Everybody in Spain can remember Caballero TV commercials for the Caballero ponche spirit. The catchy tune was hummed by generations. This liquor is also the main product of the company, founded in El Puerto de Santa María in 1830 with five wineries in the four major Spanish wine regions: Jerez, Rioja, Ribera and Rueda. The company has 125 employees and an annual turnover of over 53 million Euros.
Though centuries-old brands such as La Ina wines or the famous Lustau liquors mature in their barrels, Grupo Caballero knows that the long history of the company it not enough. You need to look just beyond what you know and get out of the comfort zone in order to grow. “In the last three or four years we have experienced an obsession with being at the forefront and we are very concerned about what is happening outside the company, finding everything that can make us improve”, says Jaime Marín, COO of Grupo Caballero.
Marín has been the company’s contact partner for the cost optimization project conducted by Expense Reduction Analysts which generated significant savings in the cost categories of cardboard, corks, capsules and energy.
Carlos Aguilar, Client Manager of Expense Reduction Analysts for this project, highlights the willingness of the company to integrate changes. “Caballero operates in an industry very sensitive to trends, therefore needs to remain very alert and be flexible. Their Sherry wines have historical prestige, but recently the company has incorporated new products such as Premium gin or high quality rum. This productive dynamic is probably what made them very receptive to listen to our proposals”, he explains. “But finally some changes were impossible to execute due to logistical and organizational reasons”, adds Aguilar.
Winery by winery
From the outset, there was the added difficulty to the project of working in five different locations. “Caballero, Lustau, Viña Herminia, Marqués de Irún and Destilería Miura wineries respond to a centralized decision-making power, but in order to create a product with personality, some independence is needed. This is why we made the approval of the changes individually. It was very thorough work”, says Aguilar.
The analysis made by Expense Reduction Analysts, as a panoramic photography about the dynamics and accounts of the company, showed the cost optimization process already initiated by the company could have a greater impact. In some cases, the company preferred not to implement changes or exploit the potential savings to the end due to internal issues or to the conditions of the sector.
It was for example the case for the glass category. “We have a very wide variety of references and we work with very personalized bottles which makes the search for alternative solutions technically difficult. This is the reason why we opted to take the category out of the optimization process at an early stage”, explains Marín. The same problem occurred with the labels too. Being in the Regulatory Council of Jerez forces Caballero to work with a certain number of suppliers. The relation with them is also affected by the fact of dealing with a very wide range and short production runs, sometimes up to 3,000 units per year.
“In the last three or four years we had experienced an obsession with being at the forefront” says Jaime Marín, Operations Director of Grupo Caballero.
“Caballero operates in an industry very sensitive to trends, therefore needs to remain very alert and be flexible. This productive dynamic is probably what made them very receptive to listen to our proposals”, explains Carlos Aguilar, Client Manager of Expense Reduction Analysts for this project.