French producer and packager of aseptic and refrigerated liquids, Laiterie de St. Denis de l' Hôtel (LSDH), stakes its future on its all round service pack.
“In a sector where contaminating elements, such as GMOs, allergens and microbic flora, which evolve and become resistant to treatment, our customers come to us not only looking for top quality products, but also serenity and security and the capacity to resolve complicated problems quickly,” says Emmanuel Vasseneix, the company's president.
With 360 million packages produced per year and a turnover of 150M€, the family company prides itself on its independence and the expertise of its workforce built on nearly fifty years of packaging experience.
Founded in 1909, LSDH has been in the Vasseneix family since 1947 when Roger Vasseneix, the current president's grandfather bought the company which was then a producer of dairy products. With the industrialization of the sector the company focussed its business on milk production and bottling. “We were the first to package milk in pressure-sealed glass bottles,” says Emmanuel Vasseneix. The company then went on to package milk in plastic bottles in 1968 and, after the group Celia became its majority shareholder in 1972, invested in production lines in 1977 for the packaging of milk in Tetra Pak cartons. “Throughout the 25 years of belonging to the Celia group, my father, André Vasseneix, managed the company as a family business, considering that the determining factor for the future development of the company resided not in the capital but in the people that composed the company,” says the president. “All the know-how we have accumulated over the years to meet the demands of our clients has been developed thanks to our people.”
In 1980 LSDH acquired a second production site, Laiterie de Varennes, 80km from St. Denis de l' Hôtel (near Orléans). With the introduction of milk quotas in 1985, the company expanded into the production and packaging of fruit juices and soya-based beverages. “We had to develop techniques and know-how which in the future will allow us to offer our customers a larger and more diversified range of products,” says Emmanuel Vasseneix.
In 1996, André and Emmanuel Vasseneix set up a leverage buy-out with two other partners, Orlait and Fremont, to take over the company. Today the Vasseneix family owns 66% of the company with a 34% share held by Orlait SA.
LSDH dedicates 30% of its production to milk, 55% to fruit juices and 15% to products like Danao and soya-based drinks. Superstores and hypermarkets constitute 60% of the company's clientele including such distributors as Carrefour, Métro, Leclerc, Auchon and Le Mutant; the catering, hotel and leisure industry makes up 10% and industrial brands 30%.
The company's opting to not develop a brand itself gives it a freer hand to take on brand names as co-packer. Emmanuel Vasseneix, who cut his teeth working for Danone before taking up the reigns of LSDH, explains how : “At Danone, I saw that being limited to the production of brand names only, meant that production lines could not always be used to their full capacity. For example, a 30 million unit production line would have to be used for an order of 10 million units. With this experience in mind, at LSDH we've developed a copacking service whereby we can effectively take on a production line of 30 million units even if the client only needs 10 million for a particular brand. We simply find other clients for the remaining 20 million units and so use the production line to its full capacity.” This strategy has proven successful with household names like Alpro, Coca Cola, Lipton, Joker, Unilever, Danone…
Another important factor Emmanuel Vasseneix points out is the company's rapidity to produce a new product for market launch. “Some clients come to us because it may take them up to eighteen months to launch a new product whereas, thanks to our skilled and experienced production crews, we are capable of setting up a product for market launch in four months. Parallel to this our well oiled production process means that in less than one hour, we can change a line from a chocolate milk drink to orange juice.”
LSDH offers the possibility of mixing up to twenty ingredients into the production process for the elaboration of health, fruit based and dietetic drinks. “The objective here is to enrich the product with nutrients but without altering the taste,” says Emmanuel Vasseneix. “For example, many people take sweet orange juice to start the day. Incorporating calcium, vitamins and minerals into the product without changing the taste will be doing the person an extra favour.”
But more than composing their clients' products, the company aims to develop and propose new products which fit into the client's product range and which may help resolve public health problems such as obesity, cholesterol and cardiovascular conditions etc.
“In this way, not only do we provide our customers with a packaging mode that best suits their marketing needs (from Tetra Brik cartons to plastic bottles), we also provide them with an all-round service pack which includes copacking, product elaboration and a proposition force for new products with all the technical and logistic support that goes with it,” says Emmanuel Vasseneix.
“To limit the number of manipulations in the supply chain, today we take care of delivering aseptic products directly to the client's distribution warehouse ourselves,” explains Emmanuel Vasseneix. “For our fresh products we work conjointly with our customers to develop an ECR (Efficient Consumer Response) logistic system based on a network of interrelated computer systems with connections located in the sales outlets, the customer's warehouse and at LSDH.” The system manages the supplies of products based on sales in the retail outlets.
In short, for the customer this system provides an increase in sales and margin per metre squared, a decrease in supply ruptures, a drop in breakages and stocks, and better valorization of new products with fewer unsuccessful launches. For LSDH the system means an optimization of their fabrication process and the administration of stocks and transport, a reduction of stocks and storage costs, as well as a drop in the number of returns.
“Quality is at the very heart of our business. Working with such prestigious names as Danone or Coca Cola, means being at least as good as they are,” says Emmanuel Vasseneix. Out of 360 employees 35 work in quality and quality assurance. LSDH has been awarded national and international certification, uses water with official "spring water" classification, and has round-the-clock site surveillance with intruder alarm systems. To add to this, Emmanuel Vasseneix points out, “via our adherence to national and international authorities regulating the milk and fruit juice industries, we are able to carefully select our suppliers of raw materials who are compelled to abide by our strict set of specifications. All our products are GMO free”.
The company's COFRAC certified laboratory at its Varennes plant performs as many as 105000 tests per year. It has three main functions: As a control laboratory it carries out physico-chemical analyses throughout the product elaboration phase. Sensory tests check the development of taste and aroma properties of fruit juices and new products. Specific tests via HPLC (High Performance Liquid Chromatography) and atomic absorption are also carried out in the laboratory.
In its resolute focus on quality, LSDH is currently developing the Trace One traceability system to allow the company, through an interrelated computer system, to immediately track down product batches, identify the composition and conformity of the product, and, in case of defect, immediately withdraw the bad batches from the market.
Convinced that the company will not be able to rival with low-cost companies located in countries like Poland and Romania, but a five hour drive from France, the company has focussed its development on quality, innovation and diversification.
To back up this strategy, in 2005 the company invested 1M€ in two new production lines for plastic bottles. “Now that we're applying our filling and packaging know-how of cartons to plastic bottles to give our clients greater diversity in the containers they can use, the next step is to further diversify the liquid contents we can put in them,” says Emmanuel Vasseneix. “The more a product is complex and is produced in small quantities the less chances it has of being copied.”
“To illustrate how innovation creates opportunities, we've been working on how to package seawater in Tetra Brik cartons. It may seem obvious but seawater contains chloride which, once mixed with other elements, can cause corrosion to our installations, so our development teams set to work on finding a solution. Our having built up knowledge on salted liquids, thanks to our seawater project, meant that when Campbell were looking for a copacker for their salted soups for Germany, they came to us and we were awarded the contract,” explains Emmanuel Vasseneix.
The teams at LSDH have been innovating and developing products for two decades, with over 1000 references to their name, their creative drive is not likely to wane. “I believe that 50% of tomorrow's products have yet to be created,” says Emmanuel Vasseneix.
.