The horizon finally seems to be clearing for L’Eau Vive. With the arrival in its capital, at the beginning of September, of the French fund dedicated Unlisted French SMEs and ETIs UI investment (via its FPCI Opportunities Refions 3 vehicle, dedicated to the restructuring of underperforming SMEs), the Isère organic store brand will be able to accelerate the implementation of its turnaround plan.
After three difficult years, Eau Vive had to place itself, in June 2023, under the protection of the Grenoble commercial court as part of a safeguard procedure. One of the pioneers of the sector – the company will celebrate its 45th anniversary and is placed in 8th position nationally in number of stores, saccording to a ranking established in February 2024 by the media Circuits Bio-, had in fact suffered the full force of the brutal post-covid turnaround of the market, at the end of a decade of growth.
Eau Vive then saw its turnover decline, going from 48.7 million euros in 2022 to 43.6 million euros in 2023, forcing it to drastically reduce its costs. While it had up to 70 stores in its heyday (owned and franchised), it now has 31, including nine franchised (270 employees), mainly located in Auvergne-Rhône-Alpes. Four stores were closed in 2022 (including two owned), 13 in 2023 (including four owned) and two in 2024.
Difficulties that she was not the only one to go through, as Franck Rosenthal, a trade marketing expert, reminded La Tribune a few months ago.
“They don’t all have the same degree of difficulty, but the vast majority of brands specializing in organic are suffering. Whether it’s Naturalia, La Vie Claire, Biocoop, Les Nouveaux Robinsons etc. All found themselves faced with a sudden market reversal. It’s brutal but the supply had become too great compared to the market, the brands opened too many stores and too quickly.”
To this analysis, Nicolas Penelle, appointed general manager of the company at the start of the year by the former majority shareholder (Didier Cotte) and confirmed DGA by UI Investissement (alongside president Christine Jacquier) adds inflation, which forces consumers to make choices and disperse the offer between specialized stores, supermarkets and direct sales.
Return to the fundamentals of organic but also of commerce
After a safeguard exit just before the summer, thanks to the implementation of a debt reduction plan and the arrival of UI investment (amount and level of participation not specified), the brand will now be able to accelerate the progress of its recovery plan.
This is based on three main levers: first, the establishment of an enriched fruit and vegetable offering. Then, the overhaul of the fresh assortments (dairy and non-dairy), with “innovative products, particularly plant-based”, specifies Nicolas Penelle.
“The ambition is to offer healthier, less processed products, with more local produce too. We all probably got a little lost by forgetting the fundamentals of the organic market,” admits the general director.
Finally, the last lever that Eau Vive activates: the development of its bakery department. Plus, up its sleeve, a differentiating advantage compared to competitors: the brand has its own bakery supplying its various stores.
“With this new positioning, we want to retain our current customers, but also capture new consumers who want good things for their health and for the ecosystem in general. The next three years will be dedicated to doing our job well as a retailer, by activating loyalty techniques and promotional offers. We want to put the customer at the heart of our priorities.”
First successes in a context of market recovery
The first steps of this recovery plan, deployed for several months, already seem to be bearing fruit. The 2024 turnover should therefore rise to 46 million euros, with, above all, a return to balance.
“In July/August, we did +8%, while the market was at +7%. In the fruit and vegetables section, we even made +14% thanks to our more extensive offering and also, thanks to a more favorable economic situation for organic, since the gap between conventional fruits and vegetables and organic has never been also reduced. Conventional is in fact suffering from the increase in costs linked to inputs”analyzes the general director of Eau Vive, while refraining from displaying his numerical forecasts for the coming years.
This new recipe that Eau Vive wants to succeed seems rather shared by the sector. The Lyonnais La Vie Claire (340 stores), for example, is also working on a promotion policy while, confides Bénédicte Canard, communications director of the company, “promotions are quite rare in organics”. La Vie Claire has also set up a loyalty system.
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L’Eau Vive is counting on new store openings, a sign of a validated turnaround, from 2026. To accelerate, it is continuing its search for funds and says it is open to the arrival of other shareholders, alongside UI.
Eau Vive should be helped in its revival by the overall stabilization of the market, or even a simmering recovery, after the collapse of 2022. According to the Agence Bio, in 2023, the consumption of organic products (all sectors of activity) represented a market of 12,081 million euros (excluding catering), almost exactly the same amount as in 2023. In this context, specialized distribution grew by 70 million euros (+2.2%) with a number stores down 7% (2,826 stores, a number equivalent to 2018).
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