Food and Drink Franchise - November 2015

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N ove mb e r 2015 • w w w.fdf wo r l d.c o m


TOP10 Bar Franchises

Flexibility and Timely Delivery: Priced Traits in Agriculture

BEER An Industry in Flux How businesses like Amazon and Tesco are succeeding in online delivery


W E L O V E B E E R A S much as the next team—

maybe more. Chalk it up to living and working in one of the great craft beer capitals of the world. There’s never a shortage of unique and exciting brews to sample, and it’s our job to make the most of it. So we’ve been fascinated by the changing state of the beer industry. Consolidations, partnerships, acquisitions—from craft to macrobrewing, the many facets of brewing are evolving and merging, and the future of the industry could be interesting. In this issue we’re taking a look at some of the biggest recent changes and how they could affect the industry as a whole. We’re also looking at other big changes in industry, like online delivery changing the grocery retail industry. So read on, enjoy, and consider how your own industry is changing and how to stay ahead of the curve.

Enjoy the issue!

Sasha Orman Editor 3





PRODUCTION Craft Going Global RETAIL Special Delivery

18 4

November 2015

TOP 10 Franchises Embracing


Dairy Technical services

Company Profiles


San Clemente Agro

38 PifPaf




Craft brewing is becoming a global interest

Writ ten by SASHA ORMAN


PRODUCTION THE CRAFT BREWING industry in the United States is in the midst of runaway success. In September the Brewers Association, a trade group representing the country’s brewing industry, announced that the U.S. is now home to more than 4,000 breweries—rapidly approaching the country’s historic high of 4,131, a number not seen since pre-prohibition days in 1873. But craft beer has always been a global interest to some degree— just ask the steadfast brewers at Scotland’s pioneering Brewdog—and as the industry grows in the United States, it is spreading its wings and preparing to expand outward onto the global stage. Through acquisition and organic growth, the craft beer market is reaching all new audiences. Growth by Acquisition and Partnership In many businesses, the most direct path to growth is through consolidation—by joining forces, two businesses can pool their techniques and resources to reach an even wider audience. For several craft brands over the past year, acquisition and partnerships have been presented as 8

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a key to growth. Firestone Walker was perhaps the first big name in craft brewing to announce its role in a global acquisition this year. In June 2015 Firestone Walker announced that Duvel Moortgat, a century-old familyowned Belgian brewing company known for its eponymous pale ale flagship, had acquired the awardwinning Central California craft brewery for an undisclosed sum. According to a press release issued by Firestone Walker, the decision had everything to do with getting its beers to a wider audience and Duvel’s ability to help Firestone Walker meet its global goals while maintaining its purpose. “Duvel Moortgat’s investment in us is an elegant solution that will enable us to grow within a framework that meets our standards— all without losing focus on the traits that got us here,” states the message. Later in the year, California craft brewing innovator Lagunitas followed suit with the announcement of a 50-50 partnership with Dutch giant Heineken, one of the four biggest brewing companies in the world. By selling a 50 percent stake in Lagunitas, owner Tony Magee has asserted


A trade group representing the country’s brewing industry, announced that the U.S. is now home to more than 4,000 breweries that the craft beer brand is still very much directing its own destiny. But by utilizing the resources that Heineken has to offer, Lagunitas will be able to realize its goals on a global scale, with Heineken seeing the benefits of a craft brand in its portfolio. “This venture will create a way for Lagunitas to let Heineken participate in the growing craft beer category across its global distribution network in places from Tierra Del Fuego and Mongolia to the far-flung Isle of Langerhans,” said Magee in a press release announcing

the merge. “Lagunitas will share in the best quality processes in the world and enjoy access to opportunities that took lifetimes to build. This alliance with the world’s most international brewer represents a profound victory for U.S. craft. It will open doors that had previously been shut and bring the U.S. craft beer vibe to communities all over the world.” Acquisition is not without precedent in the craft brewing world—Goose Island is famous as one of Anheuser-Busch InBev’s first acquisitions, followed by 9


