Page 72 - Forbes - USA (March 2018)

Th e World’ s billio na ir e s

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FrancIs older shopped had drastically changed—mom-and-pop boulange-
ries had given way to supermarkets. Holder realized where
the future lay and within five years persuaded two future mul-

tibillion-dollar French supermarket chains—Monoprix and
Auchan—to carry his baguettes and loaves.
While he clearly had the ambition, Holder was ill-prepared
to manage such a fast-growing company. He had to move fac-
tories three times in a year because the company continual-
ly outgrew its space. “I never made projections about what
it would be in 10, 20 or 30 years,” says Holder, who kept the
books himself back then.
Then, in the 1970s, the supermarkets—locked in hy-

percompetition—began demanding bigger and bigger dis-
counts. His 11% discount soon became 45%. He also had to
buy back unsold bread at the end of the day. Holder’s facto-
ry fell below break-even, and he realized he had to diversi-
fy beyond the commodity bread business. He reorganized
the factory to keep its existing customers, producing about
1 million pounds of bread a month, but he no longer invest-
ed in expanding it. During moneylosing periods, he convert-
ed areas of the facto-
ry into parking spaces
and sold them by the
month. Over the years,
he learned to renego-
tiate contracts to pro-
tect future profits by

locking in prices, and
he stopped taking back
unsold loaves.
With the low-mar-
gin industrial bread
A slice of the business: Holder’s three children each have a domain in
Groupe Holder, including the Paul bakery brand and the Ladurée bakery. operations stuck in neu-
“Because tral, Holder refocused on the
cookie has expanded far beyond Ladurée—and Hol der is to McDonald’s Paul bakery, under the family
thank (or blame) for that. Today, he estimates, 60% of Groupe is really apartment. “I still had nostal-
Holder’s in-store sales come from macarons. Hol der is respon- gia for craftsmanship,” he ex-

sible for France’s top three macaron sellers: Ladurée, Paul and, loyal, this plains. Paul was selling thick,
surprisingly, McDonald’s. McDonald’s McCafé macarons are baker has chewy, yellow bread with a
sold in many countries outside France, including Spain, Italy factories slight hazelnut taste—drasti-

and Belgium, as well as in Japan. throughout cally different from his facto-
“Some were surprised about McDonald’s being third,” ry bread—at a time when the
Holder says. “We said, ‘That’s obvious. We are the one who de- the world.” number of local bakeries in

livers them.’ Because McDonald’s is really loyal, this baker has France had dwindled by about
factories throughout the world.” 25% amid competition from
supermarkets. He decided to
Francis hoLDEr TooK over his family’s small bakery, below make Paul an artisanal chain and installed himself as head of
the apartment where he had grown up, when he was 18, after the company. Holder opened two more stores in Lille before

his father, who was abandoned as a child and raised in fos- expanding to Paris in 1974. Then came shopping malls: As

ter care, died of a heart attack at 51. From there, his ascent can with supermarkets, Holder was early to the next wave of mass
be divided into three distinct phases: creating a bread factory, retail. Around the same time he toured the United States and
building the Paul bakery brand and then melding the two to became enamored of American food-processing methods.
bring artisanal bread to the masses. Holder helped found a successful chain of French bakeries

The first starts in 1961, when Holder came back from a and cafes, La Madeleine, before being ousted by his partners PhiliP Jintes for forbes

brief tour of duty in the Algerian War (with a popped eardrum and returning to France.
that left him partially deaf) and found that the way people By the end of the 1980s, Paul had 120 shops, about a dozen

70 | FORBES MARCH 31, 2018