables. Over the next decade, the company continued to add to its catalog, and by the beginning of the 1970s, the company handled more than 300 frozen food items.
By then, a new consumer market for frozen food products had begun to develop in France. At first confined in large part to the rural and a gricultural sector, where large-sized freezers were more practical, t he market began to expand to include urban markets as well. The relat ively young supermarket industry responded to demand by broadening th eir frozen food offerings. At the same time, the country saw a boom i n catalog-based home delivery services. Picard itself decided to ente r this category, launching its catalog in 1971, backed by a small fle et of trucks. The family-owned company's operations remained decidedl y local. With just 10 employees, the company posted sales of only 6;750,000 into the early years of the 1970s.
The Picard name's fortune changed dramatically in 1973, when Armand D ecelle bought the company from the Picard family. Decelle had already had a successful career as CEO of Compagnie Générale d e Conserve, a canned good business later known as Secab-Daussy. Decel le had recognized the huge potential of the frozen foods business--in large part because of the superior quality, and convenience, of froz en foods over fresh and canned goods.
Decelle broke with Picard's past, however, steering the company's foc us to the consumer retail market. The company maintained its small ho me delivery business (which later grew into a significant part of the group's business), but now turned its attention to the retail store channel. In 1974, Decelle opened a first Picard frozen foods supermar ket, on the Rue de Rome, in Paris. The operation of the store not onl y served as an outlet, it also placed the company in greater proximit y to its customers and allowed it to tailor its product offering to c lient needs.
Picard quickly built up a range of some 400 frozen food items. The su ccess of the first store encouraged Decelle to open a second store, i n Pavillions-sur-Bois, followed by several others through the decade. Supporting the company's growing retail network was a new logistic f acility in Saint-Ouen L'Aumone in 1976. The opening of this site perm itted the company to take control of its supply and transport require ments and backed Picard's first growth phase. By the end of the decad e, the company operated more than 20 Picard stores.
Establishing a Frozen Foods Brand in the 1980s
In 1980, the company adopted a new store name, Picard Les Surgeles, a s well as a new logo featuring a blue snowflake. By then, however, Pi card was facing with growing competition from the supermarket sector, which not only had begun capturing the major share of the Paris regi on's fresh foods market, but also was coming to dominate frozen foods . Picard's suppliers soon favored the larger supermarket groups; face d with difficulties of supply, lower quality standards, and higher pr icing than its competitors, Picard made the strategic move of launchi ng its own branded line of foods, starting with vegetables.
The company soon took over much of the processing and packaging of mu ch of the Picard line, which was launched with some 400 items, and la ter doubled. In support of this effort, the company moved to a new he adquarters in Nemours. The site housed a new state-of-the-art warehou se facility, as well as a packaging plant and a small quality laborat ory. The company established strict quality standards, firmly positio ning itself on the high end of the consumer foods market. Although th e company's prices were higher than those of the supermarkets (and ev en higher than the prices at the small grocery shops), Decelle, joine d by twin sons Xavier and Olivier, put into place the company's promo tional pricing policy.
Each month, the company's stores and catalog placed a number of items on promotion, with discounts ranging up to 40 percent off. Unlike pr omotional items at other retailers, however, which tended toward unso ld and de-stocked items, Picard's promotions featured only ongoing it ems normally available at its shops. In fact, Decelle's original moti vation for the discount pricing policy was to encourage its customers to try new food items. Yet the company quickly recognized the added benefit of the discounted pricing, in that the lower prices on those items allowed a customer to balance his spending at the Picard store, bringing their total purchases more in line with the prices at the s upermarkets. Sales of the group's monthly promotions regularly accoun ted for 25 percent of total sales and more, and remained a mainstay t hroughout the company's expansion.
Picard invested little in promotional activities, preferring to gener ate new customers through word of mouth. In 1986, however, the compan y began publishing a monthly newsletter, Lettre Picard, which was distributed at the group's stores as well as in the Parisian edit ions of two television program guides.
Picard's commitment to quality and innovation resulted in the establi shment of a full-scale laboratory in Nemours in 1986. The company als o set into place a team of food engineers, assigned the task of devel oping new products and recipes for the group's ever-expanding line. C onsumer testing of new products, however, remained in the field. Rath er than invest in costly consumer research polling and studies, the c ompany instead preferred to place products directly in its stores. Pr oducts were then given a four-month period to prove themselves.
