Polish FMCG sector current situation and forecasts

Thursday, 13 October, 2022 Food From Poland 39/2022
Małgorzata Cebelińska
Trade Director
SM Mlekpol

Mlekpol Dairy Cooperative is built on solid foundations it has been reinforcing for 40 years. Our basis is the high quality of milk provided by farmers who are members of the Cooperative, allowing us to manufacture high-quality, healthy and tasty products to reach the Polish market. Sales within the European Union and exports are highly important to Mlekpol as well. 30% of the entire production reach foreign markets. High currency exchange rates make sales outside Poland profitable, therefore, Mlekpol will take care to maintain it on the highest level possible. Our own stable base of raw materials is of high value and the strength of the company, allowing us to carry out orders from our regular customers and to acquire new ones. 2021 closed with a record-breaking purchase of milk, exceeding the limit of 2 billion litres, and a positive financial result. In the same year, SM Mlekpol obtained the title of Eco-Investor of the Year and received the Economic Prize of the President of Poland in the “National Success” category from the hands of President Andrzej Duda himself. The current economic situation poses a serious challenge to everyone, especially due to the increase in costs of raw materials, production, energy or transportation, as well as to the runaway inflation. The disrupted supplies or shortages of different additions and inputs for production are becoming an increasing problem. The Cooperative’s production is growing year-on-year, and the initiated investments in automation and new technological solutions at processing plants will contribute to the  optimization of processes as well as reduction of maintenance costs. However, one should say this is a year full of difficult challenges and anxiety.

Vlatka Jurčić
Marketing Director
Dr Gerard

This year, like the previous 2 years, turned out to be full of surprising events again. As we were going back to normal after the pandemic, we learned of the attack on Ukraine. However, despite all the anxiety and turbulence on the market, we have achieved very good sales results, and March has been a record-breaking month in the company’s history. However, we are still facing many unfavourable circumstances – the increase in raw material prices, caused by the inflation and the war in Ukraine, has forced us to increase product prices, which is always a difficult decision for a company. We know consumers in Poland are looking at their expenses with increasing anxiety and have to make difficult choices when standing in front of a store shelf. We are all the more happy that our products keep reaching their baskets, which means they appreciate the quality, taste and wide range of Dr Gerard products.

We are also satisfied with the results of our exports. Although we have completely suspended our sales to Russia and Belarus, that gap has been more than filled in other export directions.
Despite the turbulent and uncertain times, our company is looking into the future with optimism – we have plans to introduce new products, as well as to modernize our production lines, which will allow us to compete on the market with even more efficiency. The recent global turbulences, out of which we have emerged unscathed, prove that a crisis is not just a risk but an opportunity for companies like Dr Gerard, capable of adapting to rapidly changing conditions.

Jacek Wyrzykiewicz
PR & Marketing Services Manager
Hochland Polska

Hochland Polska is a well-organized enterprise and even in difficult times, it is able to provide virtually uninterrupted availability of its offer to the market. The dairy industry, both on the domestic market and globally, is acutely perceiving the results of the current situation. The war in Ukraine, the growing prices of gas and electricity, the increasing interest rates of the National Bank of Poland, and the potential new wave of the COVID-19 pandemic – all of these events augur new price increases ahead. Furthermore, new hazards, of extreme importance to processing plants, are looming on the horizon – namely, the amendment of regulations concerning energy supply limitations.

Nowadays, of particular importance is the ability to make quick decisions which help one pass successfully through the reborn crisis. Milk processors are being forced to shift the growing costs of dairy raw materials, as well as other costs related to production, wages or logistic issues, to their clients and further consumers. In the longer term, new, increased prices may limit the consumers’ willingness to shop, slowing down the sales as a result. A drop in demand, on the other hand, may eventually force reduction of the milk price, as more of the raw material would remain on the market.

In such difficult times, it is also worth speaking about achievements; one on our part is the new Almette cottage cheese the sale of which has just started. This is a concept standing out in the market, surprising due to its modern interpretation of classical cottage cheese. The line includes three taste variants: with gentle ricotta cheese, with cream curd, and with natural skyr, a recipe for taste pleasure without precedence in this product category.

