The success of Bahlsen in France

1. The success ofBahlsen in France Best in France Case Study December 2005 By: Ms. Gounou Ehssane & Ms. Grassl Stephanie

2. I. History & Business II. Products & Clients III. Coming to France IV. Company values & French culture V. Constraints in France VI. Adaptation to France VII. Key success factors VIII. Recommendations Executive Overview

3. I. History & Business

4. History • 1889:Hermann Bahlsen starts his own ‘biscuiterie’ in Germany  Creation of new products & umbrella brands • 1960:First sales offices in France & Italy • 1994:Merger with ‘biscuits St Michel’ • Bahlsen St Michel SAS • Two family companies • Through this acquisition the mother company Bahlsen extends its portfolio

5. Bahlsen St Michel 2005 • Part of the group Bahlsen Germany • 3700 employees • 542 million euros of sales • Exports to more than 80 countries • Presence in Europe, North America & Asia • Bahlsen St Michel France: • 124 million euros of sales • 476 employees  France is an important location (second headquarter)

6. France • Headquarter: Rueil Malmaison • St Michel: Production of St Michel cookies • Commercy: Production of patisserie

7. II. Products & Clients

8. Products Distinction between brand St Michel and Bahlsen Bahlsen Produced elsewhere St Michel Produced in France

9. Products • Product lines are hardly being discontinued • innovated all the time in order to exploit the product lines to maximum level. • Innovation: • Remarkable • Variation of tastes and forms • Adapt to new tastes of the consumers • Innovation product Bahlsen  Done in Europe France has little influence on them • Innovation of brand St Michel  Done in France

10. Location choice • Reason for location choice: • Resources • Capacity • Cost • But for the Brand St Michel the location choice was • different: • More historical than strategically • St Michel is a ‘specialité Française’ • In France maximum production capacity • has been reached!

11. Bahlsen in Europe

12. Clients • Distribution channels • There are two circuits: • GMS (grandes et moyennes surfaces) 80% • CHD (consommation hors domicile) 20% • Products sold in all big supermarkets  good reference • French customers know • 97% St Michel • 91% Bahlsen • Brands are perceived independent • Big change to transform St Michel into Bahlsen • But must that be the task?

13. Positioning • Publicity more for Bahlsen then for St Michel 2 brands in one company • 2 different marketing departments • 2 different directors • 2 different teams • Positioning of products is different, because : • Different segments • Different price & consummation pattern • Different image

14. St Michel Traditional (100 years) Already loyal consumers Family product ‘Specialité Française’ Bahlsen Modern Innovative Younger people Differences

15. French presence is important in order to get closer to the consumers !

16. III. Coming to France

17. Why coming to France • Bahlsen already exported to 74 countries in 1956 • They wanted to open up the French market • 1960  Bahlsen in France • No fast penetration of the market • 1994  Acquisition of St Michel • Complementarity:  Products ‘sucrés et salés’  Direct contact with customer

18. With the sales realised in France, it is profitable to be in France costs are relatively low

19. IV. Company values & French culture

20. Company values I • No real problems when Bahlsen came to France concerning the cultural values BUT • Problems occurred when buying St.Michel.  St.Michel had to change its point of view: - Former company with small structure • Family business • Reporting • Acceptance of being in a big company • Not only decision maker • Less autonomy

21. Company values II • The key values are: • Quality • Informing the consumer • Health issues • Regular quality controls • Bahlsen succeeded because: • Business structure & culture • “Informal behavior” • Exchanges in R&D • This lead to an approach of the companies • but the transition took time • New ways of communication with headquarter

22. V. Constraints in France • Not as many differences between Germany and France legal or fiscal  EU • Production cost • Only RH costs which may concern in the future • Differences concerning French labor law - 35 hour work - long-term constraints of firing personnel

23. VI. Adaptations undertaken • No dramatic changes undertaken • European ‘culture’ • Having to report • French working culture • International orientation: • No international recruiting (depends more on the individual profile) • Bahlsen France is more « French » • Former international trainee programs but too costly  now there is only the reporting and the product exchange

24. Adaptations undertaken • No much integration of French managers in the international organization. • Not many exchanges in the management: it depends on the department, for ex. many engineers exchanges Key constraint costs: • Higher RH costs • No real communication constraints

25. VII. Key Success Factors • High quality of products due to many standards: • Strict selection of ingredients  Instead: natural, healthy ingredients for products • Then there is the European regulations: certification IFS (international food standard) and ISO • Innovation • Big stabile market with stable and high sales • Central location in France • The high quality of life • The “savoir-faire“ & the tradition • Qualified labor market • Political stability

26. VII. Key Success factors • Informal culture ( Mr. Bahlsen) • Reporting  you feel protected because you belong to a big group However: • Future investments in Europe are not sure  but at least feeling that Bahlsen is attached to its employees

27. VIII. Recommendations Before coming to France: • Having right portfolio of products for that country • Being close to your customers • Good reference • EU • Motivation • Analyse before implementing Adaptions while in France • Keep the spirit of ‘family company’ • Innovation of products • Quality  ‘savoir-faire’

28. VIII. Recommendations • Choose right distribution channels  negotiation power • Acknowledge differences between certain brands and position them differently • Do not want to copy Bahslen Germany in France • Keep your own identity • Do not impose too much from the headquarters • Look at the needs of local customers Future Investments • Economies of scale • Exchange in skills • Be careful with employees when making tough decisions

29. Do not be afraid of differences

30. We Thank • Valerie Sajot, Human Ressources Development 22-24, rue Victorien Sardou 92563 Rueil-Malmaison Telephone: 01 56 84 85 05 Valerie.sajot@bahlsen.com • Melanie Andre Human Ressources 22-24, rue Victorien Sardou 92563 Rueil-Malmaison Telephone: 01 56 84 85 15 Melanie.andre@bahlsen.com

31. Bibliography • www.bahlsen.com • www.bahlsen.fr • Presentation Bahlsen France • The Global Challenge; Evans, Pucik, Barsouk • Questionnairy Best in France

32. Our Team • Gounou Ehssane - Current address: K038, 1, rue de la Libération 78351 Jouy-en-Josas, France - Permanent address: Verdistraat 256, 5343VM Oss, The Netherlands • Grassl Stephanie - Current address: K040, 1, rue de la Libération 78351 Jouy-en-Josas, France - Permanent address: Esterbergstr.39, 81377 München, Germany