Business alliance formed in Andalucía as costs soar for one of Spain's most popular takeaways

In the last five years, the price of a kilo of chicken meat has risen by more than 40 per cent, which has affected families and businesses alike. Francisco Trujillo, owner of six rotisseries in Granada province, sells more than 1,300 roast chickens every week. What Trujillo realised when he spoke to his colleagues in the sector - more colleagues than competitors - is that they were all struggling with rising costs in a sector with "very narrow" margins. The simultaneous increase in costs of chickens, as well as energy, oil and potatoes, has spelled disaster for businesses.

Trujillo came up with the idea of bringing together his colleagues in Granada and creating a central purchasing centre that concentrates the purchases of all the small chicken rotisseries. When it comes to negotiating with suppliers, buying 1,000 chickens is not the same as buying 100,000. It is a classic example of strength in numbers. Francisco discussed the idea with Lucas Santos who runs the Doña Juana restaurant in Huétor Vega, famous for its roast chickens and he didn't think twice about Francisco's idea.

After months of "intense" meetings with businesses in the sector, and with the solid foundations of a market study, a growth and viability plan, the Central de Compras Asadores de Pollos S. L. has been established; a company driven by ten owners of rotisseries in Granada that is ready to mark a turning point for the sector in Spain. "We have managed to transmit the vision that a union is necessary to centralise the purchase of products and services for our businesses and we are about to reach 60 members in Andalucía", explain the promoters.

Chicken rotisseries are mainly family businesses, employing an average of four workers. "It is the Spanish takeaway par excellence. They are the healthiest takeaway food on the market, but they also offer not only roast chicken, but also a wide variety of meals at affordable prices that help to sustain local economies," say the entrepreneurs.

However, it is a business model which is being threatened by the rising costs of all raw materials. For example, they point out that electricity bills tripled in 2022 and have not returned to the levels of that year, and they also suffer, like any business, from the rise in labour costs, but they also have to bear specific costs that have tightened the markets in their sector.

"Our main product, chicken, has risen by one euro per kilo since 2020. This means that we chicken rotisseries have less bargaining power when buying on our own," say the promoters of the Central de Compras.

Potatoes, another essential item for the sector, have also doubled in price in recent years "which can be explained by the situation in Holland, the main manufacturer of cut and processed potatoes in Europe, which has been experiencing problems in terms of supplying our continent".

The price of oil has gone up due to the war in Ukraine and has not stabilised since, and the list goes on and on with packaging, detergents and so on "The increasingly limited human resources, with the need to recruit qualified personnel for the tasks and schedules of our companies are yet another complication for the sector", the promoters point out.

Both Trujillo and Santos are very happy with the creation of their central purchasing centre, which is an "extraordinary milestone" for the sector. "Great synergies can be created, allowing them to obtain a more competitive price in the purchase of the 'core' products and services of their business. We will be able to improve contracts for electricity, gas, diesel, the hiring of staff for peak sales, machinery, legal, health and financial advice, and a host of other advantages that make this union essential for a sector that has tiny margins that are heavily hit by rising prices," they argue.

It is also an advantage for suppliers, they say, as "inefficiencies in the value chain are eliminated, they will have manufacturing forecasts and assured contracts that will benefit them to better adjust their processes".

In addition, they have managed to add to the project as a strategic collaborator the Granada-based company Grill & Chicken SL, specialists in the sector who advise and collaborate with companies in northern Europe and in Spain and supply them with products, as well as having experts in purchasing, finance, logistics, R&D&I and operations.

The company, based in Otura, has professionals with more than 25 years of experience in the sector, international positioning and is a 'star signing' for the new purchasing centre, which is from Granada but has a national vocation.

"The more integrated we are, the more competitive advantages we will have. We invite everyone who has a poultry farm to join the Central to benefit from competitive improvements. It's not about competition, it's about alliances. Our competitors are the fast food take-aways of large multinationals with a concentration of purchases that allow them to drive down sales prices," argues Trujillo.

Santos would like to give special thanks to the sixty restaurants that have already joined the initiative. "None of this would be possible without their support," he says. "We have the opportunity to eliminate inefficiencies in the value chain, creating an alliance that improves the competitiveness and market positioning of chicken broilers. If we don't join together, sooner or later the market will leave us out in the cold with large franchises adjusting margins and operations to an optimal level that is unattainable for the small business," he insists.

The Granada-based company has already started a membership recruitment campaign in Andalucía and its ambition is to provide services throughout Spain. "With a market share of more than 30 per cent, Central de Compras de Asadores de Pollos SL hopes to mark a before and after in the sector, always seeking to improve and innovate to meet the needs of the consumer. The opportunity is unique and the expectations are immense," they conclude.