Robert Ogór

Despite the deterioration of consumer confidence, we have achieved very good sales growth. Our products, especially the new ones, are appreciated by consumers. We will invest in further development of our business: we modernize our production plants and make them even more environmentally-friendly. In the financial year that has just ended, we have cut our carbon dioxide emissions by 20%, and by the end of 2022, we will achieve zero net emissions at our Biłgoraj winery. This will be the first zero-emission plant in the alcohol industry in Poland.

The beginning of this year had not portended any of the changes that occurred in the following months. The increasing inflation, the war in Ukraine, the increase in prices of energy and major materials have all caused an increase in the costs of business of the AMBRA Group and deterioration of the situation of consumers, forcing their limitation of purchases of many goods and services. Although the demand for alcoholic beverages is relatively less susceptible to the effect of such negative factors,  the recent months saw a reduction in expenses for many alcohol categories, including still wines. On the other hand, the consumption of sparkling wines was still on the rise. 

In such an unfavourable environment, the sales of the main products and brands of the AMBRA Group definitely outran the market dynamics, growing by more than 15%. One of the quickest-growing segments of the market was comprised by alcohol-free wines.

For 13 years, AMBRA  S.A.  has been uninterruptedly distributing stably growing dividends.
The good financial and liquidity standing of the AMBRA Group has allowed the Management Board to propose a dividend of PLN 1.00 per one share to be paid for the year of 2021/2022. In May 2022, in the Heroes of Capital Market vote organized by the Individual Investors Association, AMBRA was distinguished in the Dividend Listed Company category.

Iwona Łagodzińska
President of the Board

Terravita has been successfully operating on the market for almost 40 years. Our products have found their followers who invariably choose our quality and taste, regardless of the economic or political situation. A thoroughly elaborate strategy has allowed us to develop further, in these difficult times as well. The foundation of our business is chocolate bars which we offer to our customers under our well-known Terravita, Alpinella, or Cocoacara brands, but also under private labels of our clients. With our chocolate assortment, we are present on almost 30 markets in Europe, Asia, North America, and Africa. An important share of the company’s exports is comprised by South-Eastern Europe, which is why I follow the situation beyond our eastern border with particular attention. A significant event was the deletion of chocolate products from the list of critical import goods, announced in February 2022 by the Ukrainian Council of Ministers, resulting in resumption of sales to one of Terravita’s key outlets. We should not forget about an important part of our business, comprised by confectionery semi-finished products which we offer to our Customers under the Terravita and Bellaria brands. A wide assortment of such semi-finished products like chocolates, spreads, confectionery icings, or dessert sauces, is directed to B2B customers: confectioners, bakers, and the confectionery industry. Moreover, Terravita is a major producer of ice cream toppings in Europe. This season, I was pleasantly surprised by the development of the category of dessert sauces which, apart from the continual presence at catering establishments, have also appeared on the shelves of one of Poland’s major retail chains. I can agree the times are tough. The level and pace of the changes are hardly encouraging for risk takers. However, we at Terravita follow the philosophy that in order to stay on the market, we need constant development. Customer trends and expectations are changing. As a manufacturer, we cannot disregard them. This is why we invariably focus on development and investments.

Renata Błądzińska
Senior Marketing Manager

2022 has been a special year for our company. This year, we celebrate a unique jubilee of 30 years in operation on one of the most prospective markets of the world – the confectionery market.
Our quality, makes our consumers smile, and pursuit of trends, have been the features which have propelled us through the 3 decades of our passion for caramel.

In spite of difficult and economically unpredictable times, Argo does not slow down, successively reinforcing its position, both on the domestic and international market. Exports are definitely crucial to us and significant in the context of the company’s general profits. Almost 50% of our production is sent to foreign markets.

The growing inflation, with raw materials and energy prices getting more expensive, mean serious challenges, but on the other hand, they also provide a moment of increased motivation and inspiration to act. In the times of constant changes, we adapt our offer to new market realities, we implement new products, and we are not afraid of introducing innovative ideas which may be surprising. Innovation is the driving force behind our growth and a source of value.