With brands like Goose Island and Golden Road under its belt, AB InBev has already shown a vested interest in assimilating craft breweries into its own portfolio names like Elysian, 10 Barrel Brewing, and most recently Los Angeles-based Golden Road. But the fear with a full-on acquisition is that the goals of the parent company may not align with the goals of the craft brewer or the craft brewing community ethos in general. But if Lagunitas and Firestone Walker are successful in navigating their new partnerships, it could usher in a wave of non-traditional mergers that allow craft brewers to find growth and financing while still maintaining 10

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more craft clout and greater control of their brand. A global partnership without precedent But by far, the biggest merger that could change the face of the craft industry—and the brewing industry as a whole—is the merger that could now be underway between global powerhouses AB InBev and SABMiller. In mid-October, after several bidding rounds, AB InBev was finally


successful “in principle” with its latest bid to acquire SABMiller. Even after divestitures, the entity that will emerge from a merging of AB InBev and SABMiller—if global trade commissions allow the merger to proceed—will have an unprecedented plurality of the brewing market share. With brands like Goose Island and Golden Road under its belt, AB InBev has already shown a vested interest in assimilating craft breweries into its own portfolio. A merger between the two largest brewing companies in the world would create even more wealth to entice smaller breweries for the financial backing to grow their business. Organic Growth Truly organic growth, without acquisition or stakeholders, is difficult for any brand including those in the craft beer industry. But it’s far from impossible. With enough momentum and global recognition, craft breweries are making the leap from regional favorites to national and even global cult classics. Stone Brewing Company is perhaps the greatest example of this organic growth on a global scale. In 2014

the San Diego craft brewing giant announced an initial investment of $26 million into the construction of a brewery and bistro in Germany, making it the first United States-based craft brewery to build a presence in Europe. “Stone’s future European home will serve as the company’s international hub; a central location promoting goodwill and quality craft beer spanning the globe,” said Stone President and Co-founder Steve Wagner. “With this expansion comes our commitment to brewing bold, aggressive, hop-forward beers in a country with a long history rooted in the art of brewing.” By making its own investment in global growth, Stone Brewing allows itself the assurance that it will always be able to stay entirely true to its brand. But it is a significant investment and a significantly adventurous risk—one that some other brands may be more willing to take with the support of a powerful global brand behind it. But one way or another, the craft industry is gaining momentum as a worldwide movement, and the industry will only continue to change. 11


SPECIAL DELIVERY How are businesses like Amazon and Tesco succeeding in online delivery? How can your retail business do the same?

Writ ten by SASHA ORMAN


R E TA I L CONVENIENT, BRIGHTLY LIT and filled with all of the necessities and impulse buys a consumer can imagine, why would anyone choose delivery over the immediate gratification of grocery shopping in person? It seems like a strange thought in hindsight, but it wasn’t too long ago that this was the prevailing thought—forward-thinking startups like Webvan that made a run at grocery delivery ended up failing when the dot com bubble burst. But technology evolves fast, and what was strange 20 years ago is looking more appealing today, especially in crowded cities. By the mid-2000s regional delivery services like FreshDirect were starting to pick up traction, and in 2007 delivery powerhouse Amazon started testing the waters of grocery delivery with its first beta test of AmazonFresh. Today grocery delivery is thriving as a billion-dollar business, with everyone from startups to the biggest retail names like Walmart and Tesco on board. According to a new study from A.T. Kearney, online grocery delivery is expected to account for 12 to 16 percent of the total grocery market share within the next decade. But even with this steady 14

November 2015

Today grocery delivery is thriving as a from startups to the biggest retail na growth, success in this arena is not necessarily a sure thing for every retailer—Albertsons discontinued its delivery service years ago, and has yet to try again. Before investing in building an online delivery service for your brand, understanding what makes online delivery services successful is essential. Convenience is Key Why would consumers choose


a billion-dollar business, with everyone ames like Walmart and Tesco on board online delivery services over visiting a grocery store in person? Today’s culture is one of convenience, and after a long day at work consumers are much more receptive to—and even willing to pay a premium for—the idea of delivery, especially when they can place an order from their computer at work or from a mobile app during the commute home. While the biggest draw for any consumer is savings, the study finds that consumers are

willing to sacrifice some savings if it’s compensated in extra convenience. “Nearly two-thirds of respondents say they would shop more online if they were offered convenient checkout and had the ability to quickly reorder items,” reads the study. “Furthermore, many are willing to pay more for the convenience of not having to go into a store. Eighty percent of respondents say they are willing to pay for home delivery instead of going to the store 15

