Paris | Reuters –– French agricultural group InVivo is looking to acquire a wine distributor in the U.S. and could open up to 200 food shops in its home market as part of plans to double in size within a decade, InVivo’s CEO said on Tuesday.
InVivo entered the wine sector this year through the acquisition of Bordeaux wine merchant Cordier Mestrezat and an alliance with France’s largest wine co-operative, Vinadeis, in the latest stage of a group overhaul under CEO Thierry Blandinieres.
The priority for the newly created InVivo Wine division, which aims to generate 500 million euros (C$751 million) in annual sales within five years, is to break into the lucrative U.S. sector via an acquisition “as soon as possible”, Blandinieres told reporters.
“Our mission is to go and reconquer the U.S. market,” he said. “The French have let the United States go.”
InVivo aims to use Cordier as a brand in the U.S., where consumers are guided by grape varieties rather than individual chateaux, and where the average bottle price is around US$7 compared to two to three euros (C$3-$4.50) in French supermarkets, Blandinieres said.
He declined to cite potential U.S. targets but said he would like to have a presence in California.
In France, InVivo sees scope to develop 200 food stores within five years under the “Frais d’Ici” banner it is testing at two outlets, Blandinieres said.
The fresh-food concept, based around local products supplied by farming co-operatives, would be expanded using space next to some of InVivo’s Gamm Vert garden retail stores, and could generate one billion euros in annual sales, assuming five million in sales per outlet, he said.
InVivo, made up of more than 200 farmer-owned cooperatives, reported a sharp rise in profits for its 2014-15 financial year that ended on June 30, with earnings before interest, tax, depreciation and amortisation (EBITDA) reaching 106.7 million euros against 64 million the previous year.
The group’s animal health and nutrition division, which has made a series of overseas acquisitions, contributed about half of the earnings rise, while the grain trading business returned to a gross profit after a loss of 15 million euros the prior year, InVivo said.
Group sales were stable at 5.7 billion euros.
In grain trading, InVivo continues to pursue overseas alliances and announced agreements with fellow cooperative groups Aca in Argentina and Zen-noh in Japan with a view to sharing expertise and developing trading opportunities.
The group, which targets a further increase of 20 million euros in EBITDA in 2015-16, reiterated it will consider bringing in minority shareholders for other divisions after opening up the capital of its animal health unit.
— Reporting for Reuters by Gus Trompiz in Paris.