Walk down Bahnhofstrasse, Zürich’s exclusive main street, and you soon reach Paradeplatz the commercial heart of the city. And there on the corner of the famous square stands one of Europe’s most renowned confectioners, selling exquisite delicacies made in its own workshops from Swiss milk, cream, butter and eggs. Confiserie Sprüngli is a national institution, which more than 175 year after its foundation continues to prosper, expanding its product range and global reach.
Sprüngli’s flagship product is the world-famous Luxemburgerli, a macaroon that melts on the tongue. The name reflects the origins of the young pastry chef who more than 50 years ago introduced the speciality of the Luxembourg master confectioner he worked for while spending time at Sprüngli. Constantly refined in their new home, there are now more than 30 different varieties of Luxemburgerli, with flavours including chocolate, vanilla, champagne, raspberry, lemon and pistachio. Every month, new tastes are developed for devotees who are encouraged to enjoy their fresh ingredients—made without preservatives or artificial colours—immediately. ‘We make more than 800 kilogrammes a day on average—around 80,000 Luxemburgerli,’ says Tomas Prenosil, Sprüngli’s chief executive. ‘And we sell them only in Switzerland and only through our own retail outlets. They are not available wholesale or through other retailers. Everything we produce, we sell ourselves exclusively.’ That policy, he adds, is central to the company’s success, because it can ensure the quality of its products and keep in close contact with its market. ‘It also means that we determine our prices and can control our margins, which is important in the luxury food sector. Other companies that distribute through third parties get squeezed by retailers, but our approach helps us to stay independent and maintain our luxury niche in Switzerland and around the world.’
The company was founded in 1836 when David Sprüngli bought Konditorei Vogel in the marketplace of Zürich’s Old Town. His son introduced chocolate production in 1845, and in 1859 the confectionery business was moved to the newly built Paradeplatz where a modern transport and business hub was developing. The construction of Bahnhofstrasse in 1864 created a direct link to the city’s central railway station, and Confiserie Sprüngli’s key position made it a popular meeting place. In 1892, Chocolate Sprüngli went its separate way as an industrial enterprise that later became Lindt & Sprüngli, leaving the confectionery business to continue as a family-owned craft business.
• Stay close to the vision for the business, so that it survives and remains independent
• Define a system of family governance with rules about the role of family members in the business and procedures for resolving issues
• The succession process is the biggest challenge—it means finding successors who are willing and able to take over, and who have the right personality to run a family business
• The older generation must step back when the younger generation takes over—and not hold on to any aspects of the business. It can be very difficult for entrepreneurs to let go, but it is essential if their successors are to succeed
• Appoint directors who can contribute to running the business—avoid giving power to family members who have nothing to contribute
Under Richard Sprüngli, a fifth generation family member, production was moved out of Paradeplatz in 1961 because of traffic and space considerations, to the home it has today in Dietikon to the west of the city. And in 1970, a second sales outlet was opened in a Zürich shopping centre, launching a programme of expansion into prime retail positions in the city. But with no children of his own, Richard decided to pass control of the business in 1994 to two nephews: Milan and Tomas Prenosil. They had arrived in Switzerland from Czechoslovakia after the Soviet crackdown on the Prague Spring of 1968, making a new start in Zürich where their aunt had married him.
‘At that moment,’ Tomas says, ‘we who had been found ourselves at the centre of Zürich society through our connection with one of the best-known companies in Switzerland. We would spend a lot of time with my uncle on holidays and at weekends, and my brother and I grew up with Confiserie Sprüngli. During the summer holidays we sometimes worked in the factory and drove trucks to deliver orders—from our earliest days we were involved.’
Tomas originally intended to be a lawyer, and studied law at the University of Zürich after his national service. His uncle wanted him to study economics, but he thought being a lawyer be more interesting and challenging. However once he had qualified in 1994, his uncle asked him if he would like to join the company—giving him one week to answer. When he agreed, he started work as plant manager at the Dietikon production factory. His older brother Milan was already working in the business in marketing and sales and is now the company’s President.
Amazingly, this was not the first time that the succession had passed sideways through the family chain in this way. ‘The fourth generation Sprüngli also had no children,’ Tomas says. ‘He adopted his nephew—my uncle—and put him in charge. So we have now had two successions that brought in younger people eager to prove themselves. The old saying used to be that a family business lasts three generations: the first starts it, the second continues it and the third runs it down. We are now in the sixth generation because two of our predecessors were able to choose the next generation family members with the right characteristics to succeed.’ Tomas Prenosil says he quickly realised that he had made the right decision by joining the business: he found that he had management skills, he liked to work with people and was good at dealing with tactical and emotional issues. One of his motivations for wanting to be a lawyer was that he felt it would give him independence, but being a director of the family business gave him the independence he desired. He has no outside shareholders to answer to, and since the company finances itself from its own resources, no banks to worry about. Thus he has the freedom to be entrepreneurial, constantly innovating in a world where the pace of change is accelerating.
Tomas describes innovation as his hobby. ‘I love to identify new trends and devise new products, packaging and designs—working with staff, sharing experience, thinking about what the market wants and finding ways to meet those needs. We organise innovation through a dozen groups that bring together financial, procurement, production, marketing and sales staff to work on ideas for developing the business. I always try to encourage young talent, being flexible when they come up with new ideas and never telling them that if they don’t like it here, they can leave.’
One good example of the fruits of that approach was the introduction of takeaway lunch products in the company’s shops. ‘People came to me with little sandwiches and salads in Tupperware containers and suggested that we offer takeaways. At first there was resistance by those who said we only sell chocolates, but confiseries have always made canapés. So we started to produce our takeaway lines and today they are an important part of the business, attracting regular customers who often buy chocolates at the same time.’
The expansion of retail outlets started by his uncle has also continued. Today there are 21 shops, mostly in Zürich but with branches in other Swiss cities. There are also airport branches in Geneva and Zürich which have high footfall because their products make good presents for colleagues and family. Tomas expects to open a few more stores in Switzerland, but he is also excited about the growth potential of Sprüngli’s online shop, especially for corporate customers. ‘For corporate clients, we can individualise everything—boxes, packaging and even special Luxemburgerli flavours for a single event. A lot of global companies have head offices in Switzerland and our very strong logistics division can ship our products wherever they want them to go. And companies can even link into our online shop through their intranets to make ordering easier.’
As for international expansion, Tomas Prenosil sees few opportunities in other European countries which have had their own long-established chocolatiers. But he sees potential for the internet business outside Europe, especially in countries such as Japan and cities such as New York, Dehli and Shanghai where Sprüngli Luxemburgerli and luxury chocolates could be be sold online. A subsidiary in Dubai is pioneering B2B (business to business) markets in the Middle East and India, and also B2F—business to families in those regions who often stage very large events such as weddings and the Eid celebrations. While the cost of flying in supplies to ensure quality and freshness is expensive, people from those markets spend time in Switzerland and know Sprüngli’s products, he adds.
With rising turnover of more than CHF120 million a year, Confiserie Sprüngli is not a small business: to retain its artisanal manufacturing techniques, it employs around 1,000 people. But Tomas is keen to point out how Sprüngli’s success reflects the wisdom of the early family members in buying the Paradeplatz shop in 1859. ‘It was one of the most important decisions in our history, since it gave us a visible presence in a very important and exclusive place. Selling coffee, croissants and Luxemburgerli could never pay the rent for this location today—only fashion, watch and jewellery shops can afford to be on the Bahnhofstrasse now.
‘We are Sprüngli today of our outstanding quality, because we are Swiss, because we are in Zurich and because we are in the Paradeplatz. Without this location, we would be somebody else.’