Campofrío Alimentación S.A
Campofrío Alimentación S.A
Avenida de Europa, 24
Parque Empresarial La Moraleja
Telephone: +34 91 484 2700
Fax: +34 91 661 5345
Web site: http://www.campofrio.es
Sales: EUR 1.42 billion ($1.4 billion) (2002)
Stock Exchanges: Madrid
Ticker Symbol: CPF
NAIC: 311612 Meat Processed from Carcasses; 311611 Animal (Except Poultry) Slaughtering; 424470 Meat and Meat Product Merchant Wholesalers
Having long dominated its domestic market, Spain's Campofrío Alimentación S.A has set out to become one of the leading cured and processed meat companies in Europe. Campofrío produces a full range of deli meat products, including the Spanish ham favorite Serrano, as well as chorizo sausages, salami, and other cold cuts. The company also produces fresh and prepared foods for the restaurant and catering circuit. In addition to its own brand name, Campofrío has amassed a strong collection of brands, including longtime Spanish market rivals Oscar Mayer and Navidul Revilla; France's Montagne Noire; Poland's Morliny; and Russia's Kampomoc. Spain remains the company's primary market, at more than 68 percent of its sales of EUR 1.4 billion in 2002. Between its own brands and its private label production, Campofrío holds more than 20 percent of the Spanish cured and deli meats market. In addition, Campofrío has long pursued international growth, and has built up market leadership in Poland and France, and strong positions in Russia and Romania, with its sales and distribution network stretching throughout most of western and eastern Europe. The European Union countries accounted for nearly 11.5 percent of sales in 2002. Campofrío also operates internationally, balancing its 14 production plants in Spain with 12 plants in its European markets, including six in France. Hormel Foods of the United States holds a 21 percent stake in Campofrío; the founding Ballvé family, including CEO and Chairman Pedro Ballvé, hold 45 percent of the company, which is listed on the Madrid stock exchange's Mercado Continuo.
Slaughtering Origins in the 1950s
Campofrío Alimentación had its origins in the early 1950s, when José Luis Ballvé started a slaughtering business in the Spanish town of Burgos in 1952. By the end of the decade, however, Ballvé had begun to branch out, and in 1960 launched his own line of cured and processed meat products. Those products later became the company's specialty. Joining Ballvé in the family business was son Pedro José, born in 1954, who became president in 1978.
By then, the death of Francisco Franco and the opening of the Spanish economy presented new growth opportunities for the company. In 1978, Campofrío opened its capital to the United States' Beatrice Foods, which acquired a 50 percent stake in the small Spanish company. In exchange, however, Campofrío gained access to Beatrice Foods' technological superiority, as well as modern management, and organizational and marketing techniques.
Campofrío's partnership with Beatrice Foods enabled the company to rise quickly in the Spanish market, and by the end of the decade, the company had already gained a leading position in the domestic cured meats market. The death of José Luis Ballvé in 1985 spelled the beginning of a new era for the company. Now under the leadership of Pedro Ballvé, Campofrío sought to expand on its own, and began negotiations to regain the shares in the company held by Beatrice Foods.
That process was given a jump-start after Beatrice Foods was bought up in a leveraged buyout in 1987. That company's new owners soon reached an agreement to sell its 50 percent stake in Campofrío for $90 million. Ballvé regained control of Campofrío, backed by Banco Centrale, which took over 40 percent of Beatrice Food's former stake. A year later, Campofrío went public, listing 10 percent of its shares on the Madrid stock exchange.
International Expansion in the 1990s
The younger Ballvé quickly showed his own entrepreneurial spirit and launched Campofrío on a new expansion phase. By the beginning of the 1990s Ballvé had succeeded in doubling the company's sales, which topped the equivalent of EUR 500 million in 1991, since taking over the reins from his father.
With market leadership assured at home, Ballvé turned his attention to building Campofrío into a global operation. Campofrío naturally turned to neighboring markets, opening its first foreign subsidiary for marketing and distributing its products in France in 1990. The following year, Campofrío moved into Portugal, launching a distribution subsidiary for that market.