R E TA I L for pickup—particularly when it comes to same-day service—even as the majority are visiting the store to shop.” In other words, it’s not just about offering the option for online delivery: it’s also about the way that it’s offered. Today’s consumers have grown accustomed to the ease of e-commerce giants like Amazon, and an online ordering form that is frustrating or unintuitive can end up turning consumers away. Investing in a quality easy-to-use mobile app that saves information and allows for features like easy reordering can be your best bet for success. A Three-Pronged Approach to Engagement Convenience may be somewhat intuitive, but beyond that the study identifies three key points that retailers must master to be successful in capturing a piece of the online grocery market share. The first of these points is segmentation, or drilling down to identify sections of your potential consumer base that could benefit from online services the most. This might be busy people who arrive home late or work odd hours, and can’t easily 16

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make it to the grocery store during normal hours. Or it might be a new mother, who could benefit from the ease of delivery over venturing outside and juggling groceries with a newborn. Or it might be an elderly person, who may have physical issues leaving the house regularly but can gain an increased self-sufficiency with the help of online delivery services. By better understanding demographic segments, a retailer can reach out in a more tailored way through perks like coupons and suggested items. “Treating delivery as a unique channel offers retailers the ability to provide a degree of personalization and flexibility that they cannot via their traditional channels,” says the study. The second point is value proposition—in other words, for the average consumer to choose online delivery over visiting a store, it needs to be worth their while. This can be achieved through offers like same-day delivery and hybrid convenience options like clickand-collect, a popular choice for Tesco online service customers. The third point is a true and honest form of engagement with the consumer base. After all, consumers


Consumers are willing to sacrifice some savings if it’s compensated in extra convenience. who stop at a store in person are much more likely to choose whichever store is most convenient—on the way home, most likely to have a specific product they’re looking for, most likely to have an available parking spot. Choosing an online delivery service, on the other hand, requires a somewhat higher level of trust and goodwill. “[It’s] about

much more than using multiple media such as TV, direct marketing, or coupons to reach shoppers,” the study explains. “Rather, it’s about creating a personal, integrated experience for every shopper regardless of where or when they shop or what device they are using. This has to extend the entire purchase lifecycle.” 17

TOP 10

Top 10 Franchises Embracing Craft Beer Written by: Sasha Orman


TOP 10

Img credit: The Casual Pint Chattanooga Facebook Page


Brew Rebellion

Does brewing appeal to you more than sales or restaurant managing? Brew Rebellion could offer a unique and enticing franchising opportunity. The Yucaipa, CA-based microbrewery is actively seeking out franchisees to join its family, offering everything from training to full marketing and business plans to help partners jumpstart their microbrewing dreams.

Img credit: Brew Rebellion Facebook Page


November 2015


The Casual Pint

Another franchise that takes on the bottle shop model, The Casual Pint bills itself as “a distinct alternative to the typical bar,� serving craft brews in pints, bottles, and the take-home growlers that are a hallmark of the craft beer industry.


Img credit: Global Brew Tap House - O’Fallon Facebook Page


The Brass Tap

While many craft beer joints go for a neighborhood pub feel, The Brass Tap aspires to a more upscale (yet still distinctly casual) beer bar atmosphere, supplementing a broad range of 60 to 80 craft beers on tap with wine and food to share.

Img credit: Brew The Brass Tap South End


Global Brew Tap House

Based in Illinois, Global Brew Tap House is a rapidly-growing bar franchise aiming to introduce consumers to craft beer from the United States and around the world through brick-andmortar locations and its Mobile Brew truck concept. With Beer School consumer education sessions and servers who go through Cicerone training, Global Brew is committed to craft beer excellence and looking for franchisees with the same values.


TOP 10

Img credit: Craft Beer Cellar Clayton Facebook Page


Craftworks Restaurants and Breweries Inc.