Soon, our portfolio will be expanded to include new products, enjoying much popularity among foreign consumers. We approach every implementation with particular detail and attention. Therefore, we hope all of our planned implementations will win the consumers’ hearts, especially that they will also include products supplementing our portfolio, which we have never had so far. The first innovations will premiere at the SIAL Paris fair. First of all, we are focusing on European markets, but we also think with more and more confidence, about scaling our sales to new non-European ones.
Despite the exceptionally difficult times, we look into the future with optimism.

Sebastian Romaniak

The development of the transport branch has been evident for several years. The market and the needs of our customers have enabled our development in the area of the functionality and flexibility towards the customers. For many years, transportation had been subject to special, often contradictory regulations; nevertheless, we have managed to systematize the entire system so we could operate with resilience and develop.

We have been surprised by the geopolitical situation we had been completely unable to foresee, just like we could not have predicted what consequences it would entail. The increase in fuel prices and other semi-finished goods used in transport has overwhelmed all recipients and suppliers. However, making the customers aware of the causes for price instability, numerous conversations and analyses allowed us to develop appropriate conditions for cooperation.

Apart from the quality of our services, of special importance to us is the equipment we work with. We place much emphasis on appropriate servicing, inspections, and maintenance. We do not accept any technological shortcomings.

Additionally, we put much emphasis on partner relations with our clients, treating each other as equals and following the “win to win” policy. We value the loyalty, sincerity and trust we try to give to our customers, and we expect them to do likewise. At any time, they can count on our assistance and consultation in the area of transport organization. We also assist in the structuring and reduction of expenses, sharing our experience and knowledge.

In the nearest future, we plan significant expansion of our fleet, broadening of our storage services, as well as further expansion into European directions. We will focus not just on service of full-load freights but will devote more attention to less-than-truckload ones. All of it, of course, under controlled temperatures, with appropriate safety precautions.

Marek Moczulski
President of the Board

We are currently facing high unpredictability on the market. Raw material prices are quickly changing, sometimes twice a day. The prices of energy or all other costs of production are going up as well. We cannot be sure what the situation will look like in a month or two, or even earlier.

The consequence is a challenge for us all, concerning, among other things, prediction how consumers would behave in this situation.

We strive to be more efficient, but there are limits to that. We try to adapt our prices, but we are unable to pass on the entire increase of raw material prices or costs of production to final products for the consumer. Currently, we are experiencing an uncertain situation connected with the inflation and the results of a crazed policy through which the energy becomes an unimaginable luxury.

In exports, we have been facing radical growth of transport costs for the last year and a half or two years; the cost of a container has increased many times. There are also uncertainty-related issues connected with sea port downtimes, accumulation of products during one period, or Covid restrictions, which has not come back to normal so far. There are delays by one or even two months.

Another problem is the Polish products becoming less and less competitive.  Costs of production are rising rapidly and our products may become unattractive in comparison with others.

We are one of the largest halva and sesame snack manufacturers in Europe. In spite of many challenges, we have substantially reinforced this position on the Polish market over the last six months. Additionally, we have acquired significant new recipients on international markets. Despite all the disruptions, we look into the future with cautious optimism.

Magdalena Brzezinska
Corporate Director
Żywiec Group

Due to the cumulated events of the last few years, business is facing unprecedented challenges today. The beer sector has not recovered yet from the sales drop caused by the pandemic restrictions and the double increase of the excise tax, and now it has to struggle against the enormous inflation of costs of production, especially of energy, and the new disruption of supply chains, caused by the war. Additionally, consumer confidence has currently reached its lowest level since the outbreak of the pandemic, which translates to sales of such products as beer.  Changes in consumer customs after the pandemic (less frequent shopping, and less frequently in small stores) have resulted in drops in the largest segment of pale lager, comprising above 80% of the market. Although non-alcoholic beers are still recording increases, especially during the season, their segment is still too small to compensate for the drop in lagers. Despite such unfavourable circumstances, we at the Żywiec Group go on with our development strategy, trying to respond in the best way possible to the changing consumer needs. This is illustrated by the success of this year’s new product, Heineken Silver – the bestselling innovation of the present season. This beer responds to the consumers’ interest in lighter, more refreshing beers. Furthermore, we are still developing our non-alcoholic beer offer, and our new products from this year have met very good reception among the consumers.  Żywiec, our flagship brand, is doing well too. Under the conditions of such uncertainty, it is extremely difficult to make business plans. It is now that our long-year relations with suppliers pay off. Risk management has allowed us to secure enough raw materials to be able to implement our production plans for the entire season.

