Business Profile: Ibérica

By Mel Flaherty

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Business Profile: Ibérica

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An unwillingness to compromise on the quality of its ingredients and the authenticity of its cooking has seen premium Spanish restaurant group Ibèrica make the transition from the capital to the regions with a successful new restaurant launch in Manchester.

"Spaniards are shy and they are crap at selling their own product.” It soon becomes apparent that the description of his fellow countrymen does not apply to Marcos Fernandez Pardo, the managing director of Ibérica.

The Spanish-born restaurateur has become something of a standard bearer for Spain’s higher end cuisine. Ibérica – which operates four eponymous restaurants in London and a recently opened outpost in Manchester – has won the Marques de Busianos award from the Real Academia de Gastronomia for bringing Spanish gastronomy to the world.

He sees promoting and improving the quality and perception of Spanish food worldwide as a virtuous circle and his personal mission. An increasing proportion of the 15 million Brits who holiday in Spain go for the food, and Fernandez Pardo has not been coy about telling tourism chiefs at the various functions and conventions he attends that they need to ensure licences for beachside restaurants back home go to quality operators, not someone the licence issuer is related to. He is even ‘sort of’ happy when his managers leave to open their own restaurants in Spain.

When he starts talking about the luxury tinned food on the Ibérica menu, which is also sold at the restaurants’ delis, you can see how much he believes in what he does and how persuasive he is at getting others to go along with him.

“It is a constant battle with customers to get them to appreciate tins,” he says. “In England, you have tins of tuna that, in Spain, would be cat food. Spain does sell regular tinned food, but we have another
level, which comes at a much higher price. People are prepared to pay it because it is such good quality.”

This is followed by a history of tinned food going back to caviar for the troops in the Napoleonic Wars and a taste of the, absolutely delicious, £30 tinned gourmet cockles in brine, Don Bocarte anchovies and tinned white tuna belly that are way too good for even the most treasured pets.

Fernandez Pardo waxes just as lyrically about the different hams, describing the economics of producing them in a country with diminishing space for the mature oak trees required for the pigs to get their fill of the right type of acorns to produce the right taste in the meat.

Ibérica’s menus are created by executive head chef Nacho Manzano, the hugely talented Spanish chef behind Casa Marcial, in Asturias, in north-west Spain.

Fernandez Pardo attributes a big part of Ibérica’s success to the involvement of Manzano, who is now a shareholder within the business, which is on course to report a turnover of £9.5m.

Michelin pedigree

Iberica menu

The food offer at Ibérica is a mix of Spanish cuisine’s greatest international hits – the likes of patatas bravas, paella, fried squid with alioli and Spanish omelette – with more creative dishes conceived by Manzano, who holds two Michelin stars for his cooking at Casa Marcial. Signature dishes include the Ibérica burger with secreto pork loin, fried chorizo lollipops with pear alioli sauce and toast topped with asparagus, manchego, onion confit and truffle oil.

The restaurants also offers large sharing dishes including the cochinillo asado, a 6kg suckling pig that needs to be ordered 12 hours in advance and costs £190.

But Fernandez Pardo’s own personal traits have also undoubtedly helped this small restaurant group have a disproportionately large impact on the Spanish restaurant scene. Of course, Ibérica is not the only group making waves in the sector. Fernandez Pardo credits Brindisa and the Cambio de Tercio Group as the grandparents of modern Spanish gastronomy here and has nice things to day about Barrafina, Salt Yard Group and Camino.

He thinks that this movement has been a long time coming, blaming his native culture’s history under a dictatorship and centuries of emigration, predominantly to Latin America, as opposed to the wealthier and more confident United States where many Italians settled, for the fact that its gastronomic light has spent so long under a bushel.

Fernandez Pardo observes that the British, too, are shy about their own gastronomy, despite having had the longest and most comprehensive access to ingredients from around the world, thanks to the days of the British Empire.

Perhaps the fact his own upbringing straddled both cultures helped him overcome the inherent reticence in selling their good points that he attributes to Spaniards generally. He first moved from north-west Spain to England at the age of two; went back to Spain aged seven; moved to Madrid but came back to England every year when the Spanish schools broke up, spending a month in an English primary school to brush up on his language skills. His secondary and higher education years, studying an economics degree, were also spent in England. His Spanish accent now is all but imperceptible, just poking through on certain words but, of course, his native tongue is still fluent when speaking to the staff.