Selling and drinking beer is a lot of fun, but those who want an even more hands-on approach may want to consider a franchise that makes brewing part of the package. CraftWorks Restaurants and Breweries Inc. has several franchised brand options for potential franchisees to choose from—Old Chicago, Gordon Biersch, and Rock Bottom—each with their own highlights and a focus on beer.


Craft Beer Cellar

When we think of franchises serving craft beer, we most often think of restaurants and pubs. But don’t count out retailers. Founded in 2010 by a pair of beer enthusiasts, Craft Beer Cellar uses a franchise growth model for its craft bottle shop concept. Since its inception, Craft Beer Cellar has expanded to 19 locations nationwide with 15 more in the works. 22

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IMG sources: Wikipedia Red Robin in Tukwila Washington


World of Beer

Created in 2007 as a marriage of craft beer and the sports bar model, World of Beer has spent the last decade building a steady following and actively seeking franchisees to further its mission of bringing craft beer lovers together.


Red Robin

Red Robin is known for its mixology, but now it’s strengthening its beer offerings. To show it’s serious about its commitment to craft beer, the casual franchise recently partnered with the Brewers Association to sponsor the Great American Beer Festival.


TOP 10

Img credit: Alamo Drafthouse Austin Facebook Page

02 Alamo Drafthouse Cinema

Texas franchise Alamo Drafthouse has made a name for itself providing a quirky and unique movie-going experience, combining artful movies with thoughtful upscale food and drink (including a lineup of local craft beer selections). Since 1997 Alamo Drafthouse has expanded out of Texas into a total of 10 states, with plenty of room to continue building.


TOP 10

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TGI Fridays TGI Fridays is one of the most well-known casual dining franchises in the United States— it’s also one of the most craft beer-forward franchises in the industry. In 2011 the chain first launched its Better With Brews program, which brought regional craft beers onto the menu.

Img credit: Wikipedia


DTS Food La

Breaking down the

CEO Graeme Richardson discusses the growth o capabilities in the field of fo

Written by: Sasha Orman Pr


e science of food

of DTS Food Laboratories and its expanding ood testing and auditing

roduced by: Rob Benson 29


DTS Food Laboratories was founded in 1954 in Melbourne as Dairy Technical Services


Graeme Richardson, Chief Executive Officer 30

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utritional values, pesticides, allergens, GMOs—people want to know what’s in their food, and transparency in the food and beverage industry is more important today than ever before. In 1954, DTS Food Laboratories (DTS) formed to lend its analysis expertise to Australia’s dairy industry. Over the years, the company has risen to national recognition as a trusted name in the marketplace, providing analysis and support to clients including Murray Goulburn, Fonterra and Warrnambool Cheese & Butter, as well as Dairy Food Safety Victoria and authorities throughout New South Wales and Queensland. Maintaining continuous accreditation from the National Association of Testing Authorities (NATA) since 1961, DTS now services the needs of the wider


food manufacturing industry as well. Client-driven investments DTS maintains a strong investment program aiming to engage its clients and improve their experience, trimming turnaround times and adding to its range of capabilities. “We’ve been gradually adding to the range of services that we provide to ensure that the companies are able to get their total needs met by a single company,” says Graeme Richardson, CEO at DTS. “We’ve been adding testing capabilities for those emerging issues such as pesticide residues, allergens, and recently identified bacterial species that can cause sickness or death.”

“We have a philosophy that not only should we be able to do the testing, but we should also be able to provide technical advice to our clients to help them understand the results. It’s a total line of service.” – Graeme Richardson, Chief Executive Officer DTS Food Laboratories

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DTS can provide the services cheaper than what it would cost to run testing internally

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In 2012, the company bought the cutting edge laboratory Food Allergen Control Training Analysis (FACTA), giving clients access to Australia’s leading analytic capabilities in the allergen field. To help clients make sense of these analytics, DTS has invested heavily in support services. “We have built significant technical support that we can offer our clients,” says Richardson. “We have a philosophy that not only should we be able to do the testing, but we should also be able to provide technical advice to our clients to

help them understand the results. It’s a total line of service.” The appeals of independent assessments Internal audits and checks are routine in the food and beverage industry, but as Richardson explains, third party testing is key to acceptance of a product by customers. “It’s an independent assessment of product,” says Richardson. “We can’t be influenced by pressures to modify our results.” But this is not the only reason why a producer may choose to w w w. d t s f o o d l a b s . c o m . a u /



consistently partner with a third party testing service. Another key factor is the reduced lead-time specialists like DTS provide. “Being the largest supplier of food testing services in Australia means we can offer faster turnaround times especially in Chemistry because we start more batches per week of


