Grupo Nudisco: Growth Supported by Alternative Financing

Grupo Nudisco is in the midst of a growth and expansion process that has significantly increased the presence of its Economy Cash and Kuups supermarkets—two successful brands and models in the highly competitive food distribution market. The pandemic has also been a turning point for this Valencian company, which has turned to new financing solutions to execute its ambitious plans. Its CFO, Aarón Mira, details the journey and the collaboration with Kaizen Consulting to achieve their goals.

– The pandemic affected all sectors, but it posed a particular challenge for the food sector. How did Grupo Nudisco handle it?

– Our group has two areas: canned goods distribution and supermarkets. Half of the canned goods revenue comes from the horeca channel, which naturally plummeted during the lockdown. However, the retail segment saw exponential growth: sales in our stores skyrocketed, with increased demand and new customers at both Economy Cash supermarkets and Kuups convenience stores. This surge prompted us to embark on a multi-year expansion phase.

– How has the expansion been?

– In 2021, we opened 12 new large Economy Cash supermarkets. Today, our network consists of 58 establishments, and we are planning six new large-format openings. We will also continue to focus on the smaller supermarket format with the Kuups brand, which offers a shorter amortization period and is easier to manage. These are stores that capitalize on weekend sales and where we see a growth niche.

– Financing has become more difficult after the pandemic. How has this affected you?

– The pandemic has brought changes at all levels, and the financial sector is no exception. The concentration of financial institutions has led to a more imposing and stringent position from traditional banks, which are now more focused on maximizing profits through product sales. Major players have continued to support and advance with us, but other banks have adopted a more conservative risk approach. When the initial worst phase of the pandemic passed, we experienced a significant activity increase and noticed that traditional banks were not evolving in the same way.

– And what was the solution?

– Our business group had contacts with José Roca, the managing partner of Kaizen Consulting, and we found that the services they offered aligned with our needs. Nudisco experienced a period of expansion in 2021 centered on opening new establishments, a process that is consolidating and will continue. In this second phase of expansion, we saw the benefit of turning to alternative financing. We started working together, and the experience has been very positive. We have continued to grow, maintaining excellent communication with Kaizen Consulting and progressing together by signing deals. They have been very helpful in our expansion, as most of the financing they secured for us is aimed at expanding with these large store openings, and we are on the right track.

– How has alternative banking helped?

– I come from banking and was familiar with alternative banking products; I knew they would be useful for financing the opening of new establishments. In alternative banking, you find great professionals who have transitioned from conventional banking, as it has become a refuge for many skilled bankers, while traditional banking has become more commercially focused, neglecting business advisory. With Kaizen Consulting, which quickly understands your needs and supports you throughout the process, you find tailored products and the advisory that the market now demands. This is increasingly overlooked in traditional banking.

– Are you satisfied with the results?

– Yes, very much so. I had high expectations that have been confirmed. We have bet on a winning horse for financing, with a very rapid return on the invested time. We were looking for a consultancy that would support us in the financial aspect, not just in securing financing, and we found that in Kaizen Consulting. They are also working with us on the business plan: the document that serves as a roadmap to help us reach our destination, setting times and milestones in the process. We are now applying the same model to finance each new supermarket opening. We are also working on making a leap with more ambitious, unique financing.

– How can you grow in such a competitive sector, especially in the Valencian Community?

– It is certainly the toughest place to open a supermarket chain. But our CEO is known for his resilience: he manages with a very hands-on approach, which the entire management team has adopted. Miguel Ángel Alcaraz took over the Vidal supermarkets in 2011, and we have grown from thirteen stores to 58, concentrated in Valencia and Alicante. Outside these provinces, there are two in Castellón, two in Murcia, one in Albacete, and one in Tarragona. He is an entrepreneur with a background in canned goods distribution, which remains another pillar of Grupo Nudisco, and he ventured into supermarkets due to the synergies he saw. He quickly realized that size was important and drove rapid expansion because reaching a certain number of stores is essential for negotiating prices with major food distributors. Management is key in this business: the more certainty you have, the better you can anticipate and control to achieve higher margins. It was crucial to grow to enter the world of top brands and deal directly with suppliers.

– A successful dual model with two brands.

– Yes, but in both, we seek the same for our customers: good quality at competitive prices. Economy Cash is a large supermarket where we manage fresh products exceptionally well, which sets us apart: we have a cutting room where between 50 and 100 pork carcasses are processed daily, and we prepare the technical cuts, from loin to sausages. Last year, the OCU highlighted us as one of the cheapest shopping baskets in the Valencian Community due to our excellent prices. Our Kuups stores are convenience stores, and here we look for very specific locations, certain neighborhoods, and qualities compared to the competition. Our main advantage is proximity, the ability to open on Sundays, and offering a more competitive price than other stores.

– How will the rise in prices affect the shopping basket?

– We are always working to prevent customers from experiencing price increases, so they are not affected by rising raw material, electricity, or transportation costs. We strive to ensure the best procurement to avoid this, and our goal is always for customers to find the best prices.

– What are your future plans?

– The food sector is currently a refuge for investments. We continuously receive offers from investment funds interested in participating in our company; the market is very keen on obtaining certain returns at a reasonable interest rate. At Grupo Nudisco, we know that our expansion plan is never-ending because we are confident that our CEO, Miguel Ángel Alcaraz, will always have new projects to continue growing. He is one of those self-made entrepreneurs who is always looking for new business lines. In the short term, we want to consolidate Economy Cash and focus on the Kuups store format. We don’t set limits for ourselves.

Comparte este artículo