We couldn’t miss the opportunity to interview Agustín Gregori, CEO of the company for the production and distribution of nuts and snacks Grefusa, which has been at the helm of the family company since 2000, without proposing a new line of business:
– “We just came up with a new appetizer. People mix fries with other appetizers like mussels and anchovies. Here’s the idea: a pack with two compartments, on one side the potatoes and on the other the anchovies. We want 10% of sales!”
– “We have been working on the same line for some time, just with different products. In fact, combinations are what works best for us in the appetizer space. The problem with this idea is that it’s difficult to sell ham and cheese from one brand of chips when you want to offer chips with cheese and ham cubes. Maybe it’s easier with a brand of ham or cheese.”
Innovate even in the tubes. Our commercial misses its target. It is clear that innovation is the only way to grow in this sector, but also that you cannot innovate in any way. “Companies still have a technological vision. They don’t side with the consumer. And therein lie all business opportunities. Manufacturers innovate from a technological rather than a consumer perspective. And what you need to do to get it right is ask the customer directly. So you can even innovate in the tubes.”
So says the CEO of a Valencian company that has invested 12 years and five million euros to get the perfect potato (so far imported from Belgium). When you consider that the potato chips market in Spain bills 610 million annually and accounts for 34.8% of the nuts and snacks market – for Grefusa it accounts for 30% of its sales – it pays to innovate.
In the street. When it comes down to it, Gregori insists that getting a product right isn’t easy. “We end up studying consumers so much that we end up not believing the results of market research and focus groups. Before launching a product, analyze the age you are aiming it at, the formats, the level of taste that it must have, the purchase intention, the ideal price … and we forget that there is nothing more beautiful, than looking at a product in the consumer’s face,” explains Gregori. So much so that the directors of Grefusa have to spend at least one day a year in a kiosk… Selling.” “From time to time we get consumers to learn more about our products and also about their lives: what they like, what they do in their free time, how they live or what music they listen to”. However, this information is worth nothing without the commercial immersion of managers and without contact with distributors and retailers. There goes an example. “We launched light lemon-flavored potatoes… and chose a flat-bottom pouch. They weren’t sold. We spoke to retailers and they told us, ‘But how is it going to sell when it’s dripping with oil! If we hadn’t been listening…” he recalls (now) relieved.
Former copycats. But before they embrace the “religion” of innovation, they admit they’ve copied. “With appetizers, pretty much everyone copies what FritoLay does [PepsiCo] at a lower price. We had a period of uncertainty when we also plagiarized. When they started heavy promotions, all our products that were copies of them stopped working. Meanwhile, the others where we were innovating, like Gublins or PapaDelta, grew despite the pressure. From there we decided we weren’t going to copy anyone. You can’t compete on price.” Agustín Gregori is convinced that the fact that they’ve tried five times since then to “seduce” him, checkbook in hand, proves him right.
Sell alone. Innovation is a warfront, but the bloodiest battle is actually fought in distribution. “It’s sold in many places, from a distribution chain to a hotel minibar, through kiosks, boats… Our strength remains the traditional disorganized distribution, the impulse channel,” he continues. This channel accounts for 70% of its sales; the food channel 20% and the hotel industry the remaining 10%.
“When we started producing snacks, we saw that the multinationals were moving by market share and that the impulse channel was not being monitored. We decided to go in there to be invisible. In 1994 we already had a turnover of 24 million euros and our market share was … zero! That’s when the competition noticed that we existed, but it was too late.” “Because we were the first to enter this channel, that’s where we’re strongest. There we sell and control the product directly. It’s harder for us to reach them on other channels,” he says.
And ham-crusted breadsticks? Or potatoes with a hole in the middle?