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Osborne: Bullish about the future

One of the most recognisable symbols of Spain is the black bull. Whether it towers over stretches of roads, shouts out from the pages of national newspapers or is found with increasing regularity on a vast range of tourist souvenirs, it communicates a clear message about the values of Spain and its people. However, what is less well known is that the famous bull was created in 1956 by the family-owned Osborne group to publicise a brandy marque.

The Toro de Osborne remains one of the greatest achievements in Spanish design and is a rare example of a logo that has transcended the links to its owners to become blurred with very identity of a nation. Now the company, which is over 230 years old, wants to reclaim the bull for itself.

"It is a known fact that the bull is used as a national symbol and for many other ends too," Ignacio Osborne, the CEO of the Osborne group, exclusively tells Campden FB. The success of the image created by designer Manolo Prieto is a source of pride for the Andalusan family company, which commissioned it as part of a campaign to advertise Veterano brandy.

The image was used to produce several four metre high outdoor posters that were strategically distributed on top of hills along the country's busiest roads. Over time, the posters were simplified – names and brands were scrapped – and got even bigger. The latest versions are 14 metres high and display the image of the bull, with no writing at all. They look over, and are seen by, drivers in 92 different places around the country.

The success of the campaign has been undeniable: one only has to walk around Madrid or any other big Spanish city for a few hours to see a number of Osborne Bulls printed on T-shirts, car stickers and even glasses; while scenes of a recent production of the opera Carmen in Madrid took place in front of a huge Osborne Bull. But not every use has been beneficial.

"The image has been used by many people in a fraudulent way, either on purpose or involuntarily," Osborne complains. In a recent report about the problems faced by the Spanish economy, British magazine The Economist stamped the cover with the bull and a message that "the party was over". In Spain itself, a recent issue of satirical weekly El Jueves printed a two-headed, mutant Osborne Bull on its cover to denounce the supposed risks of nuclear energy. Many companies have also used the logo to sell their own merchandise without seeking authorisation from the rightful owners.

"We don't sell T-shirts, stickers or key holders, nothing of the sort, but you can find lots of such products on sale everywhere," Osborne says.

As a consequence, the company has made an intensive effort in recent years to reverse the situation. And the war against the "bull pirates", as Osborne calls those who infringe its image rights, has borne some fruit. He estimates that, in the last five years, over 400 firms were contacted by copyright authorities concerning the illegal use of the image, and more than 500,000 fraudulent articles were apprehended.

The sheer volume of illegal usage gives a good idea of the money-making potential of the Osborne Bull and, perhaps a tad belatedly, the family has decided to explore it more thoroughly. It has recently started to sign agreements with other companies to produce a range of products based on the iconic image. "We have granted 15 licences so far for the production of merchandise that ranges from ties to motorcycle helmets," Osborne says.

Osborne was founded when a young merchant from England, Thomas Osborne Mann, started a wine export business in Cadiz. He then began producing wine himself while his son soon boasted the title of Count of Osborne. Over two centuries later, Osborne has a diversified business in the food industry, with products spanning from wine and water to hams and restaurants. Today, Osborne is a feature in the daily life of millions of Spaniards, is one of the country's most successful family businesses and is gaining ground in international markets.

The willingness to make the most out of the Osborne Bull is also evident in a re-branding effort launched by the group earlier this year. Traditionally, the firm's growth strategy has rested on the acquisition of stakes at several companies that enabled Osborne to expand not only in its original market segments, but in completely new areas too.

It wasn't until 1967 that the firm ventured into producing outside the Andalusia region. The first step was Portugal, where Osborne began to make Porto wines, and later set up wineries in Catalonia and other regions. Further diversification took place when the group created a company to distribute imported spirits in the Spanish market. In the 1980s, Osborne purchased 15% of Sánchez Romero Carvajal, a producer of ham and other pork products, which it would later fully own. Catering, bottling mineral water and producing fruit juices are business ventures that have been developed more recently. The group also makes energy drinks and owns the restaurant chain Mesón 5J.

