You generate over 85% of your turnover from exports. Can you walk us through MONIN’s international journey?
It all began in 1985. At the time, I had been offered an opportunity to set up a subsidiary in Hong Kong for Crédit Agricole, when my father said to me: ‘Come home, or I am selling the business.’ The company had been losing money for three years; it was in really bad shape. We were generating 50 million francs in turnover back then. I did not hesitate for a second: I loved the challenge of going back to help my father.
Things were pretty bleak at first. I remember a meeting in December with our bankers, just before Christmas; I was 27 years old. I presented them with a restructuring plan: we were losing 600,000 francs, and I announced that in 1986, we would make a net profit of 600,000 francs. We made 660,000. At the end of 1986, I changed banks, as the previous one had demanded my father mortgage all his assets.
To save the company, we desperately needed volume. We knew how to make spirits and pastis. I put on my salesman’s hat and swept up entry-level pastis contracts. The margins were ridiculous (€0.10 or €0.13), but since the production lines were standing idle, it was an immediate bonus. It allowed us to keep our heads above water. At the same time, I decided to tackle syrup exports, a market where there was absolutely no one. In France, big players like Berger and Teisseire were already established, but abroad, people did not even know what syrup was.
We had the idea of selling our products not as syrups, but as ‘alcohol-free liqueurs’. Back then, an alcoholic liqueur cost between €20 and €25 because of taxes, whereas a syrup sold for around €2. I was selling my alcohol-free versions for between €6 and €7. The margin was incredible. I took a map of Europe and started with the Scandinavian countries (Sweden, Denmark), where taxes on alcohol are very high. We worked our way up, country by country. Today, we are present in 166 countries. It has been a painstaking process: we were discovering new flavours everywhere, recreating local spirits as alcohol-free syrups. We have grown from 25 flavours in 1986 to over 200 today.
In 1996, you made the decision to set up operations in the United States, in Clearwater, Florida. How did that phase go?
I had been a banker in the US, so I wanted to go back. In 1989, I attended my first trade shows. In Las Vegas, the Americans would taste the syrup and spit it out because it was too sweet. They couldn’t care less about syrup. What saved us was Starbucks. The arrival of flavoured coffee (vanilla, hazelnut, caramel) was an incredible stroke of luck. Without that, I am not sure we would be where we are today.
When I arrived, I had no official title, and I spent time in every department. The team at the time was over 60 years old. I made mistakes; I hired incompetent people my own age, then I rectified this by bringing in executives in their forties. I am very pragmatic: as soon as I spot a mistake, we change course.
We found a small importer in Florida who wasn’t paying us. We decided to absorb them while keeping their micro-structure, and off we went: by 1992, we were already selling 1.5 million bottles. When customs duties jumped from 10% to 25%, I said: “We need to build a factory.” We laid the foundation stone on the 1st of July 1995, and on the 2nd of January 1996, our first bottle rolled off the line. We achieved that in six months with a crazy French engineer we had poached, but becoming “American” accelerated everything.
You then took things a step further with local manufacturing in Brazil, Malaysia, and soon in India. Why make this shift to local production?
Our first major decision was exporting; the second was local production. After the US, we set up in Malaysia in 2006. Going to Asia was an absolute must. We exported from Malaysia to 30 countries, particularly to the Gulf, because we were producing halal. It was a highly strategic move. We even secured local incentives that brought our tax rate down to 7% for ten years: Malaysia was a true cash machine.
After that, we built a site in Bourges, then in China in 2017, a second US factory (in Nevada) in 2020, and, nine months ago, one in Brazil. The factory in India is producing its first bottles this week; it will be our eighth plant.
In the meantime, we had built a facility in Russia, and we were incredibly proud of it. However, we opened the factory a month and a half before the war. It has therefore turned into a disaster, and we are losing a lot of money. We have found a buyer, but we are going to sell it for less than a twentieth of its value. A tough break.
You have also acquired vanilla plantations in Madagascar and yuzu plantations in Portugal. What drove this vertical integration?
I am very “pro-nature”. It bothered me to buy vanilla without knowing where it came from. I met a brilliant Madagascan in Bourges, and fifteen minutes into his presentation, I asked him: “When do we leave?” Today, we own the largest vanilla plantation on the island. We set up in the south to be left in peace, nestled between the sea and a lake. It is the women from a small local village who tend to it; it is absolutely wonderful.
For the yuzu, we took the exact same approach. We discovered the fruit in Japan and turned it into an incredible fruit purée. However, buying it from Asia is not very ESG-friendly. Therefore, we chose Portugal for its climate. There, we found a retired Frenchman who owns 300 varieties of citrus fruits. We have made mistakes with our cultivars, and it is exceedingly expensive (over a million euros a year in trials), but we have the financial means to do it. Last year, a hurricane wiped out the harvest (yielding 30 kg instead of 2 tonnes), but we are pressing on. We have even just acquired a historic tree nursery in France (now in its 13th generation) with 340 tree varieties, simply to preserve that heritage.
Is ESG a selling point, a cost, or a driver for growth in international markets?
Today, there are over 150 syrup manufacturers worldwide. To set ourselves apart, we focus entirely on being 100% natural. We are leading by example through agroforestry. In Bourges, we have just acquired 80 hectares to build production facilities surrounded by berry bushes and trees, completely free of chemical inputs.
It is an expensive endeavour, and people think we are crazy, but because the business is highly profitable, we can afford to do it. We maintain a double-digit net profit margin. My parents worked incredibly hard, but selling our syrup at the right price point is what gives us the freedom to invest back into nature.
On a personal level, what is your greatest source of pride and your biggest regret when it comes to international expansion?
My greatest pride is our first factory in Florida. In the photo where I am holding a shovel for the groundbreaking, there were ten of us. But this story has a darker side. I had entrusted the management to a Swede in whom I had complete faith. He turned out to be the biggest crook in the world. He would present me with balance sheets showing a $300,000 profit, when in reality there was a $3.5 million shortfall. He was buying himself houses with the money. Fortunately, a young Swedish accountant came to see me to reveal that it was all a fabrication. We eventually recovered his shares, and the company was back on a healthy footing the very next day. We had a narrow escape.
My biggest regret is that misplaced trust. I was naive. I have also had product failures, such as an energy drink launched with a Spanish team, called ‘Extasis’. After three weeks, parents were complaining, so I said: ‘Wrong track, pull the plug.’ And of course, Russia, which has been a major disappointment, but who could have foreseen that?
What advice would you give Altios to improve its international support over the next ten years?
The work of Germain, your former head of Altios India, was perfect; he was a brilliant advisor. He knew India inside out, and he spoke a little Hindi, which is rare for a Frenchman. Above all, he immediately understood our core strength. We do not sell syrups: we sell solutions for our clients. We go into a bar or a restaurant, we look at what they do, we leave them a few bottles, we give them a few recipes, and then we let them get started. They are the ones who call us back a few weeks later saying, “We would like another flavour.” That, I believe, is what Altios needs to embody: professionals who truly understand their clients’ business and who bring them genuine solutions.
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