Besnier SA History

Address:
10-20, rue Alolph Beck
53089 Laval Cedex 09
France

Telephone: 43 59 40 52
Fax: 43 59 42 61

Website:
Private Company
Incorporated: 1933
Employees: 12,000
Sales: FFr 24 billion (1993 est.)
SICs:: 2022 Cheese, Natural & Processed; 5143 Dairy Products, Except Dried or Canned; 2020 Dairy Products

Company History:

Besnier SA is France's largest dairy products producer and one of the largest dairy products producers in Europe. Besnier's primary business is in cheese making, selling its products under the company's renowned President label, but also under such brand names as Lepetit, Claudel, Lactel, Valmont, and Jean Jacques. The company also owns approximately two-thirds of famed Société des Caves et des Producteurs Reunis de Roquefort, the world's leading producer of Roquefort cheese. Best known for its brie and Camembert, Besnier produces more than 100 types of cheese, butter, and milk products. Besnier's products reach some 100 countries; the company operates some 60 plants in France and ten in foreign countries. Its U.S. operations are based in Belmont, Wisconsin, where the company produces President label Camembert, brie, and feta, and in Turlock, California, where the company produces brie, Gouda, Edam, and feta. A private company, Besnier is owned 100 percent by the Besnier family. Michel Besnier, son of the company's founder, continues to lead the family business.

Besnier's annual milk collection is more than five billion liters, primarily of cow's milk, but also includes 135 million liters of sheep's milk and 30 million liters of goat's milk per year. From this, Besnier produces one billion liters of milk, 127,000 tons of butter, 365,000 tons of cheese, and 215,000 tons of fresh dairy products, including cream and yogurt. Besnier last reported revenues of FFr 24 billion (US $4.5 billion) in 1993, of which approximately 25 percent came from foreign sales. Earnings for that year were reported at FFr 443 million. Since then, the company has continued its aggressive expansion-by-acquisition drive, started during the 1970s and stepped up in the 1980s, consolidating its position in France with the 1996 acquisition of Marcillat, a cheese with FFr 600 in sales, and expanding into Eastern Europe with the formation of a joint venture with Ukraine's Nikolaiev and the acquisition of 83 percent of Poland's Polser.

A Small Family Business into the 1960s

Besnier was founded as a single plant in Laval, in the Loire Valley region of France, by Andre Besnier, a former cooper by trade. In 1955, Andre's son, Michel, who had started with the family business as a delivery boy, took over the dairy company's operations. Besnier remained a small, single-plant operation until well into the 1960s. But after a flood destroyed the factory's entire dairy production in 1966, Michel Besnier became determined to protect the company from such calamities in the future by expanding its operations to multiple plants and diversifying the company's dairy products. As a first step, in 1968, Besnier created its own brand, the President label, which, in many parts of the world, would become synonymous with French cheese. The following year, the company opened a second plant, in Mayenne, adding to its cheese production capacity. By then, however, Michel Besnier was already preparing to take a new direction in an ambitious plan to build the family's business. In 1969, Besnier made the first of a long string of acquisitions, buying the cheese maker Bourdon, based in the Normandy region.

That first acquisition made Besnier hungry for more. In 1973, the company acquired a cheese making plant in Charchigné from Preval and followed that acquisition with the purchase of the Buquet cheese dairies. The following year, Besnier solidified its position in the Normandy region, the traditional center of Camembert cheese production, by forming the Société Laiterière de Normandie with rival Bridel. At the same time, the company expanded its own Camembert production with the acquisitions of Groupement Laitier du Perche and of Laiteries Prairies de l'Orne. One year later, Besnier expanded again, adding brie to its product line with the purchase of cheese producer Renault of Doué la Fontaine. Another takeover followed in 1976, when Besnier acquired Stenval Sud.

By 1978, Besnier was thriving; in that year, the company built a new, state-of-the-art production facility in Donfront. The capacity of the new plant, located on 18 acres in the heart of Normandy, was reported to be three times larger than that of the company's principal competitors of the time. With production levels reaching up to 400,000 units of Camembert per day, the Donfront factory was among the largest soft-cheese plants in the world. Meanwhile, the company's line was augmented with the Lepetit brand name. Then, in 1979, Besnier expanded its butter production unit, building a butter plant in Isigny le Buat.

