{"id":7687,"date":"2015-12-10T01:36:07","date_gmt":"2015-12-10T06:36:07","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/picard-french-gastronomy-everyday-for-everyone\/"},"modified":"2015-12-10T01:36:07","modified_gmt":"2015-12-10T06:36:07","slug":"picard-french-gastronomy-everyday-for-everyone","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/picard-french-gastronomy-everyday-for-everyone\/","title":{"rendered":"PICARD, French gastronomy everyday for everyone!"},"content":{"rendered":"

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Picard is the most famous success story in French food retail. I could eat Picard everyday!<\/p>\n

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BUSINESS MODEL<\/p>\n

Picard is a retail store chain selling ONLY FROZEN food products, which are very high quality, very easy to cook at home, and taste as good as fresh products cooked in restaurants.<\/p>\n

Picard offers high variety of products with more than 1,200 SKUs. That includes sophisticated appetizers, vegetables, meat, seafood, fruits, bakeries, desserts, festive products, local specialties, and high-end prepared meals (French, international cuisines, Indian, Italian, Mexican, pizza, Chinese, etc.).<\/p>\n

Picard has the highest brand recognition in food, and more than 40% market share in frozen food.<\/p>\n

Picard has developed a dense network of 1,000 stores in France, mostly well located in city centers (proximity stores), and opens 40 new stores per year, including Italy, Belgium, and Switzerland.<\/p>\n

Finally, the business generates 20% margin, which is exceptionally high for any food retail chains (usually below 5%).<\/p>\n

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OPERATING MODEL<\/p>\n

Picard has created over time a successful innovative operating model that is fully aligned with its business model and differentiating against the competition.<\/p>\n

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A Full Vertical Integration<\/u>:<\/p>\n

In order to keep full control from product conception to customer interaction, Picard has developed a vertically integrated model, which is extremely rare in the food chain industry. In fact, Picard develops its own products and receipts, produces most of its products in close partnerships with selected manufacturers, controls its brand under which all the products are sold, distributes its products across the country, and finally operates its own stores.<\/p>\n

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\u201cFrozen Supply Chain\u201d and Just-In-Time<\/u>:<\/p>\n

Given the constraints of constantly maintaining the frozen products under a certain temperature, Picard had to invest in a complex supply chain without any freezing interruption.
\nAlso, the stores are often located in expensive city areas, so the store size, and in particular the storage capacity within the store (the \u201ccold room\u201d) is very limited. Therefore, the company needs to deliver its stores \u201cjust in time\u201d, which is unusual for food retail chains. Picard has developed a sophisticated system to track stocks and demands within stores, and to optimize the deliveries from different distribution platforms and group them between stores. As a result, stores are delivered everyday and sometimes twice a day!<\/p>\n

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Product Innovation NEVER Stops<\/u>:<\/p>\n

In order to stay appealing to changing consumers\u2019 tastes, and to follow the seasons, Picard is every year creating 200 new products and modifying 200 existing products, representing about 30% of its total offering, which is huge! Picard has retained a team of 30 highly talents Michelin chefs to create new products both delicious and easy to cook at home for anyone.<\/p>\n

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\n\u201cObsessional\u201d Quality Control<\/u>:<\/p>\n

Because Picard has developed an image of premium high quality products, the company is obsessed with quality controls at every stage of the supply chain. The company avoids taking any risk of diseases, bad press or food scandals. Before releasing any new product, Picard\u2019s scientists take on many tests in laboratories. As a result, it takes 10-12 months between the chef\u2019s ideas and the store distribution.<\/p>\n

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In-store organization<\/u>:<\/p>\n

Picard has designed a smart concept for store. The environment is clean, clear and familiar. In order to save space, all the stock is disposed in the freezers (the storage cold room is very small). In order to maximize the sales, every customer has to follow a precise route in the store, and can\u2019t cut alleys like in other retail stores. As a result, customers will pass by every single freezer and product on his way to the cashier. And the freezers are disposed in a very specific and thoughtful order: at the beginning are presented the new products and promotions, then appetizers, entr\u00e9es, vegetables, prepared meals, meat, seafood, desserts, and ice creams.<\/p>\n

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Decentralized system<\/u>:<\/p>\n

The store manager has a lot of freedom and responsibility in the store, because he needs to choose about 400 SKUs among 1,200 SKUs (because there is limited space in the store). The manager is also in charge of passing the delivery orders. The rationale is\u00a0 that in-store employees are the ones who know the best what the customers want.<\/p>\n

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Customer experience:<\/u><\/p>\n

Finally, the store is operated by 3-4 employees who dress like chefs, and are trained to provide detailed information on the products and give cooking advice to the customers. This helps create strong relationships and loyalty with the customers. In addition, the Picard warranty states that if a customer is no satisfied with a product, he can claim full reimbursement.<\/p>\n

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