Gema B. Muñoz
Three years after opening its first bakery/restaurant in Tenerife, the Valencian company has more than 40 establishments in Spain, along with plans for a total of 50 establishments to be up-and-running by year-end and revenues of 9 million euros, i.e. three-times more than last year. Its plans for 2014 include doubling the number of shops, to 100, creating 300 jobs, and in 2015 it aims to enter foreign markets, mainly Central and Eastern Europe and Central and Latin America.
"We are taking it step by step, but we are beginning to reap the benefits of being a nationwide chain", says Antonio Pérez Jiménez, founder and CEO of Panaria, who shares with Wiki Spanish Food his goal of expanding the company into all regions of Spain by 2014 year-end.
Panaria expects to have 100 shops by 2014-year end: 50 by the end of this year and another 50 next year. Of those, 20 will be proprietary and 80 will be franchises, with around 7 to 10 employees per locale.
Although the company's objective is to open an establishment in every region of Spain, the greatest number of establishments will be concentrated in Madrid, he adds. "When you have a strong presence in Madrid, you are able to position yourself well throughout Spain", says Pérez, who, before launching Panaria in 2010, was the general manager of an internal supplier of prepared foods for Mercadona for five years.
"I used to be the content executive, until I finally decided to make a change. Following Ken Robinson's words, I wanted to do something that I felt really passionate about, where it's as if time doesn't pass, even though you've been working for 20 hours", says Pérez. He took the plunge in 2010, at the peak of the crisis, which enabled him to access locales "that previously had exorbitant prices. For me, the crisis has been an opportunity".
This 45-year-old Valencia native has always worked in the food sector, and now, with his new project, he is looking to expand in international markets in 2015. "The idea is to open Panaria in Central and Eastern Europe, where there is less competition among organized retail chains compared with neighboring countries."
Although, according to Pérez, all countries in that region would be able to open Panaria locales through a master local franchise, the main targets are Poland, the Czech Republic and Hungary. The company is also looking to America, primarily Mexico, Colombia and the Caribbean. Those countries were chosen because there are already have Spanish companies functioning there (e.g. hotels) and because wheat products and baked goods are valued highly by consumers there.
According to Pérez, in Spain, "there's still room for new operators who are focused on artisan bread and on cafés. I don't pay much attention to the competition; my focus is more on improving each day".
He's also critical, commenting that he doesn't understand "how some cafés, which should have closed 20 or 30 years ago, are still functioning. If only new venues would open and these old ones would disappear—the cafés that haven't even changed their tablecloths in two decades or made their bathrooms handicap accessible. In Spain there's a lack of responsible entrepreneurs. I'm well aware that, in four or five years, I'll have to adapt my business to remain competitive", he adds.
These observations are in line with comments by George Mavromaras, president of the International Association of Plant Bakers (AIBI), who, on his last visit to Spain, underlined creativity and the launch of new products to address increasingly fierce competition.
Pérez agrees, adding that "at our bakeries, we aim to ensure a positive experience. I want Panaria customers to feel that the bakery is one of the nicest they've ever seen, in other places like London, for example."
Critical of the government
In addition to Pérez's harsh words for cafés that have made no efforts to modernize, he's also critical of the public administration, specifically city governments. "The absurd measures required by city governments make opening a locale in Spain very difficult. We have created an administrative and bureaucratic mess that dissuades entrepreneurs."
His criticism is directed at all city governments, but especially Madrid, where the local authorities make opening a locale "even more difficult and expensive", according to Pérez.
Nevertheless, Panaria already has six establishments in Madrid, which, like in the rest of Spain, open 365 days a year, from 7 am to 9 pm, and for which the average sale is four euros. Although bread and baked products are its core business, it also sells salad, soup, pasta, pizza and a dish of the day, for 7.25 euros, which customers can eat there or take away.
Pérez, who owns the company with another family member, has had some proposals to "joint the Panaria family", but he has no plans to allow others to enter its capital structure.