Mariusz Jaroszewski
Head of Analysis, Strategy and Business Development Department, Colian

The current economic situation makes conducting business a great challenge. The food industry, like all other industries, is struggling against perceptible price increases in every area of the conducted operations. The most acute problems are the payments related to raw material purchase, as well as limited availability thereof. In the recent weeks, sudden limitation of the supply of carbon dioxide used, among other things, in the beverage industry, has been raising our concerns. The beverage division of Colian, involved in production of the cult-status Oranżada Hellena orangeade, comprises a significant part of the company’s business. Shortage of this raw material means serious problems. We are also concerned to watch the increase of rates for electric power and gas, which, from the viewpoint of automated production processes, are the basis of all activities. Their share in budget statements is increasing each month. The inflation, as well as the uncertain geopolitical situation, force us to approach all activities with caution. An unquestionable success of our company is the fact that this spring, we commissioned a fully automated high-bay warehouse in Opatówek, the headquarters of Colian. However, the months to come will be a time of cautious operation. Colian is actively operating on international markets. Our products are exported to almost 70 countries and are highly appreciated by consumers. The company’s development strategy is strongly focused on export activities, but we also find obstacles here. Disrupted supply chains and high freight prices are a major hindrance. Nevertheless, we believe this situation to be transitional and we look into the future with optimism. Our goal is further efficient development and promotion of high-quality products in the international arena.  

Marcin Zieliński
Development Director
Makarony Polskie

Since the beginning of the war, the increasing prices on the markets of wheat, packaging, energy, and gas have been posing an unprecedented challenge to companies. Without this problem being solved, the competitiveness of European companies and the economic situation will be exceptionally difficult. A high inflation level may persist for some time, and the actions of central banks may restrict the economic activity even more.

In such a complex situation, we try to conduct business, but this puts up many challenges.
 As a company, we mainly operate in Poland, but exports are becoming increasingly important to us as well. So far, our main export market has been Ukraine, but since the outbreak of the war, the situation is continually becoming difficult and we need to look for opportunities on the Western European markets as well. Despite objective difficulties, we believe that with our modern and convenient products, such as ready meals in trays (we are a runner-up in Poland in this category), or vegetable pasta, we will be able to gradually increase our presence in the EU countries. In the nearest future, our main export activities will focus on acquisition of new clients from the EU countries and the maintenance of trade relationships with Ukrainian clients. We believe the situation in Ukraine will eventually stabilize and we wish to maintain our strong position in the pasta segment in that country.

To sum up, we will focus on the optimization of our business, implementation of synergy effects on this year’s takeover of a competitive entity, and carrying out an export growth strategy on new markets in EU countries.

Maciej Herman
Managing Director

Just after another wave of turbulences related to the COVID-19 pandemic, the food sector in Poland is facing new challenges. Price increases are present in most areas significant from our perspective, i.e. dairy raw materials (the average price increase during the year was 79%), sugar, packaging. Of much importance to us is also the weakening of the zloty with respect to all main currencies. It is due to purchases of the basic raw material (cocoa) taking place in Europe through the London commodity exchange, where the British pound is the settlement currency. Other adverse factors are the growing prices of fuel and energy. In response to these challenges, the Wedel company, just like its founders – Karol, Emil, and Jan – used to do, adapts to the dynamically changing circumstances, drawing upon its many years of experience, to emerge even stronger. In late August, we published the “Global and Polish Chocolate Market” report which, in spite of the difficult economic situation, predicts, following the prognoses by analytics, that the global chocolate confectionery market will keep developing steadily, growing by several per cent annually. In Poland, an increase in consumption of chocolate confectionery is expected – by 0.5 kg per capita over the next 5 years. In this regard, Wedel has a triple recipe for maintenance of the position of an industry leader: passion for creation of high-quality chocolate, further portfolio diversification, and creation of a customized offer.

