Franck (company)

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==114 years of tradition==

The company Franck d.d. was established in 1892 in Zagreb, as part of the German multinational company "Heinrich Franck Sohne". The name Franck has been retained throughout the company's entire history. Through privatisation, which was carried out in 1992, it became a joint stock company in a 100% private ownership. Up until World War II, the core business of Franck was the production of coffee substitutes, while over the last five decades, the focus has shifted to coffee, and also includes teas, snack products, seasonings, baking condiments, sugars and side dishes: an assortment becoming of a market leader! In over 114 years of operations, despite changing political maps of the world and stringent competition from foreign and domestic companies, Franck has succeeded in preserving its name and image, and in defending its position as leader on the Croatian market for coffee, tea, snack and other food products. Franck products are well known and recognized all over Croatia and Europe. They have developed by the knowledge acquired through generations, by highly developed technology, equipped with a contemporary design and accompanied by a special marketing approach. For a number of years, Franck has been systematically implementing the programme of transformation in all its segments, from technical and technological upgrading, increase of its production quality, expansion of the assortment of products, improvements to design, media presentations, inner organization improvement, information support technology, ensuring business information is up-to-date, strong financial discipline in cost control, payment of suppliers and particularly in collecting receivables. The excellent quality of Franck products is crowned with a long-standing cooperation of the company Franck with its consumers, which was confirmed with numerous awards and recognitions, including the assigning of three "Croatian Quality" marks to Franck products.

[edit] How it all began

In the private files of Johann Heinrich Franck, there is this short hand-written sentence: "1827: Erster Versuch der Fabrikation von Cichorie" (1827: first trials to produce chicory in the factory). The first attempt by the then thirty-five year old Johann H. Franck to process chicory in the factory into a coffee substitute was described in this short, simple sentence, however, he made history as did the list of authors of this memo. "1827: Erster Versuch der Fabrikation von Cichorie" (1827: first trials to produce chicory in the factory). The first attempt by the then thirty-five year old Johann H. Franck to process chicory in the factory into a coffee substitute was described in this short, simple sentence, however, he made history as did the list of authors of this memo. The stylised list of surnames became the trademark of the Franck Company. Above the list was an illustration of a wooden handheld coffee mill, half in profile, while at one time in its history, the company was also represented with a lion, borrowed from the crest of the city. The longest lasting name among them was Franck. The headquarters of the company, which still preserves this name, is located in Zagreb, Croatia. In the meantime, the name Franck has come to represent a great international business tradition. Though he was a visionary and founder of the company, Johann Heinrich certainly could not have imaged the extent of his enterprise. In his youth, Johann was no more than a mere object and victim of the stormy historical events. Over time, Franck evolved into a creator of great changes in civilization. These were such great principles that even his successors at the head of Franck, right up to today's director in Zagreb have persistently followed his business motto: In order to survive, an ambitious company must grow. Growth is never simply a physical expansion, it always searching for new business solutions, defining the directions of economic development, which follow the economic mainstream. With these kinds of ideas, the Franck company was deemed to re-write history from the very start. Johann brought back a number of notes, remarks and observations with him from France. Among them, he kept a precise record of how the French farmers roasted chicory root to make a warm, aromatic and very robust drink. This was no offhanded sketch. Johann's mind worked very quickly and his imagination would turn everyday life into unusual visions. Chicory, he thought, could quickly become a strategic raw material. Johann Heinrich Franck began the great family business saga in Bavaria, which would soon transform into the global expansion of the Franck Company. Historians have described the early history of the company as a simple "race of chicory, barley malt and coffee". Today it is obvious just what advantage coffee has over its rivals in the world of hot drinks, and thus it is logical that the modern company Franck found its success at the end of the last millennium and the beginning of this one with a top quality mixture of real coffees and perfectly harmonized espresso products. However, two centuries ago "the cards were laid out quite differently". In the European perspective, the eighteenth century was definitely the century of chicory, just as the beginning of last century was marked by coffee substitutes made from barley malt. When historical periods are viewed from this perspective, it becomes obvious that Franck not only played the right card in each one of these periods, but he even defined the economic "card game". Great confidence was required for this entrepreneur from the Province of Bavaria to be included in the world economic movements in the early 