Malvón: the match by match of the king of Argentine empanadas

Fast food seems to have no limits.

Argentine empanadas have been the penultimate to reach the market and it is a Spanish company, Malvón, the market leader.

With a production of 12 million empanadas last year and 92 stores - 89 in Spain and 3 in Oporto (Portugal) -, it had a turnover of 16.4 million euros in 2023, which represents a growth of 14%.

The history and rapid development of this company have a lot to do with chance and the entrepreneurial spirit of its founders, Alejandro Polo, current CEO, and his partner David Alvado.

In 2000, at less than 20 years old, these two boys entered the mobile phone fever with the sale of these devices and then moved on to the brick market in Tarragona and the motorhome business.

And this restless spirit came together with chance: they decided to support an Argentine friend, Claudia, who made some exquisite cakes.

She financed a pastry shop on Hilarión Eslava Street in Madrid.

“In this store we found that 90% of the turnover came from Argentine empanadas and not from sweets.

So, we got rid of the other businesses, closed the store and reopened it as an empanada store in 2017. We started opening new stores;

three more in 2018, and in 2019 we already had 15″, explains Alejandro Polo.

The name of the company also comes from her Argentine friend: Malvón was a type of geranium that she had in her house and it strongly resisted the onslaught of the weather.

The rapid development of this business was achieved thanks to a franchise system.

The Malvón company is the direct owner of 30% of the stores, while the remaining 70% are operated under that formula.

Curiously, a former director of Burger King is the largest franchisee, with 25 stores of these Argentine empanadas.

The weight between own stores and franchises is intended to be maintained for the Spanish market, but not in its international expansion.

In the month of February they opened the first Malvón store in the capital of Slovenia (Ljubljana) through a master franchisee who approached them.

In this business model, the franchisor grants the franchisee the right to operate their business in a large territory, such as a region or a country.

A model that they also want to use to open stores in the Canary Islands.

They are currently in talks with master franchisees to expand their business in France, Italy and Germany.

“They have been interested in our product, and it is better that they bring it directly to them because they know their market and the tastes of their customers better,” explains this 41-year-old from Madrid.

They have also received interest from investors from Canada and the United States, but, for now, they rule it out, since they want to have the production of the empanadas centralized in Spain and transportation could be a problem.

The CEO of Malvón expects to close 2024 with a turnover of 20 million euros with the expansion of the brand.

Without a doubt, a pending issue is to grow in Catalonia, a region with more knowledge of this product where they currently have only seven stores compared to the 49 in Madrid.

“We also have an interesting exclusivity agreement with El Corte Inglés, with 10 stores open in their establishments where they give us good locations.”

And he adds: “Then there are more anecdotal things, since we are present at the Cívitas Metropolitano stadium of Atlético de Madrid.

They also came looking for us to open a store and, it is said, it was the idea of ​​the coach's wife, Diego Pablo Simeone,” he comments.

For Polo, success depends largely on the location of the store, which they directly approve to their franchisees.

“It is worth being in a more central location even if the cost of renting the premises is higher, since the customer repetition rate is higher.

In addition, this formula allows us to have a more recurring business compared to other chains more focused on the tourism sector.”

Furthermore, he rules out the entry of money from financial funds into the company's shareholding: “We would only be interested in an industrial partner, not just a financial one,” he explains.

Polo and Alvado are the owners of 80% of Malvón's capital, and the other 20% is distributed between two shareholders, one of them, Javier Díaz, involved in the management of the company.

The need for money to grow was not pressing at first.

They invested in the empanada business with the resources from their previous businesses and, in addition, “Malvón was profitable from the first year and until 2021 we were self-financing.”

And he adds: “In these years we have not distributed a dividend and we reinvest all the profits because there is nothing more profitable.”

As of 2021, they began to work with bank financing, although Polo does not rule out other types of ways to raise resources in the future if necessary.

This year they have made a large investment of six million euros with the construction of a factory in Madrid that has 5,000 square meters that gives them the possibility of continuing to grow.

“The objective is to have the capacity to supply empanadas in the expansion process in which we are immersed.

We produce all the empanadas, whether we sell them here, in Portugal or in Slovenia or, in the future, in Germany, France or Italy.

The idea is to have total control of production,” explains Alejandro Polo.

The empanadas are deep-frozen raw and then distributed to the stores, which bake twice daily, one in the morning and one in the afternoon.

500 employees

Malvón – own stores and franchisees – employs 500 people, of which 60% are women.

Without a doubt, one of the most curious jobs is that of the so-called repulgadores, who are dedicated to closing Argentine empanadas by hand, something that in this world is linked to a higher quality of the product compared to mechanical closure.

“We are in the gourmet category with a quality product, and that is where we compete.

We are currently leaders in Spain, but we have great competition with Las Muns in Barcelona where they have 30 stores and are in the same segment of gourmet quality empanadas.

Then there are many small ones, some self-employed, and others low-cost that are not in our category and offer inferior quality,” explains Alejando Polo.

The founder of Malvón considers that the Argentine empanada still has a long way to go because it is not a product well known to the general public.

His great competitor within fast food is pizza and he gives as an example that when 60 years ago there was an explosion of empanada shops in Argentina, “pizzerias in this country began to introduce empanadas because it took away their market share.

Of course, we are not planning to incorporate pizzas,” he concludes.

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