The company took a similarly organic approach to the expansion of its sales network. After establishing some 100 stores throughout the Par is region, the company decided to expand to the south of France, incl uding the regions of Lyons and Nice, as well as the Antibes. The grou p's choice of new target markets was dictated by the reasoning that t hese were popular vacation destinations for its Parisian consumer bas e, providing a ready-made consumer base for the brand. The first stor es outside of Paris opened in 1987, supported by a new logistics cent er at Vitry-sur-Seine. The following year, Armand Decelle turned over leadership of the company to sons Olivier and Xavier, who became co- CEOs.
Changing Owners in the New Century
As it continued its expansion, the Decelles decided to open up the co mpany's capital to outside investors. In 1991, the company sold a 10 percent stake to French hypermarket giant Carrefour. The company now launched a new expansion drive, opening as much as 15 new stores each year. By 1994, the company's network had expanded to 300 stores, and the group had opened a new logistics center in Avignon to support it s rising sales. In order to achieve still faster growth, the Decelles agreed to sell a majority stake in the company to Carrefour that yea r. Carrefour now took control of 79 percent of Picard, paying the Dec elles, who retained 21 percent of the company, nearly EUR 140 million .
Despite the change in ownership, the Decelle brothers remained at the head of the company and continued to lead Picard as an independent o peration. Yet the backing of Carrefour enabled the company to shift i ts expansion into overdrive; through the rest of the decade, the comp any began opening as many as 40 and even 50 new stores each year. By the end of the decade, Picard had established itself as a national ch ain, with more than 500 stores. The company also had launched an effo rt to replicate its successful retail formula on an international lev el, buying up the 45-store Gel Market from struggling French rival Ge l 2000.
Picard also launched its own e-commerce capable web site. The group's Internet sales, while limited to the larger metropolitan markets, bu ilt on the strong home delivery unit, which boasted more than 20 deli very bases throughout France into the 2000s.
Carrefour's takeover of Promodes, creating not only France's leading distribution group, but also one of the world's largest retail compan ies, led to a change of strategy. In 2001, Carrefour sold Picard to a management buyout, led by the Decelle family, and backed by an inves tment consortium headed by British buyout specialist Candover. The bu yout marked Olivier Decelle's exit from the company's direction; Xavi er Decelle continued as sole chairman and CEO.
With Candover's financial backing, Picard continued on its growth cou rse, boosting its store network to 600 stores by the end of 2004. The company began eyeing the possibility of going public. Instead, in De cember 2004, the company announced that it was being sold to a new in vestment group, BC Partners, in a secondary buyout that enabled Cando ver to nearly triple its initial investment. Despite the change in ow nership, Xavier Decelle remained as head of the group, which in just 30 years had established itself as the French frozen foods leader. Pi card hoped to build on this position, establishing its brand on an in ternational scale into the new century.
Principal Competitors: Carrefour S.A.; Etablissements E. LeCle rc S.A.; ITM Entreprises S.A.; Groupe Auchan; Rallye S.A.; Toupargel- Agrigel S.A.; Thiriet S.A.; Maximo.
- Key Dates:
- 1906: Raymond Picard begins producing and delivering ice block s in Fontainebleau.
- 1920: The company becomes Les Glacières de Fontaineblea u--Etablissements Picard.
- 1940s:Picard begins the first wholesale sales of frozen foods and fre ezers.
- 1962: The company changes its name to Etablissements Picard an d focuses on the distribution of wholesale foods and freezers.
- 1971: The company launches the first frozen foods catalog and home delivery sales.
- 1973: Armand Decelle acquires Picard company.
- 1974: The first Picard retail store opens.
- 1979: Headquarters are moved to Nemours.
- 1980: The Picard frozen foods brand is launched.
- 1987: The company opens its 100th store; the first store outsi de of the Paris region opens.
- 1991: Carrefours buys a 10 percent stake in Picard.
- 1994: Carrefour boosts its stake to 79 percent and backs an ac celerated store expansion program.
- 1999: Picard acquires 50 Gel Market stores in Italy from Gel 2 000.
- 2001: Carrefour sells Picard to a management buyout backed by an investment consortium led by Candover.
- 2004: Candover sells the Picard stake to investment group BC P artners.
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