13 Chemin des Pres Secs, Zone Industrielle
Company Perspectives:
Toupargel Agrigel is a specialist in the home delivery of quality foo d products to individuals, with two main businesses: Frozen Foods, wh ich account for 96% of its sales, and Fresh Foods and Groceries. Our company business model distinguishes us from traditional distribu tion: telesales followed by delivery within 48 to 72 hours, after sem i-automated preparation of sales orders at dedicated logistical platf orms. This sales approach was created and perfected by the Group's Fr ozen Foods business, and now has been duplicated at the Group's Fresh Foods and Groceries business.
Toupargel-Agrigel S.A. is the leading provider of home delivery groce ry services in France. Originally specializing in the delivery of fro zen foods, which continues to account for more than 90 percent of gro up sales, Toupargel-Agrigel has expanded to include the delivery of f resh food and groceries as well. The company's frozen food operations are carried out under the Toupargel and Agrigel brand names. The com pany expects to integrate its two brands (Agrigel was acquired in 200 3) under a single brand by 2007. Together, the two brands control 34 percent of France's frozen foods home delivery market, and more than 6 percent of the total frozen foods market. Toupargel-Agrigel's fresh foods and groceries operations brand, Place du Marché, was cr eated in 2000. Led by Roland Tchenio, Toupargel-Agrigel has developed a proactive sales system. The company places calls to each of its mo re than 1.4 million customers up to 14 times per year in order to tak e their order; the company also operates an e-commerce web site. Orde rs are then delivered to customers within 48 hours. Customer support is handled through 35 call centers around France, as well as its own freezing and cold storage facilities, logistics platforms, and fleet of refrigerated vehicles. Toupargel-Agrigel is listed on the Euronext Paris Stock Exchange's Secondary Market. Roland Tchenio, the driving force behind the group's growth since 1982, is also its majority sha reholder, with 56 percent of company shares.
New Home Delivery Model in the 1980s
Roland Tchenio completed his studies at France's elite HEC business s chool before earning an MBA at Harvard. Returning to France at the be ginning of the 1970s, Tchenio worked first for French conglomerate Sc hlumberger before joining rival group Chargeurs in 1977. Tchenio deve loped a specialty in turning around struggling companies, with an emp hasis on the retail sector. As Tchenio told Tremplins: "I've a lways worked in the distribution sector. My strength? A developer's p rofile. I'm able to take a concept, an idea, and understand how a com pany will be able to evolve."
Yet, as part of these rapidly growing conglomerates, Tchenio barely h ad the opportunity to enjoy the fruits of his success before moving o n to the next acquisition. In 1982, therefore, Tchenio decided to set out in business on his own. Instead of founding his own company, Tch enio decided to put his career expertise to work, and favor the devel oper's role over that of entrepreneur.
Tchenio's target fell on Toupargel, a small company based in Civrieux d'Azergues. Founded in 1947, Toupargel originally specialized in the production of frozen vegetables and other foods. In 1969, Toupargel decided to enter the retail market, and began selling its products di rectly to consumers. The company's model mirrored that of the home gr ocery delivery market in France, using a small fleet of trucks outfit ted as small grocery stores. These trucks served primarily a rural po pulation; indeed, into the 1970s, the presence of freezers in French households remained limited in large part to the country's agricultur al population. The appearance of large-scale supermarkets, and later hypermarkets, launched a shift in consumer grocery shopping habits in much of France. Nonetheless, the country's growing retail giants foc used especially on larger urban markets. France's rural region, while accounting for a significant proportion of the country's population, remained underserved by the retail sector.
When Tchenio purchased Toupargel in 1982, it was a small but profitab le business, with 70 employees and six truck stores and annual sales of less than $10 million per year. Tchenio immediately set out to develop the business, using his experience in the integration of acq uisitions to expand the company. As he told Tremplins: "When I bought this company more than 20 years ago, I recognized immediately how I was going to develop it, notably by focusing on external expan sion with regional companies."
Tchenio launched Toupargel on a long series of acquisitions, buying u p many of the company's smaller rivals in the surrounding region, bef ore beginning to expand on a national scale. By the early 1990s, Toup argel had completed some 30 acquisitions. The company's external grow th effort continued through the 1990s, adding another ten companies i nto the next century.
From the start, however, Tchenio recognized the inefficiency of Toupa rgel's original model. The company's truck stores were too small to c arry the range of goods offered by the larger supermarkets, which had begun to dominate the French market in the 1980s. While the company' s existing clientele remained relatively loyal, developing new client s became more and more difficult. At the same time, sending out the c ompany's fleet of trucks with no firm orders had become an inefficien t use of the group's resources, especially following the oil crises o f the 1970s.
Tchenio sought a new way of doing business, telling Creascope: "We saw that the truck store market was in decline. We tried out a s ystem where the salesmen made house calls in order to take customers' orders, which were delivered afterward. We recognized that that wasn 't working."