19th century. Faith, vision and stubborn persistence were not lacking in Johann Heinrich Franck. Young Johann literally grew up in an atmosphere of business. His softhearted uncle took Johann, his mother, brothers and sisters, refugees from the Napoleonic Wars, into his home, where he kept a shop at street level. Johann later gave up a promising officer's career for several reasons, one of which being that he "lacked the resources". However, this caution did not keep him from creating his company "from nothing". He began selling necessary provisions, later he dared to sell edible salt within the framework of the state monopoly. His family business expanded and, over the course of his 45 year career, Johann purchased 60 houses, in fact commercial spaces. His fellow citizens with both appal and awe watched this expansion. From the outskirts of growing Vaihingen, he started on a campaign, which would soon turn him into the first citizen of the city of Vaihingen. From these first business steps to worldwide success, it was his own obsession leading him: if the ordinary man cannot afford to have a cup of good coffee everyday then he, Johann Heinrich Franck, would see to it to provide him with a good quality substitute for coffee. He planned to turn chicory into the "coffee of the little man". In a very practical respect, Johann realized that not any chicory would satisfy, and that only the noble chicory, as it was called, known in botanical circles as Cichorium intybus, was good enough. This plant was virtually unknown in Bavaria at the beginning of the nineteenth century. Young Johann, in addition to shopkeeper, thus became a cultivator, technological experimenter and exceptionally successful propagator of noble chicory (Edelzichorie). From the economic perspective, this was a very intensive investment. In order to achieve his dream, Johann had to secure the plantings, cultivation and harvest of the chicory, followed by the drying process (he had to erect a drying facility) and finally the processing, packaging and sale of chicory. For a modest businessman, this was something that people today would call an impossible mission. However, Johann borrowed courage from the lions on the city crest, and in return graced the bags and cartons of processed chicory with their image. Once the path to business success had been blazed, the fearless lions were replaced by the more symbolic coffee mill. When Franck finally placed his good quality coffee substitute on the Bavarian market, it appeared as though customers had been waiting for such a product. It was an instant success. Everyone in southern Germany had had enough of the morning soup or porridge (Brennesoup). Morning coffee, accompanied with bread and butter, the great European gastronomic revolution, was irresistible to the middle class. Customers did not refer to the Franck product as a chicory coffee substitute, but simply as "Franck-Kaffee". Later, when the competitors attempted to copy Franck, the market began to differentiate the "true Franck" from the competition. The secret success of chicory lied in its ingredient inulin. In the roasting process, sugars and a number of bitter aromatics were removed from the inulin. With a little milk, the Franck "coffee" truly resembled whitened coffee, and not only was this product several times less expensive, but through the control of the entire technological and sales process, Johann Heinrich Franck could guarantee the stability of the market and the existing terms of sale. The second important obsession of the Franck innovator was his fascination with technological advancements. As soon as he had collected together the resources, often before he had the cash in hand, he would alter the hand made machinery, a practice not considered usual in his day, particularly not in the field of food production. "Only with the power of machinery can I produce enough goods to enter onto the world markets," the founder of this company believed. He succeeded in passing on this faith and obsession to his sons, such that he calmly announced his own retirement on his 60th birthday, 2 February 1852. One year later, he officially handed over the management of the company to his eldest son Wilheim. Before his death, he had another 15 years to watch with pleasure as his children turned the Franck Company into a great entrepreneurial project. The newspapers (Staatsanzeiger) covered his death on 13 September 1867 with a comprehensive biography, and they proclaimed that his exceptional business success was due to his ability to make big decisions in crucial moments and that he ruled the simple art of connecting the employer and the worker in a homogenous and winning team. In his two marriages, Johann had received enough good quality heirs, as he had a total of fourteen children. The sons of Johann Heinrich Franck had inherited the chicory fields, drying plants, numerous other facilities, and a well-branched sales network. However, what was most significant, at that time more valuable than the entire production infrastructure, they inherited the name Franck. This was both a gift and an obligation, which the heirs have remained faithful to even to this day. Today, the Franck name in a public place denotes, above all, that top quality espresso is available here, together with the wide range of coffee products for home consumption. The fact that even today leading German and Italian business people come to the Franck factory in Zagreb to see what technological solutions Franck has opted for, or rather, just to see "how Franck does it" is confirmation enough of the unique legacy behind this name. The trademark of the company obligated Franck's sons to take the next big step: to prove the idea that modern