Lotus Bakeries: 'In the food sector, you have to be patient'
In recent years, Lotus Bakeries has gone all out for the internationalisation of the Biscoff® brand. It’s first factory in Asia is currently being built in Thailand. KBC's international network is helping the company achieve its ambition.
Jan Boone, CEO of Lotus Bakeries, believes strongly in focus. ‘It pays to make strategic choices. A few years ago, we took the decision to internationalise Biscoff®. Our branch, Lotus TMNatural Foods, with healthy snacks, comprising a number of brands acquired in the UK, is also going international. We’ll continue supporting our brands that are strong in our local markets of Belgium, the Netherlands, France and Sweden, but we’ve no plans for globalisation of those brands.’
This approach has paid off. ‘We’re seeing a shift in our sales: Biscoff® now accounts for just over half of sales; our healthy brands are growing to a share of around a quarter and our local brands are up to just under a quarter of total sales.’
The internationalisation of Biscoff® has implications for the supply chain. ‘We’ve invested in a factory in the United States and are building one in Thailand. As a result, our products will reach consumers fresher, our transport costs will reduce and our operations will be more environmentally friendly.’
Local experts, decisions in Belgium
Lotus Bakeries can make use of KBC's international network to support its expansion abroad. The bank has a presence in several countries in Europe, the US and Asia, where small teams of local experts are managed by a KBC Commercial Banking specialist. ‘These teams are focused on customers from our home markets who are looking to export to that country or set up an activity there’, explains Wim Eraly, Senior General Manager of KBC Commercial Banking.
‘They can access all our banking services there, including for loans, payments and advice on the local market. This way of working has grown organically over the years. When customers like Bekaert moved to China, we went with them – not to offer our services to Chinese businesses, but to offer local support to our customers there.’
We’re proud that we still produce in Belgium, and can leverage the know-how and commitment of our employees here.
Jan Boone - CEO of Lotus Bakeries
Lotus Bakeries was already making good use of that support. ‘When we open a new sales office, whether it’s in Australia or Japan, we always speak to our senior banker at KBC to ask if they can assist us in that market, or whether they have partners there,’ Boone says. ‘It’s helpful to have a dedicated contact and to be able to call on local expertise so we can act quickly when needed. At the same time, we think it’s important that the bank's decision-making centre remains in Belgium. That’s how we work ourselves.’
The relationship between KBC and Lotus Bakeries dates back to the company's early days, 90 years ago, when Boone's grandfather first teamed up with KBC. The bank has grown along with Lotus Bakeries over that time. ‘KBC has always remained loyal, in good times and bad. The two management teams have a good working relationship. The open dialogue is an essential part of that. It means we’re always able to explain our long-term strategy, where we want to go and why.’
New product lines in Lembeke
Lotus Bakeries is not only investing abroad: the production plant in Lembeke, Belgium, has also been updated in recent years. ‘Our new sandwich cookie, comprising two biscuits with different types of cream filling in between, was an instant success, but it’s also very complex to produce. To make that possible, we needed two new production lines. We’re proud that we still produce in Belgium, and can leverage the know-how and commitment of our employees here.’
Lotus Bakeries also received solid backing from KBC in financing that investment, and KBC is also supporting the transition to sustainability that Lotus, like many other companies, is going through. ‘Transparency is particularly important to us,’ Boone says. ‘Are we achieving zero emissions? No, but we’re working on it and the way forward is clear. That’s what our stakeholders – investors as well as employees – care about. Only yesterday, a potential US investor complimented us on the way we cover sustainability in our annual report.’
The green economy offers lots of opportunities. We can play a role in helping companies with choosing new technology, financing it and selecting sustainable targets
Wim Eraly, Senior general manager KBC Commercial Banking
But the company’s efforts don’t stop at reporting. ‘We now operate a bike leasing scheme for our employees here in Belgium, in partnership with KBC. It’s been a great success and hundreds of employees now come to work by bike. That might be a small thing, but it’s symbolically important.’
European reporting regulations are set to become even more exacting, Eraly acknowledges. ‘Europe sees banks as a lever to encourage corporate sustainability. We can play an advisory role in areas such as new technology and transparency, for example. The green economy offers lots of opportunities.’
Food is tradition
And so the bank evolves along with the challenges faced by its customers. The biggest challenge for Lotus Bakeries, according to Boone, is patience. ‘That's always the case in food,’ he observes. ‘Food encompasses habit, tradition, patterns passed down from generation to generation. Just because we put Biscoff® in the shops in Latin America, say, doesn’t mean that it’ll immediately start flying off the shelves. Shopping habits are also different in different places. In India, for example, you find mostly lots of small shops with a limited product range. You have to take that into account, and that requires strategy and persistence. ‘We’re starting to achieve success In America now, but we’ve been plugging away at that market for 30 years. We’ve confidence in our product. It will just take time.’