Marek Marzec
Member of the Board

If we wish to conduct business – and we do, because we are made for this – we have no choice but to simply do our best, even under difficult conditions. This is indeed a crisis situation, but it is not the first crisis and surely not the last one either. Just as in any other crisis situation, one has to change the business philosophy; in this case, from long-term planning, encompassing a span 3-5 or even more years, to short-term planning concerning the next week, month, or quarter of a year.

Foodstuffs are and will be consumed. We have to adapt to the current situation, respond quickly, adjust our offer and satisfy the customer’s needs.

90% of our turnover are comprised by exports. Currently, our offer is available in 75 countries in the European Union as well as in more than a dozen Asian countries, a similar number of African ones, and several countries of North and South America.

Absolutely expansive exports may provide an impulse for development, as well as for stabilization. Food consumers are all the same around the world. Their expectations on individual markets are identical. And we have to offer a product to meet everyone’s expectations.

Different challenges have also emerged due to the war in Ukraine. We have been present on this country’s market for 25 years. When the war broke out, we were deeply affected and had to deal with it. The effect on global trade is not insignificant either: the disruption of supply chains, rapid price surges of individual services, and many other different things, but our purpose is to overcome these difficulties.

Our plans for the future are connected, above all, with consistent development.

Leszek Wąsowicz
President of the Board

The inflation and deterioration of consumer confidence are real economic forces affecting everyone. Unfortunately, the prices of raw materials are still rising, the zloty is weakening in relation to the currency of crucial importance for dried fruit purchases (USD). Besides, costs are rising every step of the way, from energy and materials to transport to WIBOR affecting the activity financing costs. As far as it is possible, we strive to neutralize the burden of increases on our recipients and final consumers, as can be seen from the lowering of HELIO’s profitability. We are very cautious about passing the increases on to customers, striving to mitigate the inflation’s impact on the consumer.

In the prospects for our sector, one may expect further reinforcement of the role of trade chain private labels, but also reaching for products of certain quality from trusted manufacturers. Although price will be gaining on importance, trust in a manufacturer and good quality guarantee will intensify as well. If consumers have to reasonably administer their basket on the “indifference curve”, they will not risk any failed purchases of dried fruit, even at the expense of several dozen groszy more for HELIO’s certified quality. It is worth stressing that HELIO quality means not just our umbrella brand but numerous private labels of leading trade chains. Simultaneously, we will take all possible efforts to minimize the price increase of our products, utilizing our 30 years of experience in purchase of raw materials and currency, and simultaneously, to maximize the benefits from the economy of the scale of operations. Our annual turnover in the retail segment is already exceeding PLN 300 million, making us the largest supplier of dried fruit on the retail market in Poland.

Evangelos Evangelou
President of the Board

The recent years have come as a shock to the Polish and global economy. Inflation has appeared, as an aftermath of the pandemic among other things, and today, we are all additionally facing the results of the hostilities in Ukraine. This is extremely perceptible, particularly in the areas of supply chain and energy purchase. Like almost every enterprise, we are paying very much attention today to the maintenance of the continuity of production and to the maintenance of profitability.

As early as this February, observing the increasing prices and the predictions concerning availability of raw materials, we have started preventive purchase of many materials, including raw materials, which could have been purchased earlier. Now we are in the middle of the season of harvest and the purchase of herbs and fruit which, despite decreased availability of certain species, is going promisingly. Unfortunately, the soaring prices of supplied energy make the production cost of raw materials and semi-finished products several times higher in relation to the previous years.

We also remember that being a large enterprise, our actions have a measurable effect on our surrounding. We are a responsible company which chooses local suppliers when purchasing raw materials to support Polish business. Sadly, the difficult price situation on the market forces many of those suppliers to amend the previously signed contracts, trying to save their enterprises. Thus, we cannot remain indifferent and are obliged to bear higher expenses to support both their and our business. We do so because our development is closely connected with the success of many smaller regional entrepreneurs. In my opinion, local business support is one of the most eminent cases of sustainable development, which cannot be forgotten in these times of crisis.

