• Strategy
  • CFO Europe Magazine

Food Fighters

American restaurant chains have reigned, but some European innovators are gaining ground.

In Europe, however, structural issues have tended to stymie innovation. Backman of Horizons says that the pace of consolidation is accelerating for both the two main categories — those that try to emulate the big US brands and the multi-brand operators. But, if anything, this is holding back development. For example, Europe’s largest “me too” burger chain, the Franco-Belgian Quick chain, brought in former Groupe Flo chief Jean-Paul Brayer as a fixer in 2002. Last year, Quick was bought for €730m by French state-owned lender CDC’s private equity arm, but it’s not yet clear whether the new owners will pursue Quick’s expansion in markets such as North Africa, or change direction.

In Greece, the dominant American-style burger chain, Goody’s (see “Local Hero” at the end of this article), was bought in 2000 by Greek food conglomerate Vivartia, which in September was taken over by Marfin, a financial conglomerate. A spokesman for Vivartia said plans to further expand Goody’s into neighbouring countries, such as Bulgaria, are on hold until after the transition, which included the departure of the CFO and other top managers.

Meanwhile, €4 billion Autogrill of Italy dominates the travel-concession business in Europe, with a 53% market share, according to Horizons. (“But not because it has a good product,” Backman reckons.) Among its brands are little known Ciao, Coté France, Spizzico, Acafé, as well as franchises for Burger King, Pizza Hut and others located at airports, railway stations and other travel hubs. Nonetheless, Autogrill’s performance has picked up since the arrival of CFO Alberto de Vecchi in 2006 (see “Quelle Qualité” at the end of this article), as acquisitions accelerated, including a move into in-flight food, a mostly unbranded market de Vecchi says is worth €7 billion.

But those referencing McDonald’s might note its attitude shift on brand diversification. As Buckley points out, “We do not have a portfolio approach. McDonald’s has had a minority stake in Pret-a-Manger [a UK sandwich chain] for many years. However, we have eliminated other brands over the past two years — Chipotle and Boston Market. We strongly believe the best way to generate value for shareholders is by focusing on our core McDonald’s business.”

It’s that ruthless focus that has seen McDonald’s relentless rise, even in the face of anti-globalisation protests, even amid Europe’s growing “slow food” movement and even in France, home of the elegant brasserie.

Laura Cameron is an intern and Tony McAuley is deputy editor at CFO Europe.



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