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Paris-based Trace One has worked with retailers and manufacturers worldwide in the consumer packaged goods industry to help all ends of the supply chain find better ways to do business. The company, founded in 2000, has business with 12 of the top 25 global retailers, and 12,500 manufacturers in more than 100 countries.
But that wasn’t quite enough. Although the European and international markets were robust, the company had yet to make serious inroads in the U.S. So CEO Jerome Malavoy and COO Marc Bonnamour have moved to the company new U.S. headquarters in Boston after acquiring Agentrics PLM at the end of 2011. Bonnamour moved to Boston in February and Malavoy in April. After time over the summer to get the executive team in place, the company officially announced the move in mid-September.
Malavoy talked with PLBuyer editor Chris Freeman about the reasons behind the move, the company’s emphasis on the private label industry, and Malavoy’s goals for the future.
PLBuyer: You had your choice of places to settle in the U.S. Why Boston?
Jerome Malavoy: So our first choice was East Coast or West Coast. As we still are a small company, it would be necessary to be able to control what is happening in Spain, the UK, France, Germany, as well as the U.S. I have a conference call every day with Europe, and with the West Coast time, that would be too hard. So it was East Coast.
Now, it could have been New York or Boston. Boston is the software city of the East Coast, and we are in competition for recruiting very technical people with
Google, Amazon, Microsoft, so if it’s not close to the universities it’s very difficult to make sure we have the best process for recruiting people.
PLB: How long has the transition taken since the acquisition of Agentrics?
Malavoy: We are already working with seven of the top U.S. retailers and 3,000 manufacturers, so we are not a beginner. It is not a question of transition, but reshaping the business to give it more potential for growth.
We restructured what is exactly the offer on the U.S. market, and tried to offer what Agentrics had but what we knew, too. We have launched a huge recruitment program of salespeople and marketing people. We have really fixed the big technical issues that we had to solve because there were different types of products, and we don’t want to change the products the companies were working with. We have to adapt ourselves and bring you things with the right interface.
PLB: That sounds like a lot of work. Was it?
Malavoy: (with a slight chuckle) French people are used to working 12 hours a day, so we are accustomed to working a lot.
PLB: What sets Trace One’s services apart? What is special about its private label focus?
Malavoy: We are not a PLM (product lifestyle management service) like any other. We are a private label PLM. We really are a private label PLM focusing on the consumer packaged goods market and the private label itself, because it’s a very specific collaboration. You have to develop an application, one the retailers and his team can use – and it’s a very small team usually – and it can work with 50 or 200 or sometimes 1,000 manufacturers having 2,000 products. This is why our PLM is a private label PLM. A Trace One private label PLM.
We have divided our product in several parts. The first one is the product development/lifecycle manager. In this is many different things which project range, supply management, product quality, testing, and more.
Then we have the second thing, which is sourcing and supplier compliance management. This is mainly addressing, very often the nonfood products and apparel, but also retailers who are sourcing a lot of things from Asia. They have thousands and thousands of SKUs, but they need a special tool that is different from food.
We have another one that is Trace One factory management, then national brand product information.
PLB: What makes your offering different than another PLM focused on the CPG market?
Malavoy: The biggest part of the offer is … the way we understand the customer base and answer to the customer base.
It is a key customer base we are addressing. The first thing in terms of the customer is the need to constantly adapt the product range in private label to the market needs, but also to the competition. The competition of the CPG companies, like Coca-Cola, Proctor & Gamble, L’Oreal. The first thing is, if I am a retailer, how fast can I develop my product? How quick is it on the market? What is the time to market? And what is the time to competition? If you are always late, you are losing half the investment you have done. So adapting the range very quickly to stick to the market needs. It’s time to market, and time to competition.
The second big thing is, it’s good to do business, but it’s very important to do it without too big of risks. It’s very useful to be in a position to manage all the things which are linked to product safety and regulation constraints, which is now a very fast-moving environment. Product safety is a very key issue because customers are all connected, and if you have a small group of people unsatisfied, it spreads very quickly through social networks and such. And if there is a food crisis, it is impossible to take the risk of that type of thing because what is your brand then? Trust is the banner, and therefore the loyalty to the stores.
How, if you are a retailer, how do you manage a long tail of 500 different manufacturers to deliver without risk, with the best practices, with enough for the consumers? It’s necessary to have on board everybody as quickly as possible, to train people and make sure … the short range of private label production needs to absolutely develop with manufacturers best practices (where) you can prove you have done your best efforts to comply with safety and regulations. This is very difficult.
What we say is we are unique. We are probably, for the time being, we have the best team in the world, because we have experience with so many retailers in the
UK, Spain, France, Germany, Belgium. We are not an IT company. We are a business solutions company, we are a private label CPG development company. The knowledge we have captured during all these years is unique.
PLB: What can you bring to the U.S. market after spending more than a decade building the business, primarily in Europe?
Malavoy: The success of the company is that we have developed this in Europe, and we will do the same in the U.S. It’s very different from what everybody else does. In our system, what we want to develop is something to give benefits to the manufacturers when they’re working on those types of solutions. Our DNA is to bring benefits to all the stakeholders of the chain, and at the end of it, for the customer.
PLB: What do you hope is the future of Trace One in the U.S.?
Malavoy: We’re very happy to be challenged and to explain our differentiation plans, which are really concrete. And it’s fascinating, after developing this company for 10 years in Europe, to change and come here in this country, where entrepreneurship is so accepted. It’s fascinating, and I’m very happy to have this chance.
They always talk about the American dream. I would like to become the private label dream.