Yet Ballvé had already spotted a new opportunity farther abroad. The collapse of the Soviet government promised a new and vast market for the company's meat products. In 1990, Campofrío became one of the first foreign companies to invest in Russia, setting up its first plant there. A year later, Campofrío formed a joint venture, CampoMos, with Moscow-based Mosmia Soprom, which had been given the beef supply contract supporting McDonald's Corporation's entry into Russia. Campofrío's own early entry into Russia—where processed foods had remained a scarcity throughout the Soviet era—enabled it to capture a leading share in the newly opened market. As Ballvé himself proudly told International Management: "Everyone knows our brand name in Moscow, like McDonald's."
Indeed, the company's Russian operations were to provide the motor for much of the profit and sales growth through the 1990s, and by the second half of the decade accounted for the largest part of the group's profits. Building on its success in Russia, the company established a second plant in Moscow in 1994. Initially, Campofrío's share of the CampoMos joint venture stood at 50 percent. By the end of the 1990s, however, Campofrío had increased its stake to more than 91 percent.
In the meantime, Campofrío continued its international expansion. In 1991, the company journeyed to the Philippines, forming the 50–50 Campocarne joint venture in that country with San Miguel Corporation. The company then eyed expansion into the Latin American market, forming CampoAustral SA in Argentina. Campofrío's initial stake in that joint venture stood at just 25 percent, but was boosted to 40 percent by the end of the decade. The company then extended its South American operations with the opening of plants in the Dominican Republic and Bolivia.
Consolidating Leadership for the New Century
By 1996, Campofrío's sales had neared the equivalent of EUR 650 million. At the end of the year, the company found a new strategic partner in the United States' Hormel Foods Corp., then undergoing its own international expansion effort. In December 1996, Hormel acquired 21 percent of Campofrío from Banco Centrale. The move gave Campofrío access to the U.S. market as well as Hormel's marketing and technological expertise.
The economic crisis that swept through Russia in 1998 provided a new opportunity for Campofrío to step up its market share, which had already reached 20 percent in that country. At the same time, Campofrío began plans for expanding elsewhere in the Eastern European region. In April 1998, the company acquired nearly 80 percent of Romania's Tabco, then, at the end of the year, reached an agreement to acquire the controlling stake in Polish cured meats market leader Morliny SA.
Closer to home, the company began construction on a new production facility in Burgos that year. The following year, the company added production facilities in France through its acquisition of Gayraud Montagne Pyrénées, and its Montagne Noire brand. Campofrío also strengthened its operations in Portugal through its purchase of Fricarnes, the top brand in that country. Campofrío also attempted a diversification into pâtés and other prepared delicatessen items through its acquisition of Spanish group Delicass.
Yet Campofrío had already embarked on a drive to consolidate the Spanish cured meats sector and solidify its position as a domestic and European leader. In 1999, the company acquired Andalusia based Molina, then under liquidation proceedings, as part of the basis of a new subsidiary, Campocarne Andalusia.
In 2000, the United States' Sara Lee had been preparing an entry into the Spanish market, negotiating to acquire both of Campofrío's main rivals, Omsa, the Spanish Oscar Mayer branch, and Navidul. Yet Ballvé out-maneuvered the American food giant, and in May 2000 acquired 87 percent of Omsa for EUR 77 million. One month later, Ballvé completed its one-man consolidation of the Spanish cured meats sector when he reached an agreement to merge Campofrío with Navidul, in a deal worth some EUR 300 million.
The completion of the two acquisitions transformed Campofrío into one of Europe's largest cured meats companies. The purchases of Navidul and Omsa also shut out Sara Lee in its hopes to take market share from Campofrío on its home turf. At the end of 2002, Campofrío renamed its Campocarne subsidiary as Primayor, in order to integrate its newly acquired operations, as well as its fresh foods products. The company also decided to exit the pâtés market that year, selling off its Delicass subsidiary.
