“Currently, export makes up 10% of the company’s turnover and Wedel’s products can be found in over 60 countries. We gear our products to specific clients’ needs – for example, in products dedicated to Arabic markets, we have totally eliminated alcohol as a conservant” – interview with Maciej Herman, CEO at Lotte Wedel.
The Wedel company has developed the factory and increased export in recent years. Please tell us about this changes.
Be open for changes is the key element of our mission (“We are constantly changing to make us and our clients happy”). Changes that happened in Wedel in the past years were multidimensional. The first dimension is the factory and production area. Thanks to the modernization, Wedel factory is highly automatized, and also more flexible to customers demands. The second area of the changes is organizational culture transformation. Last year we redefined our mission and vision, and also our organizational values. We began to build employee awareness in this area both at the level of the entire organization and at the individual level. The purpose of it is to increase Wedel’s competences that will give the company more and more innovative view and quick solutions that will help us and our customers achieve their goals both short and long-term.
Third thing is our portfolio expansion. 2019 was the first year of our high quality premium ice cream offer introduction. When it comes to export – we are continually working on geographical expansion to deliver our products to other countries. Today we are present in 60 countries around the world. We are present in almost all EU countries, US, Canada, expanding our business fast also in Russia, middle east, Africa and far eastern Asia. We are adjusting our offer to specific clients’ needs. For example, in products dedicated to Arabic markets, we eliminated alcohol from ingredients list. Our R&D department is working constantly to meet various customers and countries expectations and demands.
Does the foreign consumer like Ptasie Mleczko® – as each Pole? Please tell us about the export hits on different markets.
We are exporting Wedel’s classic products mainly, which are becoming bestsellers in various countries and are already loved by local consumers. These include Ptasie Mleczko®, Torcik Wedlowski (Wedel premium wafer), Barrels (alcohol pralines) and dark chocolate tablets. Ptasie Mleczko® – product invented by Jan Wedel almost 100 years ago, number 1 chocolate SKU in Poland – is a top quality chocolate covered foam, due to historical reasons popular especially in Eastern Europe countries. However it gets more and more popular also in other regions.
Up-selling and consumption convenience are the most important sweet trends in recent years. Has foreign consumer similar requirements?
Yes, definitely. A modern lifestyle is quite similar everywhere. We see similarities not only in the ways of shopping or consumption, but also in flavors preferences. For example, the most popular flavors worldwide are caramel, coconut and chili. Thus of course, Wedel has these kinds of chocolates in the portfolio. When it comes to caramel, we have preceded this trend, by introducing very innovative Wedel’s caramel chocolate (Karmellove). This is pure solid caramel chocolate, not filled one. As far as I know we are the only mass producer in the world producing this kind of chocolate. It started with our R&D experiment, market test, but very quickly became regular products’ line, ahead of global trends.
Regarding to premiumization, people get richer in most countries, so they can afford more expensive products. In the mature and stable markets few percent increase per year largely comes from increased sales of premium sweets. That’s why we are also developing premium lines, which includes sophisticated chocolate tablets, highest quality pralines and also premium ice cream.
The year 2019 was not easy for the trade. For which perspectives are you looking for the next years?
2019 was tough for Polish market. 2020 we expect not to be easier. There is a significant increase of operating costs, like energy, labor costs, taxes etc. On the other hand, we expect a stagnation of consumption and growth of inflation. We already noticed high price increases announced by various producers. Despite these difficulties, thanks to the good strategy and preparation, we are reaching our ambitious targets. We are achieving them thanks to the non-standard chocolate activities and developing completely new businesses. First we are expanding our business in new countries, second we entered into the ice cream category, which grows much faster than chocolate in a lot of countries.
Potential world crisis should not be a big issue for us. We still remember year 2008, which showed that the consumption of sweets is very much linked with the improvement of humor in bad times.
The global challenges, which stands before each international company are….
There are many global problems that should be fixed. The most important thing is to find a way to grow in a sustainable way long term. Politicians but also business are the creators of the modern world and should actively respond to global problems related to environment and society. As Wedel, we are in the constant process of developing our CSR Strategy and activities. The pillars of it are strictly connected with global challenges that we want to answer: people (employees, local communities, business partners and consumers), innovation (including sustainable development) and the environment. The world around us is dynamically changing, new challenges appear almost every day – we want to respond to them, always being open for a safe interaction with the environment, to secure next generations future.
Thank you. It was nice talking with you.