Grupo Català supplier of Mercadona

In Catalonia there are thirteen companies that produce the exclusive brands of the largest Spanish supermarket chain, with investments that exceeded 65 million in 2008. The integrated suppliers that produce the Hacendado, Bosque Verde and Deliplus brands invested more than 65 million euros in the past year to expand its production centers in Catalonia.

In recent weeks, Mercadona has starred in the news in the distribution sector. The withdrawal of 800 products from their shelves has caused a strong controversy, especially among the leading brand manufacturers in the market. However, the chain chaired by Juan Roig ensures that half of the references that have been withdrawn correspond to the producers of the chain’s own brands: Hacendado, Bosque Verde, Deliplus and Compy. But who is behind these signs?

Mercadona has a hundred manufacturers that produce practically exclusively for the group. They are the so-called integrated suppliers, companies with which the chain establishes a long-term relationship and which are governed by an open books policy, so that, at all times, both parties know their margins.

Thirteen of Mercadona’s 100 integrated suppliers are from Catalan capital or have their production centers in Catalonia. From these factories, the 1,212 supermarkets that the chain has in Spain (141 in Catalonia) are supplied with products as varied as pizzas, bath gels, hair dyes, chicken and rabbit meat, sausages, milk, mineral water, pears, kitchen paper, makeup or garbage bags (see box). These companies must be joined by the multinationals Cantalou (cocoa powder) and Multy Abrasponge (scourers), which do not manufacture in Catalonia but have their distribution centers in Pallejà (Baix Llobregat) and Montmeló (Vallès Oriental) –respectively– their distribution centers.

Family capital
According to provisional figures compiled by EXPANSIón, the Catalan integrated suppliers invested more than 65 million euros in 2008 in the expansion and improvement of their production facilities. In 2007, the investment effort was 190 million, especially for the new plants of Casa Tarradellas in Gurb (Osona) and the SCA paper mill in Puigpelat (Alt Camp).

With the exception of this Scandinavian multinational and Sada (owned by the Dutch company Nutreco), Mercadona’s Catalan integrated suppliers are family businesses and a cooperative. Monter, Maverick and Cunicarn work exclusively for Mercadona. Likewise, the supermarket chain absorbs 90% of Azalea Cosmetics sales and 70% of Saplex’s turnover. The degree of dependence on Casa Tarradellas is also high, although the company does not reveal the figure.

“We have all our eggs in the same basket,” says Ramon Calbet from Cunicarn. The businessman is not worried about this situation because the Mercadona system gives him the peace of mind of knowing that he always has all the production sold and that he will be paid within 30 days. «We know the rules of the game perfectly; it is a long-term mutual relationship of trust and transparency that allows us to continually invest, ”adds Calbet.

The boss’
Daniel Folch, of Saplex, is also “absolutely happy” to be a Mercadona integrated supplier, and admits that “if they close, we too”. “Mercadona offers us a path to excellence, demands it from us and makes it easier for us; We haven’t had to worry about anything other than improving for five years, ”says Folch. The entrepreneur especially values ​​the agility with which decisions are made and the “daily scrutiny” to which the chain’s customers (the boss, according to the group’s slang) submit the company.

Joan Català, director of Grupo Català, expresses himself along the same lines, highlighting the fact that there is “a single interlocutor” and the possibility of knowing first-hand what the consumer demands. “We will continue to invest to keep up with the chain and adapt to customer tastes,” says Català.
The contracts that Mercadona signs with its suppliers are vital, but at any time either party can break them. If this is the case, the chain chaired guarantees a “release period” of three years. Among the Catalan groups that have gone through this process is Gallo, which in 2006 was replaced by Siro as the maker of the Hacendado pasta.

Catafruit, pears and peaches from Lleida
The Català family has invested 40 million euros in five years thanks to the fact that Mercadona is the main client. Through Catafruit, the Lleida group Grupo Català supplies pears, nectarines, peaches and apricots to the chain’s supermarkets, in addition to collaborating with the integrated supplier of apples and plums. In 2001, Catafruit sold three million kilos to Mercadona, a figure that amounted to 27,000 tons last year. The bulk of the investments have been destined to duplicate the surface of own fruit farms, which now total 1,300 hectares between Lleida, Aragón and Extremadura.

In accordance with the long-term agreement with Mercadona, Grupo Català has installed part of its farms an expensive anti-hail system consisting of meshes that cover the trees but do not impede the growth and ripening of the fruit. The farms have also been equipped with drip irrigation systems and antifreeze devices in order to ensure harvests and guarantee supply to the distribution group. Grupo Català has also invested in a fruit packaging and supply plant for Mercadona in Tenerife, in addition to the centers that the company already had in La Portella (Segrià) and in Mérida.

In 2008, Grupo Català, now managed by the second generation, sold 87,000 tons of fruit and had a turnover of 66 million euros. Half – 33 million – corresponds to sales with Mercadona and the rest to foreign customers (Holland, United Kingdom and Germany) and to supply to the processing industry. “Being integrated suppliers has allowed us to fulfill our goal of taking the fruit directly from the field to the final consumer”, explains Joan Català, general manager.