November 2015

each test and handle bigger volume surges when customers have problems with their products” says Richardson. A full suite of fast, reliable services is of particular appeal to businesses that service the short shelf life ‘ready to eat’ markets where shelf life is absolutely critical.


“For businesses that do their own testing, the loss of a quality manager can be a major disaster, and quite often they are not easy to replace— especially if the facility happens to be outside a capital city,” notes Richardson. “Generally DTS can provide the services cheaper than what it would cost to run testing internally, and this fact has seen a number of factory laboratories shut down, and DTS carries out the testing at its laboratories in Melbourne, Sydney and Brisbane.”

Paul Bellchambers National Sales & Marketing Manager

DTS carries out the testing at its laboratories in Melbourne, Sydney and Brisbane

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DTS maintains a strong investment program aiming to engage its clients and improve their experience

Seamless service through teamwork In a complex environment where efficiency and precision are of the ultimate importance, coordination between departments is paramount. “Whether it’s just routine testing or whether a client is trying to sort out production issues, we need to be able to get their samples into our 36

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system quickly, move it through our system efficiently, and get the results out as soon as possible,” says Richardson. “Each of these steps involves a different group of people.” Teamwork is encouraged as a core part of DTS company culture, fostered through extensive training opportunities, including


management certificates and diplomas in partnership with Victoria University in Melbourne. “We put a lot of effort into training and developing our staff,” says Richardson, noting that there are many reciprocal benefits to this practice. “We have quite a positive work environment—modern facilities with a lot of natural light, and flexibility in meeting peoples’ needs. In return, people tend to go the extra mile. When there’s a sudden surge of business or an issue arises that needs to be addressed quickly, people are prepared to dig in and help.” The road ahead “Our task is to meet the needs of our client. That’s how everything is judged, and that’s what makes us a trusted partner, because that’s what we do for our clients,” says Richardson. DTS Food Laboratories has a rich history of service behind it, and Richardson sees positive things to come as the business continues to spread its wings to new sectors and new clientele. “I think the future is exciting,” he says. “We will continue to add capability, and we look to extend the range of clients that we service and to expand geographically.” As consumers increase their interest in their food, and transparency becomes ever more critical, there is plenty of testing and analysis left to do—and DTS is ready for the challenge.

Company Information INDUSTRY

Testing and auditing services HEADQUARTERS

Unit 3 63-71 Boundary Road North Melbourne, Victoria Australia, 3051 FOUNDED



$50 million

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Among the ten largest Brazilian companies in the poultry p invests in the expansion of its portfolio through pork, pasta Written by: Flรกvia Brancato | Produced by: Taybele Piven



processing industry, the company a and vegetables



First slaughterhouse and trade - Rio de Janeiro in 1968


ounded in 1968 as a small slaughterhouse in Rio de Janeiro, Pif Paf Alimentos was considered the largest live poultry wholesale in the state at the time. Now, managed by the second generation of the Costa family, it is the sixth largest Brazilian company in the poultry processing industry, pork, pasta and vegetables. Headquartered in Belo Horizonte, Minas Gerais state, the company 40

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employs approximately 8,500 people and operates in the Southeast, Midwest regions, in addition to south of Bahia state. In total, the Pif Paf Alimentos operates five plants and twelve production units. Focused on quality and practicality, the company develops easy-to-prepare products. Its portfolio consists of more than 300 items, from meat combos, pizza,


and cheese bread to snacks and sausages, serving approximately 80,000 customers. Production chain The company supplies raw poultry and pork to the industry through its feed mills, hatcheries and broiler breeders. “We now have about 600 integrated producers where 100% is intended for supplying the company’s own industries,” said Luiz Carlos Mendes Costa, CEO of Paf Pif Food. Producers have facilities available to perform necessary handling for

animals are delivered to industrial units, while Pif Paf operates as an integrator, providing the basic inputs such as animals for breeding, balanced rations, medicines, technical assistance, and other inputs. In addition, Pif Paf coordinates the operations of Tropical Alimentos—a juice company of TIAL and Máximo brands. The company also works with products such as lamb, fish and vegetables, among others. The current industrial park has two units dedicated to the slaughter and processing of poultry and swine, as