"We have plenty of strong brands and consumers don't realise that they are part of a single group," Osborne notes. "So we've decided to gather them under the same umbrella, but without diluting the strength of the individual brands." The new corporate brand, which is being added to the packages of all products, merges the image of the bull to the name of the family, but in a rather discreet way that contrasts with the giant panels seen by the road.

The re-branding effort comes in the wake of a series of initiatives taken by the company to grow both in Spain and in foreign markets. Osborne says that the markets in which the company operates are doing badly in Spain, as high unemployment and the end of the property bubble have depressed the spending power of the population. But he remarks that the group has taken measures to come out of the turmoil in a good shape. "We have cut expenses and reduced investments," he explains. "As a consequence, 2008 results were just a little below the year before. And this year we expect to repeat the performance of 2008."

He also notes that times like these present opportunities for the brave. "We've signed agreements with partners that wouldn't have been possible before the crisis," he says. "Clients have agreed to stay with us and renegotiate the terms of our relationship. Companies that use creativity can take advantage of a crisis like this."

Osborne says the company is open to making acquisitions as long as they involve rivals of moderate size, are the right price and are in an area in which they already work. He points out however, that, since the crisis started, the firm has only been able to close important deals that required little or no investment. The most remarkable of these has probably been the signing of a partnership with The Wine Group, the world's third largest wine company, to sell Spanish wines, including but not exclusively Osborne's own, in the US. "It is a very important partnership for us, and one that has required no investment," he says.

The deals didn't stop there. Osborne bought 14 wine and brandy brands from Domecq, and acquired a 15% stake at Embutidos Fermín, the only company that is allowed to export Spanish pork-based products to the US. It also set up a new company, co-owned with Portugal's Compal, to produce juices and other fruit-based goods for the Spanish market.

Osborne implemented an alliance with winemakers Miollo in Brazil to sell wines in that emerging market, as well as importing Brazilian wines to Spain. International expansion has also included the opening of a branch of Mesón 5J at Harrods, in London.

The effectiveness of this frenzy of activity is likely to be put to test soon. Osborne claims the food market is set to come out of the current crisis in a different shape. "No one knows what form the food sector will take, but I'm almost sure that it will be a new market," he forecasts. "There will be changes to the way companies manage their relationships with banks, clients and other companies. The exact nature of those changes, I can't tell you right now. But the financial industry already indicates that there won't be the same capacity to leverage that took valuations in the sector to excessive levels."

He also considers it important for family groups like Osborne to have the agility to react to new situations in order to progress in an evolving market. "Osborne is a very open group and very flexible too," he says. "We are investing significantly in our business and we are not the typical family company that refuses to take on debt." To a great extent, he says the group works as a listed company. "We have a board that works just like any other company. We have voluntarily implemented management layers that are compulsory to public companies, like an external audit commission that is independent from management."

More than being a family or listed company, he argues, the most important thing is to define the best business strategies for the sectors where the firm operates and to discuss those strategies at length within the board. "We don't have any rules saying that new investors cannot get into the capital, or that the company cannot be listed in the stock exchange. If such things have not been done so far it is because we considered that they were not adequate to our goals. To have external investors are a means, not the end of a business," he says.

The adoption of professional management rules has been a key factor in the successful governance of the group. Osborne stresses that his firm, although family owned, has more shareholders than many listed companies. After more than 230 years of history, the family has expanded as much or even more than the business, and the number of shareholders has reached 240 today. All of them but 15 are members of the family. "It is important that the rules are clearly stated. You can't run a company with 240 shareholders by assembly," he says.

Rules apply to the appointment of family members to senior positions. Currently there are only two at the helm: Ignacio and his cousin Tomás, who is the chairman of the group. Both are members of the sixth generation of the family. Two other Osbornes work as brand ambassadors for products sold by the group, and that's all. "There are some conditions for a family member to work in the business," he explains. "For example, the management team must believe that a family member adds value to a job. Our brand ambassadors are an obvious example. People in the wine industry place a high value on the fact that we are the sixth generation of the Osborne family to be producing wine."

Perhaps now the family will become as emblematic of the group's success as the famous bull. Given they have been around a lot longer, it is surely about time. 

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