Besnier started the next decade strongly. In 1980, the company acquired the cheese making group Atlalait and that group's six plants in the Loire and Deux-Sèvres, building on the company's position in western France. In that year, Besnier also moved into eastern France, with the takeover of the Jean Lincet cheese dairy. By then, foreign demand was building for Camembert and other French soft cheeses. In response, Besnier established a small plant in the United States, in Belmont, Wisconsin in 1981, which focused on supplying soft cheeses to the U.S. market. The company also began industrial production in Villalba, Spain in 1983.

By then, Besnier's sales had swelled to more than FFr 5 billion per year. The company's takeover drive continued, with the acquisition of Martin Collet in 1982, and the acquisition, between 1982 and 1985, of six cheeses from Claudel Roustand Galac. To fuel further expansion, however, Besnier set its sights on acquiring a larger cheese operation. When the Société de Collecte des Prodicteirs de Preval (SCPP) went bankrupt in 1982, Besnier purchased that group's 34 percent stake in the FFr 3 billion-per-year Preval dairy operation. Besnier claimed that its purchase also gave it the right to exercise an option to buy an additional 24 percent of Preval from majority stakeholder Union Laitière Normande (ULN). More than twice Besnier's size at the time, with annual turnover of some FFr 10 billion, the ULN denied Besnier's action to exercise the option. Despite threatening legal action, Besnier lost that takeover bid.

The Preval setback proved to be a rarity in Besnier's aggressive expansion. The company completed its acquisition of Claudel Roustand Galac in 1985. That group had been a subsidiary of Nestlé, of Switzerland; its acquisition by Besnier had given Nestlé a 20 percent share of Besnier. In 1987, however, Nestlé agreed to sell its stake back to Michel Besnier, once again giving him complete control over the family business. With the 1985 acquisition of the Picault dairy operations, based in Normandy, and the cheese dairy plant of Moreau, based in the Ardennes region, the Besnier family business was worth some FFr 8.8 billion by 1987. Profits were also soaring, jumping from FFr 60 million in 1986 to FFr 194 million in 1987. Exports had grown to represent more than 25 percent of the company's sales, with approximately 60 percent of export sales going to neighboring European countries. Besnier also boosted its U.S. presence in 1987 with the opening of a larger plant in Turlock, California, which enabled the company to add fresh milk products, including cream and yogurt, to the U.S. market.

Eyeing the European Union of the 1990s

By the late 1980s, Besnier had built the family business into a dairy empire of some 36 plants, processing more than two billion liters of milk per year into more than 400 products under the President, Lepetit, Claudel, Lactel, and other branded and private label names. Sales in 1988 had risen to FFr 9.7 billion, and profits had nearly doubled to FFr 378 million. Besnier's growth during the previous two decades had been impressive, but it proved to be just the beginning. By the early years of the 1990s, Besnier would more than double its sales.

With the creation of the European common market looming in 1992, Besnier moved to consolidate its position in France while simultaneously stepping up its expansion into foreign countries, the better to compete with the European dairy giants. The next phase of the company's expansion began in 1989. In that year Besnier made a number of smaller acquisitions, including that of Hugerot, of the Aube region of France, and the acquisition of the milk production operations of Valmont, a subsidiary of the Perrier group. The Valmont acquisition also helped confirm Michel Besnier's reputation for transforming the failing operations of some of its acquisitions into profitable additions to the Besnier group. Also in 1989, the company expanded into the Los Angeles market, with the acquisition of the small fresh dairy operation, Atlantis, while the company deepened its European presence with the purchase of Laiterie Ekabe, of Luxembourg, and the formation of a partnership to bring the company into the Catalonia region of Spain. Another partnership, with a Belgian dairy cooperative, led to the formation of SA Laiterie Walhorn Molkerel.

Besnier, however, reserved its biggest move for 1990. In that year, the company outmaneuvered its larger competitors, including Sodiaal, ULN, and Bongrain as well as a number of foreign competitors, to purchase the Bridel dairy company, another family business described as the patriarch of the French Camembert industry and Besnier's fiercest competitor. The purchase, for an estimated FFr 2 billion, catapulted Besnier to the top of the French dairy industry, giving the company total annual revenues of more than FFr 17 billion. The combined operations gave Besnier a large share of the French dairy market, with 16 percent of cheese products, 24 percent of milk, and 24 percent of the country's butter production. In January 1991, Besnier reinforced its position with the acquisition of another family-controlled cheese producer, Girod, based in Saint-Julien-en-Genevois, adding that company's FFr 240 million in sales. Three months later, Besnier outmaneuvered its competitors again, acquiring the Jean-Jacques fresh dairy operations and the rest of the Valmont dairy operations from the troubled Perrier group, which had been forced to recall all of its bottled water after the water had been found to contain traces of benzene. These purchases helped raise Besnier's turnover to some FFr 22 billion by the end of that year.

