Dateline: Madrid: The Cuban who conquered Spain
Wednesday 17 March 1999
Wrong on all counts. Leopoldo Fernandez Pujals, 51, who launched his TelePizza delivery chain from a single outlet in a modest suburb of Madrid 10 years ago, has transformed the eating habits of a nation and become one of the richest men in Spain.
"Anybody could have done it. It just takes common sense and a lot of hard work," says Mr Fernandez, an energetic Cuban, naturalised Spanish, with a flashing smile and a liking for Havana cigars. He is perhaps the only chairman of a Spanish-quoted company to go to work in a short-sleeved polo shirt.
His timing was perfect. Not only did he awaken Spain's taste for pizzas, he launched upon the Madrid stock exchange in December 1996, at the moment thousands of Spaniards developed a ravenous appetite for shares. Telepizza shares were oversubscribed 46 times in the most heavily subscribed flotation Spain had ever seen.
The product was a winner with new Spanish investors because, in addition to being explosively profitable, it was new, easy to understand and fun. TelePizza became the starriest performer on the Madrid stock market by far, two years running. Profits, at 3.6bn pesetas (pounds 15m) were up 45 per cent last year, and new outlets open every day.
Last week Mr Fernandez flew to Edinburgh as president of Europe's 500 most enterprising companies. Next week he's off to Harvard to tell fast food's heartland how to conquer the world with takeaway pizzas. His is the first such company to outstrip McDonald's in a national market. Baked at 300 degrees centigrade for five minutes 50 seconds, his pizzas are delivered by more than 8,000 young bikers within half an hour. Prices are held low, margins tight and profits generated by sales volume. When a outlet sells more than 10,000 pizzas a month, another opens nearby to maintain the company's quality of service.
Mr Fernandez, who was born in Cuba of Spanish descent and brought up in the US, mounted his operation on hard-driving, hands-on American principles. His methods, so successful in retrospect, fly in the face of Spanish norms, where face-to-face customer contact is all-important and everyone expects to be kept waiting.
"The market is a battlefield: you have to gain ground and fight off others who have seen the same opportunity. I try to foster an American work ethic to get hands-on experience at all levels of the business. I don't want my executives to come straight from university and land into an office," he insists.
In the early days he took his pizzas round in his own truck, having perfected the product with some rule-of-thumb market research: he gave away pizzas to teenagers around the neighbourhood of Barrio del Pilar every day for a fortnight, experimenting with different dough mixtures until they gave him the thumbs-up.
The formula took off instantly. Spaniards loved the novelty of ordering something by phone and receiving it within minutes. Fast food was barely known here when Fernandez started out. But he spotted the same trends at work in Spain that had inspired the fast-food revolution in the US. More and more women were joining the labour market with less time to shop and cook, so families looked to fast food as an appetising alternative to traditional home cooking. The sector in Spain is only a tenth of that in Britain, but it is growing at more than 30 per cent a year.
"Leo", as even his bikers call him, fled Cuba at the age of 13 in 1960, after Fidel Castro came to power. "My father sent me to Florida to improve my English, but a year later my parents' property was expropriated and they came too."
He joined the US army in 1967, and served as a captain in the Vietnam war. He narrowly avoided being sent on a spying mission to Cambodia when a soldier he had trained in officer school at Fort Belvoir assigned him a desk job.
Speaking Spanish with a Cuban lilt and English like a Floridian, he switches effortlessly between the two. He became a soap salesman for Proctor and Gamble in 1971 and within three months broke through his annual target for selling tablets of Camay. Disgusted at the paltry $1,000 bonus he was offered, he quit and joined Johnson and Johnson, who in 1981 sent him to run sales and marketing in Spain.
"By then I was 40 and my father told me that if you hadn't founded a business by then, it would be too late. So I decided to give it a try." He was still at Johnsons when he started putting in night-shifts at his little pizza parlour, receiving funny looks from his executive colleagues. But his detractors were soon eating their words, along with his pizzas. TelePizza breezed through Spain's 1993 recession with a 60 per cent growth in sales.
In 1997, Fernandez bought out his main Spanish competitor, Pizza World, increasing his outlets by 110 at a stroke and becoming market leader, controlling 62 per cent of the country's pizza deliveries. The move gave the company a big stake in the northeast region of Catalonia, springboard for imminent expansion into France. Mr Fernandez has persuaded Poles, Mexicans, Chileans and Portuguese to tuck into his pizzas, and he is looking out for other countries to conquer. Recent acquisitions in Spain include a transport firm and a cheese provider.
More than a year ago the company opened a chicken and ribs outlet in Madrid - TeleGrill - and plans to diversify into oriental, Mediterranean and Tex-Mex food. "It's important to offer variety, because you don't want to eat pizza every day," Fernandez explains with implacable and cheery logic.
He strives to turn traditional Spanish habits to his advantage, launching special summer promotions for men left alone in the city while their families are away enjoying beach holidays. Named after the Spanish nickname for such temporarily single men - who have a reputation as sexual predators - his tailor-made menus for them are called "TeleRodriguez".
TelePizza has even tuned into Spain's passion for football. Millions watch football on television six nights a week, and for matches between top teams, such as Barcelona and Real Madrid, Mr Fernandez hires extra staff who deliver hundreds of thousands of pizzas. He is discreet about own sporting loyalties, conscious that in the competitive world of football and fast food, he always comes out on top: "You see, sometimes Real Madrid wins, sometimes Barcelona wins. But TelePizza always wins."
Like hoover and xerox, TelePizza has become a generic word in Spain and the company's success has spawned dozens of wannabes, like TelePaella and TeleChino. As conclusive proof that the American way has vanquished the bastion of Spanish fast food, a leaflet just dropped through my letterbox offering, inevitably, TeleTapas.
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