About export hits of Terravita, portfolio changes over the years and challenges faced by confectionery producers we talk with Arkadiusz Majchrzak, Export Manager at Terravita.
What percentage of company turnover comes from exports? What is its development potential? What aspects of development do you emphasize most?
Export sales in 2021 accounted for approx. 45% of Terravita’s turnover and so far has shown a growing trend year to year, although this growth slowed down with the break of the pandemic. Unfortunately, this was reflected primarily in the limited opportunities for participation in foreign fairs and trade visits as well as direct meetings with Customers in foreign markets. I hope that 2022 will bring at least a partial return to the situation from before early 2020, which in turn will translate into a return to growth and increased sales.
Terravita’s export hits are...
Terravita’s export hits are primarily chocolates in our economic brand ALPINELLA 90g / 100g and large-format chocolate in carton packages, the gift edition of the TERRAVITA 225g brand. The premium slim chocolates COCOACARA 100g with high cocoa content in decorative cartons. The new line of TERRAVITA 100g chocolates, launched in September 2021, was also very well received on the export market and we are gradually expanding its sales.
Chocolate bars are the largest segment of the chocolate confectionery market in Poland and the basis of your business. How will you develop this category?
In fact, the basis of our offer and the best-selling products in our portfolio are chocolate bars: both in the Terravita brand and our second Alpinella brand. The plans for the next two years include the development and expansion of the product range in both brands. Economical Alpinella brand bars are extremely popular on the Polish market and even more popular on the Eastern European markets, which is why we will be introducing new products in the Alpinella range in the line of basic 100g bars in line with the trends in the confectionery market. These will be milk chocolates with fruit fillings, with flavours popular in Poland and Europe, and at the same time distinguishing themselves from the wide range of chocolate bars currently found on shop shelves. In the Terravita brand, in 2021 we introduced a completely new quality line of products. New flavours, new quality of chocolate and a new, attractive graphic design constitute the basis of the Terravita 100g chocolate assortment. 2021 was also a year of introducing several novelties: including the line of Terravita 235g filled chocolates, which turned out to be quite a success. By analyzing the data and the market situation, we planned to enrich this category with at least 2 new flavours. The portfolio expansion is planned for the beginning of the new season, i.e. September 2022.
How have the recipes of your sweets changed over the years?
Changes in our products over the years result from many factors. Of course, they are related to the development of products in the context of changing market trends as well as shopping habits and consumer expectations. Only a dozen or so years ago, the most extensive group of Terravita bar products were milk-filled chocolates. Today, the most dynamically developing segment are bitter, healthier, high cocoa products. The developing market and richer society are also reasons for looking for more sophisticated and original products of higher quality. All this influences the adjustment of product recipes to the standards currently required by consumers. The changes also apply to the quality aspects of chocolate products caused by updates to the laws and regulations defining the properties of chocolate products sold on the Polish and European markets, to which manufacturers must adapt.
The biggest challenges faced by confectionery producers in Poland and on foreign markets are...
The biggest challenge for the entire industry in the coming year, apart from the pandemic situation and the related change in consumer behaviour, will be inflationary pressure and a huge increase in operating costs related to the increase in the prices of energy, raw materials for production and packaging. In these conditions, maintaining a satisfying profitability of enterprises will be difficult. It will also be a big challenge to deal with unfavourable circumstances related to the availability of raw materials; poor harvests, limited availability of containers on the routes of East Asia-Europe and North Africa-Europe, and speculation on the stock exchanges further worsen the situation of confectionery producers.
Undoubtedly, the industry will be forced to raise the prices of its products. We will see how Consumers react to the change in prices and to what extent this will translate into purchases in the near future.