Branch bakeries in Germany have suffered losses, with some affected severely due to Coronavirus. baking+biscuit international’s Editor Helga Baumfalk spoke with Thomas Prangemeier (CFO) and Hans Fux (COO) about the situation and the effects the pandemic has had on Kamps GmbH.
Baumfalk: Mr. Prangemeier, Coronavirus, and particularly the lockdown, have paralyzed the out-of-home market to a large degree. How have Kamps and its franchise partners fared?
Prangemeier: The effects of the pandemic have hit Kamps and the entire food and catering industry hard: Our high-frequency locations at airports, train stations and shopping centers have been particularly hard hit. Our franchise partners have been able to take advantage of government aid; however, for us as a medium-sized company, the only option available was to take out KfW loans – which, of course, will have to be repaid. Added to this was the consumer preference to buy packaged baked goods at the supermarket rather than fresh from the baker. There was also a tendency during the lockdown for many customers to keep the number of stores visited and the frequency of purchases as low as possible. Overall, this has led on average to a halving of peak sales across all locations.
CFO Thomas Prangemeier
Baumfalk: How did your company react?
Prangemeier: One thing was clear to us right from the very beginning: The health and safety of our customers and our employees was and still is our top priority! We have therefore intensified our already very high hygiene standards and quickly equipped all bakeries with disinfection stations, face protection and dividing screens in the counter areas. The implementation of reduced hours for our staff has enabled us to avoid layoffs at our headquarters and in production.
Fux: There is another side as the situation has forced us to take a close look at our own business model and the way we do business. We are closely observing how consumer behavior is currently changing in order to respond with appropriate services and also appropriate products. You could say that this is the positive side of the current situation. It will significantly accelerate our digitization strategy. The pandemic and its effects have acted like a turbocharger here.
COO Hans Fux
Baumfalk: Have you seen a reversal of the trend with the relaxing of restrictions? And how does the situation currently look?
Prangemeier: Although the easing of restrictions has helped to revive business in principle, we have not yet returned to the previous levels due to the existing distance rules and the general restraint of consumers. To put it clearly: We will not make up for the lack of sales this year. And it is becoming apparent that the general sales trend resulting from the pandemic will hit our entire industry hard.
Baumfalk: What do you expect from the market for the rest of the year and for 2021, assuming that there is no significant second wave in Germany? Prangemeier: We’re not fooling ourselves: 2020 is a lost year and we’ll be glad if we and our franchise partners here get off with just a “black eye”. But as I said, we are using the time to identify and eliminate fundamental structural optimization potential. So we are doing our homework so that we start 2021 as well prepared as possible. For us, the coming year is all about stabilizing our business as much as possible.
Fux: Part of our homework is to focus very firmly on strategic issues. We are currently working on innovative food service concepts that we will launch at the beginning of the year, and our customers can also look forward to news on coffee. From the first quarter of 2021 onwards, we have a lot on the agenda – on the product side, we are currently working flat out.
Baumfalk: Mr. Fux, you have a lot of experience in the system gastronomy sector. Can you use this experience to make recommendations for the actions Kamps can take?
Fux: I see great synergies and potential in combining existing experience at Kamps with my experience as a systems expert. The aim will be to offer our customers the right products of excellent and consistent quality at every location in the future. This, coupled with the best service, will lead to a unique bakery experience.
Baumfalk: The catering trade has suffered severe losses, including system catering. Will it help Kamps that the company is still seen as a bakery?
Prangemeier: We found that our product range was a real strength in the crisis, because sales of the bread and rolls range were much more stable compared to other products. This development shows the important role we play as a local and basic supplier. This area will naturally remain an important pillar in the Kamps product range.
Fux: Kamps is certainly perceived still as a “classic baker” by many consumers. However, we can also see that our food service portfolio, i.e. the range of snacks and soft drinks, accounts for a significant proportion of our sales. It will therefore be important for us to learn from the experience gained during the Corona pandemic and to develop concepts that will make us crisis-proof, especially in the catering segment. Resilience is also here a superordinate keyword.
About the Kamps GmbH
Company headquarters: Schwalmtal/Germany
Branches: around 400 in Germany, two locations in the Netherlands (Roermond). The stores are operatedon a franchise basis.
Employees: approx. 3,400. Employees in the headquarters incl. production: approx. 460
Management: Thomas Prangemeier (CFO), Hans Fux (COO)
Umbrella organization: Groupe Le Duff (since 2015)
Baumfalk: Mr. Fux, your area of responsibility includes the expansion of the Kamp’s chain – is that realistic for the coming years?
Fux: Expansion not only relates to the market, but also to supply. And this is where the already mentioned food service sector plays an increasingly important role for us. For some time now, our customers have been increasingly requesting our snack range, including hot and cold beverages, in addition to the classic baked goods. This is primarily due to changes in consumer behavior. Compared to the past, consumers are increasingly “snacking” their way through the day rather than eating the classic three meals. And on the product side, coffee, for example, is highly attractive and is an integral part of the product range not only in stores with a café and seating areas. In the future, we will be devoting more attention to the food service sector and developing further target group-specific offers. There is still considerable growth potential for us here. Offers such as “Click and Collect” will play just as an important a role for us as the expansion of strategic partnerships – such as with Shell, for example. Here we are not only tapping into new customer segments, but looking towards future security. Together with the strategy of focusing more strongly on high-quality locations and strong franchise partners in the event of possible expansion, this certainly creates a scenario that will enable Kamps to grow healthily and, above all, sustainably.
Baumfalk: Kamps belongs to Le Duff, primarily an international gastronomy group. Is the internationalization of Kamps on your agenda?
Prangemeier: We have already had our first experiences with internationalization – we had bakeries in Great Britain, Saudi Arabia and the Netherlands. Today, however, our first priority is to stabilize our business in Germany so that we are prepared for the future and are crisis-proof – the keyword: resilience.
Baumfalk: Mr. Prangemeier, Mr. Fux, many thanks for the interview.
Chief Operating Officer (COO) Hans Fux
Since the beginning of August 2020, Hans Fux has been the Chief Operating Officer (COO) of Kamps GmbH. His area of responsibility includes operations, expansion and marketing. Thomas Prangemeier has been the Chief Financial Officer (CFO) of Kamps GmbH for many years. Together they have dual leadership of the company.
Hans Fux held various positions over a period of 13 years at YUM! Restaurants. His last position there was as Senior Franchise Country Manager responsible for the operational management of 155 restaurants of the brands Pizza Hut, KFC and Taco Bell. After further positions, Hans Fux developed the Subway brand in his role as Country Director after increasing franchise operated branches in the DACH region.
Hans Fux