Bogdan Łukasik
Modern Expo

Questions about how a company fares during a crisis are never easy to answer. Crises vary. The current turbulence is of global nature, even though Europe is affected most severely. First, due to the Russian military aggression in Ukraine and the related energy problem; secondly, due to the structure of the European economy. Certain issues had been neglected or treated overly optimistic, and now, the entire continent will pay a high price for that. Let us have no illusions; this is no short-term turbulence. In my opinion, we have to brace for a long period of recession.

Modern Expo is certainly a special case. The Russian aggression has dramatically changed our situation. We have lost access to two vast markets on which we used to have a dominant position, and we are facing a real hazard to a part of our production infrastructure. I might be surprising now, but this is the end of the bad news.

Over the 25 years of its operation, Modern Expo has faced many challenges. It could be said that we have built a natural resistance to crises and we defiantly consider each of them a new opportunity. This is the case right now as well. This results from three factors: a very solid organizational and technological base, our agility in work on the market, and our proactivity in the areas of product and sales. The best proof is our project for the Allegro auction website, together with development of not just an excellent line of parcel terminals but also an entire range of services we can now provide to different segments of the market throughout the Old Continent, not only to retail chains. We also have products up our sleeve that may soon turn the current world of retail upside down.

A crisis may be an opportunity, but only if you have prepared yourself for it beforehand.

Joanna Semczuk
Trade and Logistics Director
Henkell Freixenet Polska

Our situation is certainly a little different than during the pandemic. We are impacted by completely different factors. Consumers adjust their shopping decisions to the affluence of their wallet. Unquestionably, the well-known, tested and reliable brands are strengthening, but verification takes place as well. The trend of smart shopping is reinforcing as well.

We are particularly happy with the spectacular success of Mionetto Prosecco, an unquestionable leader in the segment of sparkling wines for another year in a row. Mionetto is growing three times faster than the entire prosecco category!

As befits a leader, we have celebrated the International Prosecco Day (13 August) with much panache. There were competitions with prizes, held in social media as well as at stationary stores all across Poland. However, the greatest event was the special Mionetto Zone at the 762nd St. Dominic’s Fair, where one could cool down with a glass of the favourite prosecco of the Poles, taste some cocktails prepared on its basis, or even dance to the rhythm of dolce vita…

However, our portfolio includes more number one products. Lubuski Gin is a leader in its segment, whereas Dalkowski Advocaat is the favourite egg liqueur of the Poles.

We are also immensely proud of our international World Wine Project. We supply wines that have succeeded on global markets to different distribution channels. We have much to surprise lovers of good wine – the Henkell Freixenet Group owns many prestigious vineyards around the world.

Szymon Makoś
Export Manager
OSM Łowicz

The situation beyond our eastern border has been significantly affecting the situation in the dairy industry, both in Poland and globally. The impact of the armed conflict has been perceptible both in professional and private life. A part of our volume supplied to the Ukrainian market had to be relocated elsewhere. For several months, we have been facing constant increases in price of raw materials, milk, cream, fuel, gas, energy, which significantly translates to our cooperation with contractors. Customers are distanced to conclusion of long-term contracts, prices are confirmed no earlier than a month before the implementation of deliveries, and we are often forced to increase prices during the term of the contract. The market is very unstable, unpredictable, and the situation is rather unlikely to improve by the end of the year.

An unquestionable success of our exports is its large share in the total turnover of the company, comprising approx. 30-35%. We are expanding our portfolio, addressing the needs of consumers in many countries, and we gain new outlet markets. The interest in the colourful woman from Łowicz remains upheld and the products bearing her likeness enjoy much popularity, especially on the Chinese market where we have managed to develop fruitful, trust-based cooperation. We actively participate in many fair events worldwide, recording large increases in the numbers of visitors after a time of increased restrictions due to the pandemic.

