Competing against Goliath

Red Bull. No other fast-moving consumer product has a slogan that is so well known. Nevertheless, the success of the Belgian importer Jet Import has nothing to do with wings. Stefaan Bettens, CEO and grandson of the founder, Bettens, leads the business with dedication and love. Growth in times of crisis can’t be achieved by dedication only. ‘Growth,’ according to the CEO ‘is a craft, an art.’ You need quite a bit of nerve to distribute a Mexican liquid called Corona in clear glass bottles in the beer country par excellence. It’s not the done thing for a Belgian to distribute Corona. And yet... ‘Now and again you need some guts and staying power as an entrepreneur,’ says Stefaan Bettens. ‘Meanwhile Corona has become established and the Mexican beer is selling second best in the world.’

The pressure of the crisis

Bettens: ‘The segment in which we operate is growing. Perhaps we would have grown more rapidly without the crisis, but even now we’re achieving a significant extra number. It is after all ‘affordable luxury’. Consumers will economise on basic goods but still want to treat themselves now and again. They don’t economise on our products. In any case our consumers are by and large situated in the more well-to-do class. That is also part of our strategy. We focus on the top segment. It’s also fashionable nowadays, for example, to offer refreshments other than the traditional coca-cola and soft drinks at a party. There is also another phenomenon that is manifesting itself, not only in Belgium nor in consumer goods only. Namely, the sale of goods that are seen as affordable luxuries rarely decreases in times of economic recession. It has to do with status and image. Also in Africa designer trainers are sold even where famine is threatening. The consumer chooses what to spend his money on and often chooses luxury items instead of basic products.’ Taken together, all these things mean that we are still growing this year in the current economic climate. Of course there also are a few factors unrelated to all this. It’s been a hot summer and Belgians don’t drink water from the tap.’

Razor-sharp strategy

Like everywhere else, customers are paying less and less quickly, though it’s not causing any immediate problems. Financially the company is flexible enough to withstand that pressure. Attracting external funds is therefore not even on the agenda. On the contrary, extra staff members were recruited this year, so additional costs were incurred. Bettens: ‘Although, given the enormous rise in the price index, this wasn’t an easy year in terms of labour cost. As an employer you just have to take it when there’s a sudden policy decision to put the index up 4,5 per cent. For many companies this increase made the difference between being in the black or in the red. On the one hand it’s assumed that it’s good for the employee to be able to count on a wage increase like that, but combined with the difficult and sluggish economic climate which we’re in at the moment it will work out negatively for the employee in the long run. This increase in labour cost causes bankruptcies and therefore dismissals as well.’

Already over the crisis

This crisis is well and truly here and cannot be underestimated or played down. The strategy of Jet Import and the target group which their products are aimed at seems to put the company out of great danger. That wasn’t always the case. Bettens: ‘We experienced our big crisis in the 1980s. As the manufacturer of 7up we were too small to compete against giants like Coca-Cola and Inbev. We had two options: close down or look for a creative solution. Globalisation – which everybody talks about today – actually came about during that time. The market had always been located in little Belgium, but suddenly the whole world was the market. We changed tack and switched to the role of importer. We could keep our people in their jobs, save our business and build up a new activity. As an importer you can keep an enormous turnover going without a lot of people. With the 49 employees I have at present my company has a turnover of about 70 million Euros. Also, my company is structured in such a way that I can adjust my activities. To achieve that you need to be very conscious about the way you handle the talent in your organisation. Apart from thorough training when they start, I give employees the opportunity to do and learn as many different jobs as possible. They expand their own areas of expertise and become more valuable in terms of the job market. In our organisation they become multifunctional. If it then becomes necessary to adjust, changing course is easy.’

Fixing the system

To be successful you need a good strategy, a thorough vision, or be able to cope creatively with the limitations that are part and parcel of the manager’s universe and field of action. Bettens: ‘In a small organisation you have quite a lot of freedom. For a lot of entrepreneurs it becomes limiting to grow beyond 50 employees. I mean, having opposition within your own company can slow you down enormously. Also the fact that Belgium is one of the few countries in the world where the government uses price indexing can have a lethal effect on entrepreneurship. The enormous wage bill and employer contributions are also no incentive to employ people and even though the government makes an effort and we have the good fortune to live and work in a country with a decent social framework, the regulations still do restrict entrepreneurship. Production is practically impossible in Belgium. We are a country of small entrepreneurs, local initiatives, bakers and self-employed people with small businesses, but the traditional sectors which contribute intensively to the future of this country are under a lot of pressure. They are less and less able to employ blue-collar workers. This has repercussions also for the education system, which isn’t producing too many great geniuses at the moment. It’s essential to go all out to get the best and the most from young people. That is a social task for everyone in business, but also for government. Entrepreneurs must make the most of their employees’ talents by stimulating, motivating and training them. Personal coaching is essential. It can after all take years before you discover what you’re really good at. Job hopping is too often described as something negative. Changing jobs in fairly quick succession could mean that you discover at a relatively young age what you’re really good at. Then you become an asset for an organisation. It’s very important to make an employee reflect on how they can still be worth their keep at the age of forty-five. Look to the future.’

Golden advice

These are no easy times for starting a business. Those who still want to go into business under these difficult conditions could use the advice of a successful entrepreneur. Stefaan Bettens:

- ‘Avoid high overheads. They limit your freedom to invest the proceeds of your organisation.’

- ‘Make sure you market a quality product. As long as your product isn’t quite up to scratch, don’t launch it. A quality product distinguishes itself significantly from its competitors. You have to be different and better.’

- You must be able to think on your feet. Adaptability, knowledge of languages and customer friendliness are indispensable for his.’