Lab, Innovation and Core Business: the 3 stages of marketing according to David Garbous (Fleury Michon)
Appointed Director of Strategic Marketing at Fleury Michon in 2013, David Garbous's role is central to the overall transformation of the company. David Garbous started his career with the Danone group in 1996, then advanced rapidly at Lesieur from 2005 to 2013, where he became Marketing Director in 2009. He is, therefore, an expert in the food industry and we have interviewed him on all the aspects of his profession.
What are the challenges in your industry today?
David Garbous: We are living through a terrifying and exciting period, where we must radically change models that have been in place for 50 years.
We have a huge collective responsibility - that of inventing a new model.
Vital challenges for the company:
In this reinvention, citizens are finally ahead of business. Confronted with the food scandals of the last ten years, they are questioning their previous confidence the actors of the food industry and are asking themselves if, today, professionals have become the problem rather than the solution. But, we all need to eat three times a day and we cannot do so defiantly, with a feeling of being in danger; we need to act.
There are hundreds of initiatives centred on food issues, which stem from proximity entrepreneurship and individual commitment. This movement is very positive, but is it not enough to make a quick impact on the overall system. Industrial companies, like ours, have the ability to accelerate the movement by changing the industry, and giving employees the opportunity to tackle problems. An extraordinary change is taking place with us, which is having an impact and will continue to have an impact on the evolution of our products
What is your transformation strategy for dealing with this revolution?
DG: It must happen at all levels of the company and, certainly, with the idea of an ecosystem in mind, because we can't do anything without agriculture, without distribution, without consumers, and without civil society. We have been an independent family business for 5 generations and we have a long term goal. Beyond our products, what is our utility, what justifies us still being here in 20 years faced with the challenges that lie before us? It appeared to us that beyond our current specialties (cured meats, ready meals, and crab sticks), our company's mission was to help people eat better every day.
We asked out collaborators to evaluate our company in terms of our mission of eating better: what did they think personally, what initiatives seemed interesting to them, and what actions could we take? Brilliant ideas came back to use from people who are rarely consulted. This helped us draft a "blue book" summarising the action areas to be addressed with our stakeholders.
Based on this, the Executive Committee set out strategic objectives to be reached within 5 years: in 2022 we want to achieve 20 % of our sales revenue on organic and 20 % on plant-based products. It is a challenge led by the Strategic Orientation Committee, which is concerned with marketing, retail, research and development, and supply chain.
To address these issues, we also revised the marketing organisation, which was previously structured by market. We opted for an organisation based on time periods: core business (operational transformation), innovation (in 2 years), and the Lab (5 years)
The temporal marketing organisation:
How can you reinvent your relationship with the consumer?
DG: Culturally, Fleury Michon has a strong product culture and has been less focused on the brand or on its corporate discourse. Putting into practice the promise to "help people eat better every day" helped us identify various contact points with consumers. We don't have a global CSR message, as was popular in the 1990's, we always start with product insight to construct our promise.
An iconic example is crab sticks: since 2013 a lot of work has been done on the recipe (removal of sorbitol, glutamates, and polyphosphates) and sourcing (responsible fishing), which involved a significant increase in costs. Although neither the packaging nor the communication reflected this. It was then that the horse meat scandal broke out. Just after consumer questioning about our lasagnes, came another question: "And what do your crab sticks contain?" ». So, we chose to tell them: Don't take our word for it, come and see for yourself, and we implemented the "come and see" programme, where we proposed that people follow the supply chain backwards from their supermarket to the factories and the raw material in Alaska.
What we learned from this experience:
AToday, digital has changed how consumers think: the louder the message and the more it is repeated, the more people start to ask if it is fake news.
Are brands now compelled transparent, no matter what?
DG: In marketing, we perhaps underestimated for too long the speed at which consumers had evolved in terms of maturity. Today's consumers approach the brand with a personal background, content and interesting questions, and we need to interact with them. At Fleury Michon, we created a digital cell in 2013. At the time 8 websites co-existed, created to enhance event operations, a Facebook page, a Twitter feed with a handful of subscribers, and very little content. In conversations about the brand, Fleury Michon was not present. User content presented entrenched, not necessarily very positive, opinions. We needed to recreate a conversation.