Facing the music

Marcos Fernandez Pardo
Marcos Fernandez Pardo

Fernandez Pardo first worked in an art gallery, then a European cultural magazine, then the record industry, eventually setting up an independent marketing and promotions company in that sector. E-commerce came next and when the IT bubble burst, he came back to England to get back into the music business. He soon realised that would be hard work for little return in a shrinking market. As a customer, he recognised there was a gap in the market in the then fledgling Spanish restaurant sector in the UK and set about filling it, working with his own family (principally his father Emilio, the main shareholder), and seeking other partners to help it come to fruition.

Ibérica Food & Culture was born. While Fernandez Pardo had no experience of the hospitality industry, he had the cultural understanding and emotional intelligence required plus the proven ability to set up and build a business. The first restaurant launched in London’s Great Portland Street in 2008 and was almost immediately a hit with customers and critics alike (although Fernandez Pardo reckons that if he operated a restaurant in the way they first ran it today, it would not last six months – luckily he is a quick learner).

The real turning point, however, was in 2010 when Javier Fernandez Hidalgo, a Spanish food importer by trade who was originally appointed as managing director, left the business. Fernandez Pardo took on the role with vigour, appointing renowned Spanish designer Lázaro Rosa-Violán to overhaul the branding and redesign of the décor; while also building a strong team culture and implementing robust structures to move forward.

Spreading out

Within a year of taking the helm, earnings before tax, interest, depreciation and amortisation (EBITDA) doubled. That year he also persuaded a number of key investors with vast industry experience to join the business – Jamie Kennell, a former non-exec director of Gordon Ramsay Interactive; Stephen Gee, the former chair of Carluccio’s; and Honorio Fernandez, CEO of La Alpargateria, the Madrid-based restaurant group, and also now managing director of StreetXO. The second site opened at Canary Wharf in 2011 and was followed in 2013 by La Terraza – an open-air restaurant, which operates separately and seasonally,
opposite the Canary Wharf restaurant.

Santander agreed a £2m deal with the business for the opening of the smaller format Farringdon restaurant in April last year and the first site outside London, in Manchester’s Spinningfields, which launched this March. A further £3m has been agreed to get the next restaurant open in Victoria, London, in August, and to convert a former auction house in Leeds into a large restaurant with the group’s first separate wine bar, due to open later this year.

The move outside the capital came sooner than Fernandez Pardo ever originally imagined, thanks to the increasing rents being demanded in London (although he recognises other regions are now not far behind). While Manchester is currently the highest performing restaurant, serving up to 400 covers a day, he is realistic enough to say he “wouldn’t count on it yet”, recognising the novelty factor and the high investment made – £1.6m compared with the usual £1.2m for an Ibérica.

The plan is to get to 10 restaurants by the end of 2016 and Fernandez Pardo has spent two years getting a solid support office team in place to achieve that. Places like Oxford and Cambridge are targets for the smaller model restaurant like Farringdon (where, incidentally, he is investigating the possibility of launching a kiosk-style outlet attached to the restaurant to serve hot churros to commuters in the mornings), and Glasgow and Edinburgh are top of the list for the next full-size Ibéricas.

The pace is not likely to let up any time soon, but Fernandez Pardo thrives on it, relying on regular cigarette breaks during the day to keep him going and his cycle ride to work as his time to think. He needs to work on the next three-year plan for the business before the company’s year-end in September.

One thing it won’t include is a strategy to grow the deli side of the business – this makes up less than 10 per cent of sales but Fernandez Pardo says increasing this would require a separate infrastructure, for which there are no plans.

In the meantime, he is also focusing on making cost savings with a view to increasing wage costs by 2 per cent to help with staff retention. This will have to come from operations because food quality
will not be compromised and margins on that side are tight, even with the savings gleaned from working directly with suppliers and producers.

As for the longer term, Fernandez Pardo is an investor in three other restaurant projects, two with his brother and all with Spanish chefs. He won’t discuss details but one is StreetXO, an Asian fusion street-style restaurant launching in Mayfair later this year by Spanish chef David Muñoz following the success of StreetXO Madrid and DiverXO, which holds three Michelin stars. Despite the variety in his early career, Fernandez Pardo is now committed to working in the restaurant sector, and with Ibérica.

He says, however, that he is not the right man for the job if Ibérica truly fulfils the potential he wholeheartedly believes it has. This admission is given bluntly and without any sense that he is, in the typical Spanish style he talked about earlier, selling himself short – rather he is very aware of where his strengths lie.

“We have 200 employees now but in one year, that will more than double. When Ibérica reaches that point I will need to bring someone in to help with managing a company with 500-plus employees. That is not me.”

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