Zéfal talks export growth and investment on high demand
Having modernised its production through a series of investments made during the Covid era, France’s Zéfal has laid a foundation to continue some impressive growth rates. CI.N speaks to Managing Director Aurélien Brunet for more insight…
A proudly French company, Zéfal manufactures some 60% of its goods domestically, as backed up by a workforce of over 110 staff.
Where the pandemic made global sourcing a headache for many suppliers, Zéfal’s inherently strong European operation ticked along with the brother duo Matthieu and Aurélien Brunet steering a growth rate of 25% up by the close of Covid’s first appearance in 2020 and a revenue of €14.2 million, up from €11 million the year prior. For 2021 turnover was well on course for a new milestone of €20 million, which boosts the rate to 40%. While exports are now a majority chunk of the business at 70%, it is European trade driving the progression with a now 45% share with that trade estimated to be up 35% like-for-like.
“Exports are a main part of the Zéfal growth,” starts Managing Director, Aurélien Brunet. “We export around 70% of turnover, but just a few years ago this was 60%. We had some progress outside Europe to shout about too, though in the USA there is room for growth and some Asian markets would represent a good opportunity to progress the brand further. Canada and Australia have distribution established that’s now doing well, so the brand is very much a global player.”
The brothers at the helm of the company are finely attuned to each role within the company, with Matthew Brunet a big long-distance gravel and road rider. “He feeds in top-down ideas as a product enthusiast,” says Aurélien.
It’s no surprise to learn, then, that launching in the next few months will be new mudguards for gravel bikes, a cycling trend that has outperformed much of the marketplace. Alongside this, to facilitate more adventure by bike, Zéfal will keep increasing its cycle luggage options to cater for a bikepacking and tour market. Alongside this, we’re told the main focus for 2022 will be a bet that commuting accessories will prove in demand as European commuter numbers swell on the back of favourable legislation and infrastructure gains on the mainland. “Mirrors are a trending product here in France,” says Aurélien, “So, we are launching three mirrors this year, plus new bells and locks.”
On the subject of quite significant headlines stemming from decisions in the European Parliament to prioritise active travel means Aurélien says the drive towards goals such as Net Zero can only be a good thing for the market as a whole.
“First, I would say that the political change on cycling is encouraging. Commuters who were not willing to spend before are now trying electric bikes and their perception of what a bicycle can do has changed. We are seeing most of these potential customers understanding the benefits of spending more to enhance their experience and, ultimately, cycle more and for more hours per day. People are asking themselves now if they want to make the change and for those that try to change most keep at least some use that was not previously there. In Paris it is notable that less subway usage has been directly linked this to growth in bikes, especially on one key road using same artery as the underground.”
With demand comes the inevitable subject of supply. When asked how steady the stream of parts and accessories coming from the production lines are Aurélien strikes a confident tone in Zéfal’s capability. His counterbalance to this is a return to high inventory levels with many distributors, meaning that production runs will come at a sensible pace.
“It’s hard to predict 2022. We are seeing inventory returning to high levels again at distributors across broad, so sales slowed at end of 2021. At the same time distributors are all stocking more than they did for the time of year, comparatively. I’m optimistic, but at the same time cautious as the last two years I have actually been wrong on my guesswork. We aim not to overdo the risk and would prefer steady turnover growth on the back of a doubling of turnover.”
Running alongside that increase in stock taking came some quite inevitable price rises compounded by runaway shipping costs, but also the hikes to raw material costs. Aurélien describes the action taken to keep prices accessible for the consumer as “reasonable” and notes that investments made helped steady the ship. Among these were new injection molding machinery, enabling an increased production capacity on key lines like mudguards, as well as blowing machinery for bottle products.
“We’ve taken advantage of the fact that some distributors or competitors could not supply the market as well. We consistently seemed to have higher stock; not perfect, but ahead of the curve,” he says, adding that for the past two years the factories have added weekend shifts and some night shifts too, such has been the demand.
Compounding the demand for the family-run business’s goods, we’re told those newer customers who were ordering quickly warmed to the brand.
“A lot of customers have acknowledged that Zéfal did a good job under difficult conditions and the products were selling through well with the consumer, so the reorder rate was quite good. We took the chance to improved our products with new feedback too, so over the past few years our brand is further recognised internationally as one delivering quality,” says Aurélien.
With the subject of reshoring so prominent in the industry at present there exists a curiosity of whether 60% could become 70%, but certain criteria must be met.
“If the cost difference is limited, say 10% to 15%, we invest in France. Over that cost it is too much to reach a competitive price at retail. Bottles cages came back to our local production in last few years, plus high-end track pumps. We are looking at bags as a possibility, but it’s not our knowhow yet so the skills must be acquired. The labour cost difference also does remain large when compared to our Asian sourcing,” he adds.
When it comes to the luggage, the UK is singled out as a particularly receptive market. The off-road cycling culture that exists has given rise to promising sales in a new category. While Zéfal may be best known for some of its fenders deflecting mud, the aggressive riding styles the characterise UK mountain biking and off road cycling have prompted exploration of the frame protection category too. This means shops will now also find these stickers in the catalogue.
All things considered, sales in the UK have more than doubled thanks to the support of distributors Bob Elliot and Chicken Cyclekit.
“This territory has been more dynamic than the others. This year has undoubtedly been a bit tougher due to the Brexit challenge, but I think we had resolved this after a few shipments. Small price increases came as a result, but we took our share of that too,” he concludes.
In the background to a steady flow of product development comes the news that Zéfal are, like many others, on the cusp of communicating a sustainability strategy that will see all of the aforementioned goods undergo a deep assessment of production impact; though Aurélien said an eight-point plan is to be fine-tuned before the market learns more detail.
UK ZÉFAL DISTRIBUTORS
BOB ELLIOT & CO. LTD
t 01772 459887
www.bob-elliot.co.uk
Unit C4 Binary Court, Matrix Park, Western Avenue, Buckshaw Village, Chorley. PR7 7NB
CHICKEN CYCLEKIT
t 01525 381347
www.chickencyclekit.co.uk
Unit B2, Cherrycourt Way, Leighton Buzzard, LU7 4UH
