CubaNews / October 2002
By Larry Luxner
HAVANA -- The Golden Arches haven’t yet sprouted up on every Havana street corner, and Pizza Hut is still nowhere to be seen.
But Pain de Paris — a franchised bakery chain specializing in French bread and pastries — is rapidly becoming a household name here among tourists and habaneros lucky enough to have access to dollars.
At last count, Pain de Paris had 12 outlets throughout metropolitan Havana.
The restaurants, distinguished by their bright yellow awnings and cheerful, air-conditioned interiors, can now be found at several key intersections such as 25 and O in Vedado and the corner of Avenida 51 and Calle 106 in Marianao. The chain’s biggest eatery is in front of the Cine Acapulco in Nuevo Vedado.
Pain de Paris is the brainchild of Michel Villand, a 63-year-old real-estate developer from Port Grimaud along the French Riviera. Villand owns the Pain de Paris trademark, as well as Cofeco de Caribe S.A., which has a 49% stake in the joint venture, known as FranCuba S.A. The Cuban government, through Cuba-nacán, owns the other 51%, while state entity Palmares operates the stores themselves.
“We were the first French joint venture of any type in Cuba,” said the businessman. “That's why they call me a pioneer.”
Villand’s interest in Cuba was sparked in 1994, when the French Embassy in Havana invited nine French firms to explore business opportunities in Cuba's food sector. Meetings and negotiations ensued, culminating two and a half years later with the establishment of FranCuba S.A. The venture was capitalized at $3 million, with half coming from Villand’s company and half from Cubanacán.
On April 17, 1997, FranCuba inaugurated a 3,000-sq-foot industrial bakery in a ceremony attended by Fidel Castro. A framed copy of Castro’s quickly scribbled note of congratulations occupies an honored place on the wall of Villand’s office.
“We've been making products for the last five years,” he said proudly. “We have 17 types of French bread and 77 types of pastries.”
Villand spoke to CubaNews late last month over coffee and croissants at a Pain de Paris restaurant in Havana’s Flores neighborhood.
This outlet, located at the corner of Quinta Avenida and Calle 182, sits adjacent to the processing plant. Half his clients are foreigners; the other half are Cubans with dollars.
“You have to know that the Cuban people are the largest consumers of bread in the Caribbean,” said Villand, noting that his Hav-ana factory is the No. 1 producer of French breads and pastries in the region —including the French-speaking islands of Guadeloupe and Martinique.
A second, much smaller factory serves hotels in Cayo Coco, where the hotels cater to Canadian tourists who already have a cultural preference for French bread.
“We’re in negotiations to expand to other cities in Cuba, starting with Varadero. We are also trying to export frozen products to other countries” such as the Bahamas, the Cayman Islands and the Dominican Republic, he said, “because in the rest of the Caribbean, they don't have our quality.”
Villand says the Pain de Paris outlets — which are open 24 hours — offer hungry patrons an assortment of French bread, Vienna rolls, baguettes, buns and seven-grain bread.
When it comes to pastries, the choices are even more tempting: bûchettes, millefeuilles, almond slices, réligieuses, tropéziennes, éclairs, tarts, strawberry turnovers, marquesitas and, of course, the traditional croissant.
There’s also a selection of wedding and birthday cakes prepared by personnel trained in French baking methods.
“The Cuban people deserve French quality,” Villand says with unabashed pride. “We import everything from France and the European Union — the grain, the butter, the creams and the fruits. All we buy locally are salt, sugar and eggs.”
On Saturdays, the chain sells 30,000 loaves of bread, 5,000 croissants and between 8,000 and 10,000 other types of pastries. Around Christmas time, sales volume doubles.
But here’s the irony: Villand isn’t allowed to sell products directly to the public, only to the stores, which are run by Palmares.
“The trademark is mine and the recipes are mine, but the sales belong to the state,” he explained. “In Cuba, foreigners don’t have the right to sell to the public. If I could, my sales would double.”
That’s because the same 400-gram loaf of French bread Villand sells to the government for 63 cents is then offered to the public for $1.35 — a markup of over 210%. Likewise, the government buys baguettes at 36 cents each and sells them for 80 cents each; a longja de almendra (almond slice) that Palmares pays 58 cents for is sold to customers for $1.25.
Even so, Villand isn’t doing too badly. Last year, his revenues came to between $3 million and $4 million; profits were around 15% of that. About half his sales are to the stores, and the other half to 40 restaurants and luxury hotels like the Nacional and the Meliá Cohiba.
“The factory is making money, but the biggest sales are done by the stores,” he ex-plained. The joint venture now has 300 people on the payroll, including 72 factory workers. Villand’s sales are limited, of course, to foreigners and the relative minority of cubanos who have access to dollars.
Most of the island’s inhabitants get their bread either through their government-issued ration cards — which guarantee a daily bread ration of 40 grams per person at only six Cuban centavos each (about 1/5th of one cent)— or from the parallel markets, where a 400-gram loaf costs 10 pesos (about 40 cents).
The entrepreneur says he could reduce his costs by buying some ingredients from U.S. instead of European suppliers, and in fact has spoken with Sun-Maid Growers of California about importing limited quantities of raisins.
“I have the right to import, but I won’t if the quality of the products isn’t up to standards,” he said. “To compete with the big multinationals, my only hope is to maintain quality.”
And what will happen when the U.S. embargo is lifted some day? Will Pain de París be able to survive next to giants such as Burger King, McDonald’s and KFC?
Absolutely, says Villand.
“Last year, 15 million Americans visited France and ate French food and and drank French wine,” he boasts. “We have no fear, because we will maintain our quality and the whole world will buy our products. It’s like French perfume. We have no competition.”