By October of 1992, Besnier caused a new stir in the French dairy industry. After Nestlé's takeover of Perrier in the beginning of 1992, the Swiss company announced its intentions of selling off another Perrier subsidiary, the renowned Caves de Roquefort, the leading maker (with 80 percent of world production) of the famous French blue cheese. Again, Besnier outran its competitors, paying Nestlé FFr 863 million for 57 percent of Caves de Roquefort. The remaining shares of the Roquefort operation continued to be controlled by French bank Crédit Agricole. To finance the Roquefort acquisition, Besnier set up a subsidiary unit, Société pour le Financement de l'Industrie Laitière (SOFIL), which increased its participation in Roquefort to 69.5 percent in 1993. Besnier's acquisition spree in the 1990s, however, had brought the company heavily into debt, with FFr 2.5 billion owed even before the Roquefort acquisition. To finance its debt without going public, Besnier sold 40 percent of SOFIL to three French banks--Crédit Lyonnais, Banque Nationale de Paris, and Société Generale--raising as much as FFr 800 million in capital.

After the Roquefort acquisition, Besnier slowed the pace of its purchases. Turning to consolidating the company's operations and improving the profitability of its recent operations, Besnier also sold off the Roquefort subsidiary, Sorrento, based in Buffalo, New York, to Kraft Foods. The lull did not last long, however. By the end of 1993, Besnier had made several new investments, including the acquisition of small (FFr 60 million) cheese producer Rousel, based in Puy-de-Dome, near Chamalieres, and a 51 percent controlling interest in Alsace Lorraine-based Unicoolait (Union des Cooperatives Laitières), a group of 820 cheese producers in the region with FFr 550 million in sales. Besnier was also maneuvering toward another major purchase. In January of 1993, he stepped up his stake in Fromageries Bel, the maker of the worldwide top-selling processed cheese product La Vache Qui Rit (Laughing Cow) with FFr 6.8 billion in 1991 sales. Besnier's share increased to eight percent, giving him slightly more than five percent of the voting rights in the company. By the beginning of 1994, however, Besnier had extended his share of Bel's voting rights to 20.57 percent. Bel's main shareholder and chairman, Robert Fievet, was then 84 years old; at the same time, succession issues were beginning to present themselves to the Bel founding family and controllers of the majority of that company's voting rights. Besnier adopted a wait-and-see attitude, making no secret of its interest in eventually adding Bel to the Besnier fold.

With FFr 24 billion in annual sales in 1993, Besnier was not only France's largest dairy products group, it had also become one of the largest in Europe, behind industry leader Nestlé. As the French dairy industry moved closer to consolidation, Besnier began focusing on new product development, introducing, among others, its own emmental cheese. In 1995, the company expanded its U.S. operation, building a 60,000-square-foot facility in Belmont, Wisconsin. The following year, the company made its first move to expand into the reviving Eastern European market. In April 1996, Besnier created a joint venture in the Ukraine with Nikolaiev. Four months later, Besnier entered Poland with the 83 percent purchase of that country's Polser dairy. Meanwhile, questions about the possible successor to Michel Besnier, who turned 67 in 1996, were answered as Besnier began grooming son Emmannuel, 26, to take over the company's operations.

Principal Subsidiaries: SOFIL (60%); Caves de Roquefort (66%); Besnier America; Besnier International.

Further Reading:

  • "French Cheese Move in Poland," East European Markets, August 30, 1996.
  • Dawkins, William, "Roquefort Returns to the French Cheeseboard," Financial Times, October 3, 1992, p. 12.
  • Herzog, Karen, "French Connection: Wisconsin Village Says 'Oui' to Cheese," Milwaukee Journal Sentinel, September 8, 1996, Food Sec., p. 1.
  • "How a French Connection Found a Taste for the UK," Grocer, January 15, 1994.
  • Mans, Jack, "C'est le Brie," Dairy Foods, January 1996, p. 49.

Source: International Directory of Company Histories, Vol. 19. St. James Press, 1998.