Dariusz Goszczyński
General Director
National Poultry Council
– Chamber of Commerce

Poland is the largest poultry producer in the EU. According to the EC, the share of Poland in the EU poultry production in 2021 was 19.1%. The poultry industry was among the fastest-developing sectors in Poland, both in the area of agriculture and food processing. The value of the domestic poultry production between 2004 and 2021 grew at an average annual rate of 7.8% in comparison with 4.0% annually for the entire agricultural production. What contributed to the development of the market was both the increasing exports of poultry and the growing internal consumption. The development of production in Poland, especially with regard to broiler chicken, was possible due to the high price competitiveness of Polish products in relation to their quality and the growing demand at home and on foreign markets. The high production competitiveness was due to labour costs, still lower than in other EU countries, as well as a strong level of production concentration and integration, which is decisive for efficiency.

The year of 2021 brought a slump to the upward trend – the domestic poultry production has recorded the first slight drop since 2004. So far, the Polish poultry market has been characterized by large resistance to crises. However, the overlap between two unfavourable factors, i.e. the drawn-out downturn on the market of live poultry, caused largely by the pandemic of COVID-19 and avian flu, contributed to limitation of chick placements. The drop in production in 2021 was probably transitional. Over the first five months of 2022, the Polish exports of poultry meat and offal in terms of mass of goods grew by 5.2% y/y.

High uncertainty on global markets causes increased interest in Polish poultry meat. This August, Japan has decided to introduce regionalization in view of the presence of avian flu; this decision has enabled the launch of exports to this country. Moreover, there are advanced talks in progress, which should allow for even broader presence of Polish poultry meat on many markets in the upcoming months.

Emil Dzianok
Trade Director

The last two years have been a difficult and very unpredictable time for the sector. Several years ago, we have decided to diversify our business slightly in terms of directions or channels of sales. Concerning the strategy, we treat each part of the business completely separately, rather than as a part of a bigger picture. This has allowed us, among other things, to make more relevant decisions.

In the catering channel, we have mostly cooperated with institutional customers – such as schools, kindergartens, etc. Currently, on the other hand, we cooperate with hotels and restaurants. Our cooperation with distributors from those segments are completely different. In exports, a slight change of our strategy allowed us to open new sale directions.

The first measurable effects of such changes coincided with the pandemic. Thus, among other things, despite the lockdown on the catering sector which comprises a large share of our company, we managed to achieve sales growth utilizing the remaining resources. We ended the year of 2021 with sales growth amounting to 115.5% in relation to the previous year.

We are also steadily increasing our market share – according to the latest CMR surveys, at retail stores up to 2,500 m2, it amounts to 30.1% in terms of value.

According to our prediction, the present times are less favourable due to their unpredictability. The growing costs of ongoing operations, especially the surge in prices of raw materials, raise our deep concerns.

We are at the final phase of one of the greatest investments in our history, which will allow us to increase our production capacities and also to debut new product versions or new assortment lines. We hope a part of the solutions we propose, while not exactly innovative, has been unprecedented in our category so far.

Konrad Golczak
EWA Krotoszyn

The confectionery market in Poland is a centralized one, with a few large players accounting for more than a half of its value. Therefore, challenges are different for smaller players and for larger ones. The pandemic period has shown that people started paying more attention to product quality, which caused increased sales in the sector of premium confectionery. On the other hand, the current post-Covid period and the situation connected with the hostilities in Ukraine cause a range of negative connotations in the area of raw material prices and purchasing power. Drastic price increases of utilities and basic raw materials, together with runaway inflation, bring increased production costs. These costs have to be finally borne by the final customer, yet every product has a critical price level. These factors adversely affect the industry which may record a drop in sales in the years to come due to the loss of purchasing power by the consumers.

A modern customer is a conscious customer. More and more people pay attention to product specifications on packages and choose them consciously. The issues of product quality, their naturalness and elimination of undesirable substances, including synthetic ones, are increasingly appealing to the final recipient. Unfortunately, the current situation, caused by high inflation, may reverse this trend. Apart from composition, the cost of a final product may become a decisive factor for its choice.

The company plans constant development, yet this depends on the market situation. We are very intensely developing the food supplements and medicine production segment in which we intend to build Europe’s most modern production line next year, with fully digital operation.

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