The solution came through the company's acquisition drive, which, in addition to increasing the group's client base and fleet, also gave t he company the opportunity to explore different ways of approaching t he home delivery market. As Tchenio explained: "In 1983, I acquired a company in Annecy who only did business by mail order. In 1985, I ac quired a company in Poitiers that had used traveling salesmen but had decided to switch to telephone sales."
Tchenio decided to combine a catalog-based mail-order approach with u se of telephone-driven sales. In 1986, the company began investing in its new model, converting its truck fleet and installing a computer- based ordering system. "Once we had found this solution, we needed to develop specific tools," Tchenio told Creascope. Toupargel qu ickly took the telephone sales model to a new level. Rather than send out its catalog and wait for customers to call, the company adopted a proactive approach. In support of this, Toupargel established its o wn network of call centers, responsible for contacting customers at r egular, scheduled intervals--typically some 14 times per year--in ord er to take their orders. Customers were able to prepare their orders at their leisure, and know in advance when the Toupargel sales person nel were to call.
The conversion to this new sales model had the added benefit, for bot h Toupargel and its customers, of allowing the company to expand its range of products. "In the truck stores, we couldn't offer more than 200 items. Today, with the telephone, we have about 1,000," Tchenio t old Creascope. Meanwhile, the company's delivery schedule was adapted to the new model, allowing the company to make more efficient use of its fleet.
Home Delivery Leader in the 2000s
Toupargel grew rapidly through the end of the 1980s and into the 1990 s. By 1992, the company's sales had topped the equivalent of $50 million. By 1997, Toupargel's revenues had climbed past $85 milli on. In that year, the company went public, listing its stock on the P aris Stock Exchange's Secondary Market.
The public offering came in support of a change in the group's strate gic direction. By the late 1990s, the French frozen foods home delive ry market had more or less reached maturity, and future expansion of the market appeared less likely. A factor contributing to this was th e consolidation of the supermarket sector in general. Limits imposed on the expansion of the hypermarket format--with new store openings b ecoming severely restricted in the 1990s--forced the larger distribut ion groups to seek other means to continue their own expansion by dev eloping new store formats, including smaller shops targeting smaller and local population areas. A number of frozen food retail specialist s had grown as well, including the nationally operating Picard and Th riet chains, providing more direct competition for Toupargel. Meanwhi le, the promise of Internet shopping, although slow to develop, prese nted another threat to Toupargel's growth.
In response, Toupargel sought to expand its own base of operations aw ay from its focus on frozen foods and to adapt its successful telepho ne-based sales system for the fresh foods and groceries market. Once again, Toupargel turned toward external growth to accomplish its stra tegy. In 1998, the company made two key acquisitions, buying Né ;odis and Selecta. Both companies operated home delivery services in the northeast of France. After their acquisition, the two companies w ere merged into a single operation in 1999. Renamed as Place du March é ("Market Square"), the new operation was then converted to a telephone-based sales system. For this, Toupargel invested some EUR 16 million in the creation of a new, dedicated logistics center. Plac e du Marché also put into place its own call centers, based on the Toupargel model.
Place du Marché quickly added to its product offering, jumping from 500 items to more than 2,200 by the end of 2002. Yet converting the operation's existing client base proceeded less smoothly than ex pected. As a result, Toupargel was forced to backtrack a bit, returni ng to a truck-based store system for its existing clientele, while re taining the telephone-based system in order to convert these customer s in the future, and attract a new generation of customers. By the be ginning of 2003, Toupargel's sales had topped EUR 110 million.
While it continued to build up its fresh foods division, Toupargel so on found a new--and faster--approach to its expansion. In 2003, the c ompany agreed to buy up Frigedoc, a subsidiary of Cigesal-Miko, a par t of Unilever. Toupargel paid EUR 81 million for the acquisition, whi ch gave it control of Frigedoc's Agrigel brand, the French frozen foo ds home delivery leader. The addition of Agrigel forced Toupargel int o debt for the first time, yet the acquisition also tripled Toupargel in size, establishing it as the clear leader in its market.
The integration of Agrigel into Toupargel, which renamed itself as Ag rigel-Toupargel, went smoothly. The company dedicated most of 2004 to converting Agrigel, previously a truck store-based operation, to Tou pargel's telephone sales system. The convergence of the two operation s, especially the generation of operational synergies, continued thro ugh 2005. By the end of that year fully 95 percent of Agrigel's sales were generated through the telephone.
The integration process was expected to continue through 2006, at whi ch point Toupargel-Agrigel expected to convert its operations to a si ngle brand name. With annual sales of nearly EUR 360 million ($40 0 million), Toupargel-Agrigel had built up a solid position in the Fr ench home delivery market. Under Roland Tchenio, named one of Ernst & amp; Young's French Entrepreneurs of the Year for 2004, Toupargel-Agr igel appeared certain to maintain a prominent spot in the French reta il market.
Principal Subsidiaries: Agrigel S.A.; Place du Marché S .A.
Principal Competitors: Carrefour S.A.; Casino S.A.; Etablissem ents E. LeClerc S.A.; Picard S.A.; Thriet S.A.
Comment about this article, ask questions, or add new information about this topic: