The secret of Mercadona's butchers to sell 90 million meatballs a year and produce 700,000 gratin dishes every week

It does not have a clearly recognizable brand, but every week it produces 700,000 gratin dishes and each year it sells 90 million meatballs and 2,500 tons of filled wheat tortillas. Much of the minced meat consumed in the country comes from its factories, which produce 87 million kilos. Mountains of sausages make Familia Martínez, a group made up of the companies Embutidos Martínez, Platos Tradicionales, Cinco Tenedores and La Pila Food, the national king of private label charcuterie and prepared dishes. All of this in the shadow of Mercadona, with whom they have been working almost exclusively since 1988.

Last year, Familia Martínez earned 440 million euros, 14% more. And most importantly: it doubled its profit to 27 million euros. It is not an isolated case, but the trail that many of the suppliers of the Valencian chain have followed: Importaco, which supplies nuts and mineral water, invoiced 9% more and tripled its profitability; RNB, a cosmetics and fragrance company responsible for the Deliplus brand, also set a turnover record and earned 60% more. Even SPB Corporación, which supplies cleaning products to the supermarket chain, came out of losses in 2023 after experiencing difficult years. Juan Roig's own chain, for its part, has managed to earn a record of more than 1,000 million due to a combination of factors: large investments in stores and logistics; debt reduction and good treasury management.

Its green letter logo reflects its downstream suppliers. Raúl Martín, corporate director of Familia Martínez, praises his great client and talks about how the two have a magnificent business relationship. The meat group, with 1,800 workers, has produced 5% more kilos and has recovered a profitability that was reduced in previous years, when the costs of raw materials (from energy to oil) hit its income statement. In the last five years they claim to have allocated 125 million to modernize the five factories they have between Madrid and Valencia and to make their processes more efficient, which they call traditional, no matter how industrialized they are. “

Retailers

and our great client, Mercadona, are doing things very well, and that leads us to a scenario that we hope to maintain this year,” explains the manager.

The origin of the meat group is in a chicken shop opened on the ground floor of the family home by Pilar Rodríguez, the mother of the current president, Francisco Martínez. He, the fourth of seven brothers, would open his own business in the 70s in the San Gregorio Market (Torrent, Valencia), to which he added a coffee machine so that his customers would be tempted to stay longer in the premises. . He developed, says the director, a different model: “he is a brilliant person, with a sense of smell. He likes to do things differently.” He began to implement an efficiency model including slaughterhouses. The first thing he supplied to Mercadona was sausage, and he also made

premium

hamburgers . “From a model similar to

spin offs

, he created different companies,” explains the manager, each one specialized in a family of products. One of them, Cinco forks, focused on elaborate dishes, especially stuffed chicken and meatballs. In 2006, Traditional Plates was born, betting on the fifth range “when no one was thinking about it.” Today it is the second of its companies by turnover, with 180 million in revenue (the sausage part generates 195 million).

There were also setbacks, such as the one carried out between 2015 and 2016 by the Martínez Loriente company, which was owned by the La Mancha company Incarlopsa, by the Martínez family and by Mercadona itself. After purchasing the shares from its partners, the group took over the entire property and then sold it to a Catalan meat group to adjust to the specialization required by the Roig chain. That was a learning experience that gave way to the ultra-specialization they have reached today, which Martín compares to the Lean system invented by Toyota for automobile production. “If we think about open oven gratins, unpasteurized lasagna, we have market shares of up to 80%. Our factories are world class.”

Everything happens thanks to the fact that Mercadona covers 27% of the distribution market, the manager estimates, so its traction power is enormous when it wants to introduce a new product.

At Familia Martínez they believe they have responded to their client with a high production model, few references – barely 160 – and very tight costs. During the talk he gives his lasagna several times as an example, a dish that Hacendado sells for 2.65 euros, made without additives. “Gratin is a category that Mercadona has created with that lasagna in a wooden tray, unpasteurized, fresh, with which we have turned the market around. The lasagna we made before was refrigerated, you had to heat it for 20 minutes, and this one is ready in two minutes.” It is true that it has a shorter shelf life of 21 days, but with the level of turnover in supermarkets it is sufficient.

In the sausage branch they say they use six times more staff. “The process is like what you would do in a butcher shop, it is stuffed manually into a casing. In that sense it makes it labor intensive. There are people who have been working with us since the 80s.”

Their challenge now is to maintain that growth, but they are not even considering selling outside of Roig's group. Could that end up being a weakness? The manager does not see it that way, as he thinks that the Portuguese market, into which the Spanish group is entering, offers a greater playing field. Furthermore, the private label, far from having its days numbered, is stronger than ever when prices tighten consumers' pockets. “In sausages we have made investments in drying rooms. Minced meat is working very well, and the two categories of the fifth range, both gratin and roast, too. “The prepared dishes part has a very strong growth trajectory.”

They do not lose sight of other own-brand products that they make in La Pila, which has a turnover of 37 million: from the bacon that Telepizza's pizzas have or the chicken that Alsea (Dominos or Burger King) includes in their salads. As for family succession, it seems guaranteed: in 2013 Paco Martínez Martínez, the first of the president's five children, joined the company and in 2017 he became CEO, giving way to the third generation. Another family member, Eduardo Martínez, is also in the management.

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