Seasoned products packaging

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First export, Mr. Avelino Costa

well as an fish processing and precooked pasta industries. “ In 1975 my father signed the first contract of Brazil’s poultry export. In a way we are responsible for starting point to what Brazil came to be today, ranking as one of world’s largest exporter of chicken meat. Recently we ranked as the country’s sixth largest poultry and pork producers by Exame Magazine’s Biggest and Best 2015,” said the 42

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CEO. Pif Paf recently took a big leap with the construction of the Agroindustrial Complex in Goiás. The plant consists of a hatchery, feed mill and one of the most modern frozen poultry complexes in the country. Overcoming Challenges “Over the past decade, our industry has undergone profound changes.


Animal food factory in Visconde do Rio Branco/MG

Of the top 10 companies, excluding two large cooperatives and Pif Paf, all others have switched ownership. Pif Paf, therefore, can be seen as an exception,” said Costa. The high concentration of the sector occurred with the formation of these two major cooperatives, which account for about 50 per cent of the market. One of these companies is the result of the merge of the two largest in the sector, while the other formed from acquisitions made by the world’s largest

and most accomplished animal protein company. Both relied on state-owned banks for significant contributions. “We say that the secret to remain in this group is to do your homework and always offer something extra, whether it’s quality, price, service, or appreciation for the people who work hard, one way or the other, to be a part of our business providing products,” Costa added. Costa also points out the importance to circumvent w w w. p i f p a f . c o m . b r



challenges and continue to show positive results. “I cannot say that it is normal to live in such a scenario; however, our results do not fall short, regardless of competition, merges and corporations. We remain humble, but at the same time proud, to be part of this select group of food industry.” Quality indicators “To be recognized by Editora Globo in a recent annual assessment evaluation, conducted by ÉPOCA

Business magazine, as the second best among the country’s frozen food industries, is a sign that we are on track,” said Costa. The analysis evaluated strictly technical indicators considering six dimensions: financial performance, corporate governance, potential for innovation, environmental responsibility, vision and HR practices. “By placing us above large conglomerates that act globally in the sector, it shows that in addition

Cutting room, Pif Paf in Palmeiras de Goiás


November 2015


to economic goals, we at Pif Paf adopt the best management practices, innovate with differentiated products, practice social action in our communities, care for the environment, as we have long-term strategic planning, and hold our employees as our ‘higher value,’” he said. When it comes to quality, the company has its own multidisciplinary teams of experts in their respective areas to ensure the standardization of processes and

product quality. The team consists of analysts and internal auditors who closely follow compliance rates in all areas of the company. Above all, there is the implementation of continuous improvement programs, by forming groups of QCC— Quality Control Circle—and CIG— Continuous Improvement Groups. Through prevention programs, training and investment to improvements in processes and work environments, the company has engineers, safety technicians

Frozen food expedition

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November 2015


and analysts to implement best market practices that are focused on facilities and personnel safety. Professional and Administrative Development Attracting and retaining talent are key goals of management in the Pif Paf Group. Investment in human development is increasing, with the mindset to develop leaders who can create an ideal that transcends the organization. “With attention focused on the assessment of skills of our

professionals and individual development programs, career and succession significantly increase the manpower of quality applied to business,” said Costa. The company also promotes internships. This year alone, 72 students from different specialties have joined the team. The director explains that this is one way to attract new talent to the group and foster the development of professional, technical, and behavioral skills. The Board of Directors defines

Break room in one of Pif Paf’s industrial units

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The first is still the best.

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Luiz Carlos Mendes Costa

corporate management strategies, and the business plan adhers to the chosen scenarios. The implementation is based on the concepts of corporate governance through the audit committee, finance, communication and crisis management, anticipative intelligence and cash flow.