technological, marketing and distributive solutions, together with a superior product offered at reasonable prices, was such a powerful concept that national borders could not hold back the company's expansion. Though it would appear that everything has changed from those times to the company today, these early foundations have remained identical. Johann Heinrich would say to his sons, "I was born in Vaihingen, but Vaihingen is too small for you." With the technological reorganization his sons undertook, the centre of the family business was moved to Ludwigsburg. This was an opportunity to challenge the audacious avant-garde production ideas. In the early days of producing the chicory coffee substitute in the Franck family, the only technological resource available to Johann was a single horse, which replaced the mill mechanism. In Ludwigsburg, "horse power" was no longer considered in its literal meaning, but only in the technological. Already by 1868, the Franck family had installed a steam engine as the factory's energy source. At that time, the Franck proudly placed the mark of technological modernism next to the product name: "Fabrik mit Damfbetireb" (Made with steam power). Several decades later, this mark had already become obsolete: by 1896, they had installed electricity in the Ludwigsburg factory. From the very beginning, the Franck family redirected their earnings into new and optimal production solutions. No single new production cycle would be forced into the overly tight restrictions of the one before it. Every new cycle was an opportunity to promote new business ideas and technical concepts. Photographs of the Franck company from the early days of its establishment to today are, in fact, very distinct "postcards of modern technology". Franck was and remains the "illustration of entrepreneurial modernism". The photograph of the Ludwigsburg factory in the 1870s is very significant, as it is dappled with railroad tracks. In their development strategy, the sons of Johann Heinrich first and foremost followed the railroads: those already constructed, and those planned on maps. From their factory, soon the tracks headed out in all directions, with no concern for state borders. It was an exciting time, just made for the Franck company. The new generation of the Franck family was not satisfied with exports. The key idea which arose in the period of the first Franck heir, Johann's eldest son Wilheim, consisted of the simple and yet revolutionary idea of business expansion. Wilheim, followed by Gustav, Herman and all the remaining heirs at the head of the company decided to disperse their production further and further away from the source. When production was moved into the neighbouring country, and then into the neighbour's neighbouring country, then the headquarters no longer had to be burdened with the customs restrictions in exporting. This was no more and no less than the conception of the business process which today is entering its crucial phase, which we call economic globalisation. Back in the 19th century, the Franck Company was founded on such a developmental concept. Following the changes to the borders of independent European countries at the end of the 20th century, the administration in Zagreb at the beginning of the 21st century is again considering these bold business ideas, which will enable a new spanning of state borders. The circumstances now are completely different, however the entrepreneurial environment today is just as exciting as it was at the time that Franck evolved into a great multinational food production company in Central Europe. After this expansion throughout southern Germany, the Franck family decided to take the next step. Linz, Basel and Milan were the first international branches of this unique business venture. The sons of Franck, and later their heirs, did not approach this concept mechanically, playing with new names on the map. Prior to every new expansion, they carefully studied the specificities of each market and the potential of each city and region in concentric circles with a greater radius than Ludwigsburg. Following Basel and Milan, they began thinking about a small but promising and "fast-growing" central European city, which on their maps was written as Agram. After careful consideration of the technical culture of this region, the Franck family decided to construct their factory in Zagreb in 1892. Even then, Zagreb was an important factor for the Franck development; however, they certainly had no idea at the time that one-day the company headquarters would also move to the capital city of Croatia. At that time, Zagreb was simply one loop in the "continental network", as it was described in the Franck business books. The construction and operation of the Franck factory had great significance in the local perspective. Finding the right location was harmonized to the Franck business principles. They sought a location on the periphery of the city, where land was inexpensive and good transport connections were essential. The city region called Crnomerec fulfilled these requirements, and its location in the direct vicinity of the West Train Station was selected. Today, this location is part of the city centre, and in addition to the production facilities, the economic, commercial and management sectors of the company are also housed here. The Zagreb Franck factory began operations on 21 June 1893. In addition, the company began planting noble chicory in the fields of Moslavina, and erected a buying station and chicory drying plant in Bjelovar. Three years later, Franck crossed the Atlantic and began productions in the United States of America. The same principles used to establish Franck in Zagreb were also applied