Fazer to focus on Poland
confectionery group, says it is planning to tap into the huge
potential of the Poland market. According to CEO Karsten Slotte,
the company is set to play a role in the consolidation of the
fragmented market, a move that will allow it to increase its
presence in the premium chocolate sector.
"In general there is over-production of confectionery products in Poland," Slotte said in an exclusive interview. "Under these circumstance future consolidation within the market is an inevitability and Cloetta Fazer aims to play a key role in this future consolidation. This means that acquisitions are the most likely way of addressing the current problem of pricing levels within the sector."
Currently Cloetta Fazer operates its core, and highly successful markets in both Sweden and Finland. However in recent years sales in Norway, Denmark and Poland - the other main markets - have all suffered from falling turnover. Obviously the size of the Poland market, in comparison to the other Scandinavian markets, and its level of economic development mark it out as having plenty of potential.
"For us Poland is a particularly interesting market," said Slotte. "It has a population of 40 million, which is more than all the Scandinavian markets put together and the current level of economic growth means that there is plenty of potential, particularly in the premium sector, which is Cloetta Fazer's niche. We have now been present in this market for ten years, so our brand identity is strong. Added to this the fact that the country has growing income levels and that consumers are becoming more choosey about the type of chocolate they buy, we believe that our products will show increasing potential."
Although Slotte mentioned the added potential for importation and exportation brought about by Poland's accession to the European Union, he also said that the company's manufacturing facility in Gdansk showed little potential for further expansion, suggesting that increased production volume would come from acquisitions. He also added that the size of production facilities in both Sweden and Finland would dictate that they would remain production hubs for the foreseeable future.
Currently the company has a PLN1.5 billion (€33m) turnover in Poland and is estimated to command a 10 per cent share of the total chocolate market. Although consumption levels of chocolate are still relatively low - 5 to 6kgs per person per year compared to 12 to 13kgs in the UK - Slotte believes that as the market continues to grow demand for premium chocolate will increase at greater levels than other confectionery sectors.