15-01-504 AZ Biolys The first is still the best, 97x137mm, port_en.indd 2

News and Investments “In a period of economic recession, we maintain our position in respect 48

November 2015

to investments for the development of new products, improvements in quality and distribution,” said Costa. On the production line, Pif Paf invested on cold chains, the automation of slaughter lines, processed products such as meat (wieners) and thermoformed products (hams, ham based and cold pork cuts). Internally, two important websites are noteworthy:, where the company conducts online auctions

13.10.15 12:45


Company Information INDUSTRY


Belo Horizonte/MG Brazil E S TA B L I S H E D



and e-commerce; and br, which is a direct sales system for consumers. Investments in logistics software management programs, production planning and the newly acquired SAP BPC module—Business Planning Consolidation—complete the investment plan. The director confirms that Pif Paf Alimentos is investing on the expansion of Palmeiras de Goiás poultry slaughter and processing unit, focused on the development of new products with greater practicality and improved quality and distribution of products. “By 2016, a total of USD $13.7 million is being forecasted for these investments.”

Processed poultry, pork, pasta, vegetables, fish MANAGEMENT

President: Avelino Costa Chief Operating Officer: Luiz Carlos Mendes Costa

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FLEXIBILITY & TIMELY DELIVERY: Priced Traits in Agriculture Adapting to clients’ demands in the global market pays off for Chilean apple giant San Clemente Foods.

Written by: Mateo Rafael Tablado, Associate Editor Interview by: Rebecca Castrejon, Editor Produced by: Taybele Piven, Director of Operations at WDM Group-LATAM Interviewee: Pablo Fehlandt, CEO for San Clemente Foods



he Agricola San Clemente venture originated from a property exchange, when country lands located in the Maule province near the city of Talca -in Chile’s central valley, the country’s agricultural stronghold-, became an asset for a real estate development group who were experiencing a housing surplus during a financial crisis in the mid eighties; housing

Ultrafiltration machinery 56

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units becoming expendable and new opportunities were sought, as farming became the new activity for this business group. ‘Surplus’ became a common term in the organization, since fruit production thrived beyond expectations and beyond the possibility of placing the entire production in the domestic


marketplace. This fact was a call for action for San Clemente’s high management, resulting in the creation of a packaging division and building a cold store, which also meant the beginning of export operations for the company; this is how San Clemente Foods was born, as an affiliate in charge of exporting juice from concentrate, purée and other by-products. In 2012, the San Clemente Foods division moved to a new facility. The company’s operation

Key People

Pablo Fenhaldt CEO Fehlandt -an industrial civil engineer-, graduated from the Pontifical Catholic University of Chile. He was hired as CEO for San Clemente Foods in mid-2014. Fenhaldt is experienced in logistics, chain supply management, production planning, stocking and delivery. Previous employers include Metrogas (for domestic use), Ducasse (sliding doors), a cosmetics lab, and hydraulic cranes sales. Being appointed as San Clemente Foods’ CEO answers to a need of strengthening the company’s presence abroad and making the most out of the company’s new facilities, which opened in 2012.


SAN CLEMENTE FOODS is certified by global entities such as: the British Retail Consortium, the U.S.’s Grocery Manufacturers Association and the European Food Safety Inspection Services, to name a few.

cranes sales, fuel distribution, cosmetics and sliding doors; in these activities he learned about supply chains, stocking, production planning and other procedures.

“The board needed a CEO with a But if there’s an attribute that background in operations, to make makes San Clemente stand out from the most out of the new facility and its competition, is the ability to adapt increase our competitiveness in the to every client’s needs and demands global market,” Fehlandt shared. according to global packaging standards. RESULTS AND ADAPTABILITY, THE PILLARS FOR GROWTH “Our ability at catering for every client’s specific requirements in a The new facility used exclusively timely fashion makes a difference,” by San Clemente Foods is a 37stressed Pablo Fehlandt, CEO for acre where the constructed area San Clemente Foods. of 75,000 sq ft provides a wide margin of operational freedom to the Fehlandt, a civil engineer, has a division. This place hosts recently sixteen-year experience in different acquired machinery, new systems trades such as hydraulic and more than enough room to


perform new production procedures according to the most important clients’ demands and standards, since San Clemente Foods’ exports account for more than 20 percent of San Clemente group’s total revenue. “We strive to be a dynamic enterprise fully enabled to fulfill our clients’ needs,” the CEO pointed out. STRONGHOLDS: CLEARLYDEFINED EXPORTS MARKET Currently, San Clemente Foods exports value added products (juice from concentrate and purées) to the European market and the U.S., mainly. The operation has presence also in the Asian and South American markets; future plans consider a stronger strategy within these regions.