in the U.S. The first location was set in Flushing, a desolate town on the Atlantic Ocean, which would later be integrated into the New York metropolis and become famous for its ATP tennis tournament (Flushing Meadows). In the business book, the records state that in the year it was established, Franck employed three people and one horse. One hundred years later, that would include thousands and thousands of workers, officials, technologists, trade agents, and stock experts dispersed on both the Old and New Continents. The logistics of business integration of the intercontinental network became a key issue for the company. However, the Franck leaders had a clear vision in the 19th, 20th and now in the 21st century. The founder of Franck spoke about how he and his company "served the market". This was clearly stressed from the very beginning, with the focus on the satisfied customer. However, what was less stressed in the beginning, though equally applied, was also the focus on the satisfied employee. The idea of a well thought out and systematically applied social policy in a large company was completely unknown in these regions. Johann Heinrich Franck was the founder of such a policy of a simple yet close relationship with his employees. Later, the large numbers of employees would make closeness impossible, but his heirs found a systematic solution. In this area, they were innovators. Ideas such as a fund for loan assistance, guaranteed health controls and care, and thoughtful modern housing policies and other institutions provided the workers with a great sense of security, which they returned through exceptional loyalty from their feeling of belonging to a company which strives for profit through "humane principles". The company also established a special supplement called the "Schuhgeld" intended for those workers who could not take advantage of organized transport, and who came to work on foot, further wearing out their shoes. This belonging to the great business idea continues to characterize the Franck Company today. In the 19th century, when wagons filled with products would arrive in the Central European cities, or when the messengers of the army of Franck travelling salesman arrived, the people would say "the Red Lion is here", after the original company trademark. However, with time, the name itself became a trademark, parallel to the idea of "Franck coffee" for the chicory coffee substitute. The lions were no longer needed for protection; the name was now enough. In the early period, like today, Franck was transformed into a generic concept. The consumers realized that these were not simply products carrying a common name, but the promotion of an overall business idea, which the market could depend on at any given moment. The influence of the general concepts of quality and innovation to the final product was in and of itself a very modern business idea in the 19th century. Only later would it become evident as to what extent this tradition facilitated maintaining customer trust and assisting new market penetrations. In the early 20th century, the German consumer had his choice of 420 coffee substitute products. In today's environment, the great competition in coffee and coffee substitute products (as well as those who attempt to present themselves in that light) and having a name which guarantees quality and tradition is an advantage upon which Franck can build its success in the third millennium. However, not for a moment did the company fall into the trap of nostalgia. Though faith in the potential of chicory was the foundation of this company, the Franck family did not hesitate when they realized that barley and barley malt could bring more in the new age of the coffee substitute market than products based on chicory. Franck was not a Company, which followed market demands; instead, with its new products and production concepts, it set the market trends. The idea of healthy food has existed since the beginning of the human race, however, the wide market inclination to mass production founded on this concept are much newer. In this area, Franck played a significant role, particularly when the company began to systematically promote the therapeutic Kneipp idea. The Kneipp portrait was multiplied in millions of copies on the Franck coffee substitute products. The idea of quality began to be increasingly supplemented with the idea of health, one of the key demands of the modern market. In the short-term, certain products succeeded in achieving profits by playing to the fickle dispositions of customers. The business visions at Franck were never based on one season or two: in Franck the thinking was based on an epoch. Traditions do not exist in order to make new steps more difficult, but to make them easier, a stance which has finally been crystallized in the modern Franck into a clear business principle. This is why many decisions were made without greater hesitation, and such decisions today have completely altered the assortment of products in the Franck line. Though it was originally based on coffee substitutes, the company in the beginning of the third millennium is based on the production of high quality coffee both for home consumption and for espresso machines in the hospitality business. Financial indicators have not left much room for doubt as to the foundation of such business decisions, which have lead to today's production policies. The visions have enabled the Franck Company to arise from the rubble of the Napoleonic wars, to survive through the trials of two world wars and to overcome the dramas of the Patriotic War. The name of Franck would have slowly shifted onto the back burner in the great business transactions of the multinational