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29/08/2013

El Lobo swallows Doña Jimena

The Alcaudete factory, acquired by the group led by El Lobo, maintains its traditional sweets and enters the chocolate business.

Olatz Ruiz

Although the changes began some time ago, Doña Jimena, which specializes in traditional Christmas sweets and is based in Alcaudete, Jaén, is now ready to enter a new phase together with El Lobo, the Alicante-based company that acquired it for 1.2 million euros in April.

Doña Jimena, which is already working around-the-clock to prepare for the upcoming holidays, has become a key part of El Lobo's sweets and chocolate diversification plan.

"The deal started to take shape two years ago", says Andrés Cortijos, Head of Operations and Business Processes at Confectionary Holding, the parent company of prestigious turrón firm Almendra y Miel, which owns brands such as 1880, El Lobo, and now Doña Jimena. “The acquisition process had not yet begun, but the group was committed to expanding and improving its position in Spain just when our exports were increasing by double digits in year-on-year terms," he adds.

It was the time to make a decision and to commit to that growth. Until then, El Lobo was specialized in turrón, marzipan and some chocolates, but was looking to increase its product portfolio. Among the potential acquisitions, Productos J. Jiménez caught its eye. The company, founded in 1961, sold Christmas sweets under the Doña Jimena brand and was a complementary business in terms of industrial assets and customers. It produced 2,000 tons of sweets last year.

An analysis commenced of the company, which had been mired in bankruptcy proceedings since 2011; a bid was later prepared that would lead it into a new era.

In the last few weeks, workers headed back to the Alcaudete factory, which is once again up-and-running at full capacity. Every year, close to 300 people work during high season. A good portion of those jobs will be recovered, which has led the city government to support the changes undergone by the company.

Although Christmas production is at its peak, the company is working on integrating the IT systems to allow for joint management and the Alcaudete facilities are being refurbished. According to management, the integration process is practically complete.

New products

Truffles, chocolate bars, bonbons, and sugar coated almonds will be Doña Jimena's new products—items which, until now, were barely produced in Alcaudete. The company will also maintain its line of traditional Christmas sweets, including roscos de vino (ring-shaped cookies baked with wine), puff pastry, and mantecados (shortbread made with flour, almonds and lard), Doña Jimena's strong point prior to the El Lobo integration, products whose production will be reinforced when the process is complete.

This Christmas, both traditional sweets and chocolates and truffles will be sold under the same brand (Doña Jimena has proven to have good standing and loyal customers) in new packaging with a more modern design so as to convey a fresher image.

Traditional production will be focused in Jijona, where El Lobo and 1880 turrón and marzipan will be made.

To reach end consumers, the next step was to feature all the new products in updated catalogues for Spanish and international customers.

Turrón and the Mediterranean Diet

El Lobo's revenues totaled 30 million euros last year and its products reached 59 countries, most notably the United States, much of Latin America, and throughout the European Union. Exports, which are a fundamental component, accounted for 25-30% of the group's business.

Going forward, exports to Turkey, China and Arab countries are important for the company, which is similarly focusing on Australia and India as targets in the next four or five years.

The export strategy for Latin America is especially significant. Says Cortijos: "In that region, as in the US, products like turrón are immediately identified as being Spanish, and beyond that as being a component of the Mediterranean Diet, which further boosts their standing."

 

Moreover, the business in Latin America offers an inestimable advantage for the company's stability: turrón is not a seasonal product there, in contrast with Spain. Says Cortijo: "In the US and Latin America, turrón is consumed all year round and is not strictly associated with the Christmas holiday period."

Doña Jimena will bring to the holding (which includes El Lobo, 1880, and Imperial Toledana) an export tradition spanning more than 20 years to countries such as Mexico and Argentina, where it has subsidiaries (which it will remain part of the final structure).

Sales outside Spain are expected to expand in the next year by more than 10%. Turrón and chocolate appear to have what it takes to weather tough times.

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