“We are consolidating our presence in Asia, and also developing a widescale operation scheme in Latin America,” Fehlandt said.

ADAPTABILITY AND TRANSPARENCY AMONG PURVEYORS AND PARTNERS Brokers and traders stand out from San Clemente Foods’ supply chain, as these foreign trade experts are crucial to exports operations; constant contact with them is very important, since they are the link with every country and end clients, which are large companies -packaging companies alsodeveloping new products and new packaging features according to their in-market demands and to new safety requirements by law. This means that other important purveyors provide San Clemente of packaging: sterile containers,


Inside San Clemente’s processing plant


metalized film and sealed bags, for example. These suppliers must display the same flexibility and availability shared by San Clemente’s divisions, earning clients’ trust and continuous business. “We must work hand in hand with our suppliers to meet specific requirements, they must be adaptable too,” the executive expressed.

Products are processed under global standards

AUTOMATION: A MUST Fruit production involves different tasks, some of them seasonal, which do not partake in the production process during the entire year. The problem faced by any company is at the beginning of every new cycle, when not all the part-time personnel comes back, and new hires require constant training, even though more than 80 percent of the workforce returns to San Clemente for every new season. This constant shortcoming results in searching for new automation procedures to optimize operations, since demand for organic products -subject to less processes- requires higher, flawless control, thus increasing the need for cutting-edge technology.

Increasing organic products’ exports

Bucher press

“Recent investments are focused on automation and procedure optimization to ensure quality,” Fehlandt explained. w w w. s a n c l e m e n t e f o o d s . c l


San Clemente employee

WORK ENVIRONMENT IMPROVEMENTS Upper management at San Clemente Foods believes in the results from providing constant training to employees and proper conditions for their wellbeing, considering these factors as a motivation for them to deliver their best at work. The company also creates evaluation systems to detect improvements to be made in the workplace. “During the last year we have 62

November 2015

focused in personnel development; the highest their motivation is, the best they will perform for the company,” said the executive. COMMUNITY AND SURROUNDINGS Agriculture demands care for the environment and other resources such as water and its after-use conditions. San Clemente Foods already invested in a water treatment plant, claiming that residual waters come out with cleaner than the required compliance levels. “These efforts are aimed to avoid any damage to the area’s farmers,

High quality fruit and by-products

“Individuals are the core of every business, the human resource must be properly developed in order to improve and optimize operations” – Christian Onetto, CEO of Cisco Colombia

w w w. s a n c l e m e n t e f o o d s . c l



who are our main fruit suppliers,” Fehlandt remarked.

To keep up with this rate, the company’s main strategy is to differentiate from the competition PORTFOLIO INNOVATIONS beyond the commodity market by offering value added products. This San Clemente Foods’ increased plan got the green light during early global presence was brought by a 2015, with the production of notnew direction brought by the current from-concentrate juice. Also, the management, establishing an developing of a new product line is annual growth rate between five and ready for 2016, the “Single Strength” ten percent. purée; and other introduction will be the single-variety apple juices,


this means every package will contain juice from only one kind of apple, starting with the “Granny Smith” and “Pink Lady” varieties.

Company Information NAME

San Clemente Foods

“We want to spread the word on our flexible production capacity, as a Chilean business delivering ‘tailor-made’ goods on time,” the CEO summarized.


Fruit production, processing, packaging and exports as commodity, juice from concentrate and NFC, and fruit purée HEADQUARTERS

Santiago, Chile FOUNDED

1997, parent company in 1983 EMPLOYEES


US $25 million WEBSITE

Quality control 65

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