company, had the headquarters in Zagreb not remained true to the name. Up until 1957, Franck produced only coffee substitutes in Croatia. However, the growing purchasing power of the middle class in world perspectives meant that the world markets were again changing from the very foundations upwards. Coffee plantations began winning over new regions of the world, while plantation production brought yields which knocked down the price of raw coffee, enabling its expansion throughout the world without precedence. Today, this process of globalisation is virtually complete. In terms of profits, coffee is the world's second most significant world trading item, after oil. Coffee is grown in 80 countries of the world, with 25 million people living directly from the production, processing and consumption of coffee. On this continent alone, Europeans drink over a billion cups of coffee daily! In certain segments of the world market, coffee substitutes are showing signs of new interests and marketing experts are focusing on their untapped potential among younger consumers. However, coffee's position as the world's number one non-alcoholic beverage is not unchallenged, nor will this change in the near future. Even in nations, which have significantly determined the civilization of tea, such as Japan, coffee consumption has risen above that of tea. World experts are predicting similar market development in China as well! In the colourful world of hot drinks, which also illustrates the Croatian market, Franck today is optimally prepared. Blended high quality coffees are in the forefront; though the possibility of a coffee substitute "renaissance" is also under consideration. Green teas and many fruit teas have joined the classical black teas, and other products have also not been forgotten. The modern consumer is accustomed to a daily combination of great traditions, which once competed against each other.

[edit] Franck today

Today, Franck is one of the most successful Croatian producers of food products, and holds the leading market share in the following products: coffee, coffee substitutes, teas, chips, peanuts and other groups of high quality food products. The Franck products have been developed based on the knowledge of generations of employees and the application of applied technology. The company has received numerous domestic and international awards and recognitions for the quality of its products, including three symbols of "Croatian Quality" and prestigious international award Euromarket 2002. In carefully monitoring market trends and consumer opinions, Franck has implemented and continues to implement numerous innovations in the areas of production and customer relations. Franck's position on the market is based on its quality, product availability and its historical image and reputation. Such a position is the result of constant development, introduction of products on the market and informing the consumers about the product characteristics and useful means of consumption. Significant resources have been invested in market research: market needs, changes to consumer wants and the patterns of such changes. The results are valuable resources, which offer flexibility in constant adaptations to new situations. Numerous opinions and suggestions, all part of the communication network, enable the constant monitoring of the market and the timely realization of market needs and wants, which is the most important factor in the developmental policies of Franck. We regularly follow world trends in scientific and technological developments, and significant resources have been invested in technology. Today, the technological production process for our products is among the most modern in the world. Franck is a large company, both in Croatian and worldwide classifications (600 employees), however the majority of the firm has been retained at an optimal level. The result is that Franck is structured as a large company, however the degree of formalism has been held at a level which allows for flexibility and rapid adjustments where needed. Franck is well prepared for the ruthless competition from numerous other enterprises. Such a structured company has the advantage of greater flexibility, cost control, transparent budgeting, planning and operations and, of course, easing distribution and retail control. The distribution network covers the market exceptionally well. The Franck comprehensive network of varying distribution channels shows that the consumer is appreciated, bring the product closer to the buyer and the consumer, on time and in a way the consumer wants. Direct distribution is composed of a network of sales staff covering the four market regions in Croatia, in addition to the separate management of the foodstuffs program. Indirect distribution plays a more significant role in the overall distribution of Franck products. The majority of Franck products are distributed through wholesale centres, which then supply retail outlets, hospitality businesses and cash&carry centres. The Franck distribution centres in Zagreb, Rijeka, Split, Dubrovnik and Dakovo cover all the market regions of Croatia. In this way, the buyers' orders can be delivered within 24 hours. The loyalty of consumers to the Franck name is built on the special and unique characteristics of the products: quality, packaging, availability, positioning, as well as a series of promotional sale activities directed at the consumer. In this way, the positive Franck image is maintained, thus ensuring long-term buyer and customer satisfaction. Franck bases its future on investments in human resources, creative and efficient work, application of technological innovations and the constant monitoring of market movements.