Campofrío is a customer-focused international foods and nutrition group with investments in three continents and manufacturing plants in 11 nations, reaching over 250 million consumers in over 40 countries worldwide. Campofrío is a company with a clearly global mission, growing both in size and quality, and equipped with the most up-to-date technology. Campofrío has created a solid business platform in the most important world markets, both in strong, consolidated economies and rapidly developing nations. Campofrío has adopted the Healthy Living philosophy as a lifestyle reflecting the key aspects of the Group: a continual search for healthy products providing maximum consumer satisfaction and ensuring an improvement in their quality of life. The Group pursues its business with this twin focus on health and food so that all of our activities always strive to strike a balance between the pleasure of eating well and the pleasure of eating healthy.
Campofrío's new dominance of the European market encouraged the company to focus its future expansion efforts in Western and Eastern Europe, and in 2001, the company announced its intention to sell off its South American holdings. At the same time, Campofrío sold its share of the Philippines joint venture to partner San Miguel.
By the end of 2003, Campofrío had completed its reorganization as a pan-European meat products company. The company's revenues now topped EUR 1.4 billion, and the company had succeeded in paying down much of the debt generated through the Omsa and Navidul acquisitions. Campofrío appeared in strong position to continue its international expansion into the new century.
- José Luis Ballvé founds Campofrío Alimentaciónin Burgos, Spain, as a slaughterhouse.
- Campofrío begins producing cured and processed meats.
- Ballvé sells 50 percent of company to Beatrice Foods International.
- Pedro Ballvé takes over company after his father's death.
- Ballvé regains control of Campofrío from Beatrice Foods.
- Campofrío goes public on Madrid stock exchange.
- Campofrío begins international expansion with subsidiary in France and opening of a plant in Moscow.
- Campofrío forms CampoMoc joint venture with Mosmia Soprom in Russia; launches subsidiary in Portugal; forms joint venture in the Philippines with San Miguel Corporation.
- Company enters Argentina through CampoAustral joint venture.
- Hormel acquires 21 percent of Campofrío.
- Company acquires Tabco in Romania and Morliny in Poland.
- Company acquires Montagne Noire brand in France; acquires Delicass to enter pâtés and prepared delicatessen foods sector (sold in 2002).
- Campofrío acquires majority of Omsa and merges with Navidul to solidify Spanish market leadership.
- Campofrío announces exit of Latin American and Asian markets to focus on European growth.
- Campofrío creates Primayor to take over former Campocarne subsidiary and integrate Omsa and Navidul operations.
- Company prepares to continue European expansion through acquisitions.
814 Americas INC (U.S.A.); Agrocarne S.A (Dominican Republic; 49%); Campoaustral S.A (Argentina; 40%); Campofrío Alimentación S.A.; Campofrío Montagne Noire S.A (France; 63%); CampoMos (Russia; 91%); Fricarnes S.A (Portugal; 80%); Morliny S.A (Poland; 98%); Navidul Extremadura S.A.; Omsa (80%); Primayor Alimentación Andalucía S.A.; Primayor Alimentación S.L.; Tabco Campofrío (Romania; 95%).
Ebro Puleva S.A.; Cooperativas Orensanas SCL; Corporacion Alimentaria Guissona; McDonald's Sistemas de Espana Inc.; Viscofan SA, Industria Navarra de Envolturas Celulosicas; Elpozo Alimentación S.A.; Casa Tarradellas S.A.; Grupo Navidul S.A.
"Campofrío Considers International Expansion," Expansion, August 23, 2003, p. 7.
Chapman, Peter, "All the King's Men," International Management, June 1992, p. 50.
"Grupo Campofrío Becomes Leader in Polish Meat Sector," Expansion, November 19, 1998, p. 12.
"Pedro Ballvé, Président de Campofrío: Etre global est la seule voie de survie," Actualités, September 29, 2000.
"Spanish Meat Group Campofrío Alimentación Has Reported Satisfactory Results for 2002," Food Engineering & Ingredients, April 2003, p. 5.
White, David, "Campofrío in Merger Plan with Navidul," Financial Times, June 3, 2000, p. 8.
—M. L. Cohen