How to establish and manage consumer interaction:
Today's consumers are ten times better informed than they were ten years ago, they have formed the habit of doing their own research
In the end, I think we will have succeeded when we no longer need this digital cell, when the whole company will have taken the subject on board in a decentralised way. The 6 collaborators of our dedicated structure, "The Hub", concentrate on sharing interactions and generated content internally. It is important to be in contact with the daily flow of comments (positive and negative) that impact the company. For example, we propose that all our collaborators come and spend two days at the "Hub" to reply directly to consumers, which allows everyone to question their profession.
How do you work with startups?
DG: 4 years ago we started a programme on food issues with Ulule, the French crowdfunding leader. Called "come and innovate", it allows skill sourcing on two axes: better production and better distribution. We carried out a call for projects, then 1-for-1 funding using public contributions. We also financed a dozen projects per year over 3 years and, each year, offered the top 3 a communication plan.
This gave us two things: on one hand, it brought us a population that hadn't necessarily thought about Fleury Michon for self development, and, on the other hand, internal mobilisation with the formation of a multi-disciplinary team to monitor the project. We put in place a system of cross-coaching: each startup was mentored by a team member. These initiatives being at the early stage of implementation, we expect results in two years.
What is your vision of the future of retail and what are the consequences for Fleury Michon?
DG: Retail is confronted by exactly the same questions as we are. In the food industry, in urban centres there is disaffection with supermarkets: in your lunch break, you find the same triangular sandwich you've been eating for years. Close by, more expensive, but more qualitative options, like Prêt à Manger, Exki or Cojean are leading the way. In the same vein, in a large supermarket that offers over 100,000 references, choosing the product that meets the criteria of eating better is a marathon.
To offer an alternative, we set up a "sale with service" team of around ten people, responsible for coming up with an offer adapted to the reality of urban life under the brand "Par ici"; fresh and high quality starters, main courses and desserts, available at the store entrance, cheaper than the new competition. It should be noted that chains have problems finding suppliers for this type of offer.
The necessary transformation of the large supermarket model:
Structurally, we will see more and more offers in urban milieu, which will translate into even greater proximity. During testing of "Par ici", we noted great consistency in the choice of lunch points.
What is your ambition regarding this new snacking segment?
DG: We haven't set objectives in terms of percentage of sales revenue. But, regarding the healthy snacking niche, we would like to make this "fast good" as readily available as fast food! We have opened a new segment selling jars of salad, and we have acquired a stake in Jargus, a new distribution concept (see box), but we would also like to install our new products on the traditional circuit.
Our ambition is to install "fast good" everywhere fast food is available.
What role does the digital customer play in your strategy and how can you level out the indirect character of your relationship?
In contrast to the pure players of the sector, we effectively have a black hole between all that we are capable of activating upstream in digital and the transformation of the physical store. There is still reticence on the part of chains to share a certain amount of customer data, and panellists who still haven't made the connection. But, I think that will change. Technically, we have all the elements necessary for monitoring, pre-behavioural indicators until purchase and re-purchase, but the alignment is not yet there. We really need to shift models. Whoever is capable of proposing this will win the market!
The theme of the next HUBFORM is confidence. "No trust, no business", how does this maxim apply to your business?
David Garbous's response:
The new skill is probably learning to abandon one's own mastery and reconnecting with other actors on the value chain.
About Fleury Michon:
• Founded in 1905 by Félix Fleury and Lucien Michon
• Sales revenue in 2017: €717 M
• Operational result: €11.5 M
• 3,700 staff
Innovation, recent announcements:
• Vallegrain development: creation of company 50/50 with Vallegrain SAS (high quality organic pig farming chain)
• Good Morning: acquisition of 100 % of this Paris breakfast delivery service market leader (reinforcement of the Room Saveurs offer in B to B)
• SGI: acquisition of 60 % of this company by PFI (Italian group joint venture). (Delicatessen product range, such as antipasti)
• Jargus: 50 % stake in this company created by a former employee (environmentally responsible eat-in or take-away restaurant concept).
• Paso: 100% acquisition of this snack and aperitif specialist