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As part of the operation, the partners of the Chilean company – led by businessman Claudio Engel – will become minority partners of the Reve group, the parent company of the coffee company.
Colombian firm Justo & Bueno formally announced its arrival in Chile. To finalize it, the company – which declared that it seeks to become the main low-cost supermarket chain in Latin America – sealed the acquisition of the local company Erbi.
“At Justo & Bueno we are happy with our arrival in the Chilean market. We hope to start our operation in the near future, once the health situation that concerns us both in Chile and in Colombia and Panama, countries where we operate, is normalized,” said Michel Olmi , President of the company.
The negotiations between the parties were exclusively revealed by Diario Financiero in January of this year.
Claudio Engel, Founder of the Erbi supermarket chain.
After only three years of operation, the coffee company manages more than a thousand stores in Colombia and is starting its expansion in Panama, where it already has 100 locations. The firm is owned by the Reve group, which joined the capital fund Australis Partners, from the United States, in mid-2018.
In fact, as part of the deal, Erbi’s partners will become minority shareholders of Reve.
The Chilean company was founded by businessman Claudio Engel and opened the first branch in Pudahuel on June 29, 2007. It currently manages 32 stores in the Metropolitan and Valparaíso regions. It is defined as “a chain of small-format supermarkets, close to home, and dedicated to meeting people’s daily needs,” that is, weekly and daily or fill-in purchases.
Brothers Jorge and Octavio Bofill also participate in the ownership of the company, with a minority percentage, in addition to Agustín Solari, former executive of Falabella and today dedicated to personal ventures and company boards.
Business model
Erbi has blue numbers, stand out knowledgeable sources, and has in his portfolio an important expansion plan, given the good results that he has exhibited in recent times. The company targets a target audience preferably C2, C3 and D, although it also has a presence with some stores in the La Dehesa and Vitacura areas.
But not all was easy. In its beginnings, the chain only knew of losses. Competition with large operators such as Walmart (parent of Lider, Ekono and Acuenta) and Cencosud (which operates the Jumbo and Santa Isabel) was complex. However, a profound reformulation of the business model was carried out, which included the closure of a significant percentage of establishments, the most deficient.
Along with this, the partners decided to modify the premises. The Carrefour Express model (widely expanded in Europe), which is a local supermarket, was followed. But elements exploited by the German giant Lidl, which operates in the segment of hard discount supermarkets – hard discount, in Spanish – were also taken, incorporating a wide range of own-brand products, generally much cheaper.
Erbi’s model fits with the strategy that has been deployed by the Colombian Justo & Bueno, created by Michel Olmi, who completed doctoral studies in Mathematics and Finance in London and then worked with a bank in Germany. In that country, it caught his attention that some of the richest families founded two hard discount chains: Aldi and Lidl.
Olmi contacted a former Aldi executive who had advised several chains in developing countries and, after evaluating some markets, decided to bring the model to Colombia and then seek to extend it throughout the region.
The company is targeting stores with no more than two boxes, little assortment and its own brands at cheaper prices.
In the country, among the large chains, only Walmart has dared to develop the hard discount format with its Ekono chain.
However, all the competitors have put aside the construction of large hypermarkets to enhance the format of medium-sized rooms.
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