As I casually read the French news a few days ago, I stumbled upon a sad yet expected announcement– the demise of the beloved and iconic French brand Chocolat Poulain.
The last Poulain factory in France—with 109 employees—is fighting for survival and should close its doors by the end of the year. One hundred seventy-six years after its founding, the famous chocolate confectionery will now be relocated to another country with lower costs. It feels like the end of a death spiral that started in the 1990s.
If you didn’t grow up in France, you might not have heard of Poulain. But that little galloping foal on an orange background and the smell of chocolate punctuated my childhood memories like many French kids across generations.
Chocolat Poulain is not just a brand; it’s a part of our collective nostalgia and a symbol of our shared experiences.
But what set Poulain apart from others wasn’t its superior quality. Most will agree it isn’t the best-tasting chocolate. One unique marketing trick attracted kids to their cocoa-based products: trade cards and images.
And I can tell I was hooked. Whenever my Mom bought a Poulain chocolate bar or powder, I would jump on it to discover the new image hidden under the aluminum foil surrounding the tablet or stuck along the powder sachet!
Poulain started in the late 1800s with colorful images or vignettes that turned into a set telling a story. As you can imagine, children were thus encouraged to eat more chocolate. And their parents would buy more to help them find out the rest of the story.
Poulain didn’t invent the concept, but they successfully grew it. The approach reached its peak success in the 1970s-1980s.
When I started collecting my images, photos of different themes had replaced the drawings. There were 46 series of images ranging from cars to technology, mushrooms, and monuments. These turned into albums of 24 images each.
That makes for a lot of chocolate bars and potential indigestions!
I had a few albums then and traded my duplicate images with Poulain to recover the ones I missed. I wasn’t alone; one in eight kids of my generation did the same thing.
My interest faded as I approached my teenage years, and I’m not sure what happened to these albums.
Yet, Poulain helped build some aspects of my general culture. Still today, the Proust madeleine kicks into action whenever I see the jumping foal on its packaging.
The true-and-tested marketing technique was brilliant.
Alas, it wasn’t enough to keep Poulain out of trouble.
Cocoa and other raw material costs kept growing, margins shrank, and chocolate consumption dropped. It was a challenging equation that the company couldn’t overcome.
Now, Poulain has fallen into disarray.
The company changed hands too often. It was bought by Cadbury Schweppes in 1988 and sold to Kraft Foods in 2010.
Since 2017, it belongs to a French private equity firm, Eurazeo, which has invested in over 600 companies.
The leadership team is aggressively improving the bottom line and returns to shareholders. Once you’re in turnaround mode, this private equity (PE) world can be brutal.
I have nothing against PE; it has saved many companies and teams. However, in that case, their focus on the short-term and eventual sale of the assets for a profit won’t do any good for the iconic Poulain brand.
If you’re unfamiliar with PE, you can compare them to a home flipper vs a homeowner.
The homeowner is vested in making the house a nice place to live. They will likely invest in nicer appliances, flooring, and upgrades, increasing the house’s long-term value.
The flipper cares more about what the home looks like on paper. He is concerned with making a profit off the house as soon as possible. It leads them to make decisions based on the calculated ROI.
A PE-held company is closer to the flipper. Also, high management fees and debt repayment usually leave little cash to reinvest back into the business. It isn’t good for its long-term value.
So, should the 109 employees of the Blois factory be concerned about their future livelihoods and community?
Will Poulain chocolate aficionados have to kiss goodbye to their favorite indulgence sooner rather than later?
Unfortunately, I’m afraid the answer is most likely yes.