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For us the Bulgarian market is important and with great potential

Issue 7, September 2009

Date: 01/09/2009 Comments: 0
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For us the Bulgarian market is important and with great potential

 

Mr. Muntean, would you, please, present yourself to our Bulgarian readers?

My name is Radu Muntean, I’m the General Manager of Overseas Group Ltd, having its headquarter in Bucurest, Romania. I’m 38 years old and have almost 18 years experience in FMCG’s. Although due to my background I’m an aircraft engineer, the education stage that obviously marked my business career is related to an American Program for Executive MBA that I graduated in 2002.

Would you also present Overseas Group and its main products?

The company which I represent is part of a Group of companies with mixed capital, Belgian-Romanian, running a +100 million EUR business on the Romanian market. Besides the trading company, the Group owns two of the most modern and big production units of milling and bread-baking in the Eastern Europe. These factories represent important investments in technology due to the most technically advanced Buhler (Switzerland) milling machines for wheat and corn, as well as the most modern Buhler and Pavan (Italy) production lines for pasta. The milling capacities go over 20,000 tones per month, while the production capacity of the pasta line overpasses 2,000 tones per month.

From this perspective we are a group of companies vertically integrated, having both efficient factories and a strong distribution network. In the domains of milling, bread-baking and pasta we control perfectly the entire supply-chain, from the quality of the raw materials, to the production of finished products and their distribution on the market and placement on the stores’ shelves.

Our products portfolio is focused on two important brands – Baneasa and La Grande Famiglia – brands that gather under their umbrella a widely diversified range of products: wheat flour, corn flour, pasta with all types and forms, canned vegetables, canned fish, mushrooms, canned tomatoes, ready meals, pasta sauces as well as other different sauces etc.

You can find many other details about us and our products visiting the websites of our Group: www.overseas.ro, www.pastebaneasa.ro.

What makes Overseas the pasta leader on the Romanian and the Moldavian market?

Overseas is at this moment a recognized leader in both volume and value in the pasta market and flour market and a leader or among the first 2-3 players in all the other product categories we activate.

When we talk about our own production, our main competitive advantages are the advanced technology and our obsession for quality. Our factories are ISO and HACCP certified and updated with all European norms regarding hygiene and food safety.

If it comes about the products we sell under our brands, then our differentiator is our power to negotiate big quantities, which ensures our access to competitive commercial conditions and prices.

More than these competitive advantages, our experience of about 20 years in distribution and, last, but not least, the passion that joins our entire activity happily completes the list of strengths that has been maintaining us always on the top of the FMCG’s players.

Today the consumers needs are changing fast. How Overseas Group managed to respond to this needs? 

Our main competitive tools are the range diversity and competitive prices, correlated with the quality of our products. These qualities give us all the reasons to be optimistic about the future and maintain our belief that we’ll always be able to find suitable and valuable solutions in terms of portfolio and prices. In fact, in Romania, we register a sales growth of 5 to 15% comparing with the last year, during a general hard time of economic crisis and recession.

Do you think that there are differences between the consumers from Eastern and Western Europe?

Analyzing the pasta market, the main difference comes from the place that pasta occupy in the consumption habits of the consumers in the two mentioned regions. In Western Europe the pasta consumption reaches 10-12 kg/capita/year, while in the Eastern Europe this consumption level still remains around 3-5 kg/capita, which opens an important growing potential in the Eastern Europe, as well as very attractive investment opportunities. The pasta market will continue to develop many years from now on, showing annual growth rates that one could hardly imagine in many other FMCG markets.

Another important difference comes up from the different purchase power, pocket share, but, fortunately, pasta is not an expensive category of products, the purchase of a pack does not represent an important financial effort for an average consumer. However, comparing with the Western Europe, we can notice a higher interest for the cheaper market segments in the Eastern Europe, this detail representing the base of a spectacular development of private labels’ segment.

Why did Overseas decide to come to Bulgaria?

Because it is an importantly big potential market for us. More than that, Bulgaria is very convenient in terms of geographical proximity – especially from Bucharest, the main location of our factories.

Regarding the culinary habits, the consumers of the two neighbor countries resemble very much.

The domain of retail is continually changing, becoming more modern in Bulgaria, too, which enlarges the distribution and availability of products to a even larger category of consumers.

Another reason we’ve come to Bulgaria is that pasta industry here has not benefitted in the last years from massive investments in technology and also because the quality of the pasta we produce is clearly superior to the similar products in the local Bulgarian market. Our pasta have no structural imperfections, they have a very pleasant color and taste, don’t stick when boiling and keep their initial shape. In addition, the texture of our pasta allows the sauces to be incorporated perfectly, offering a real satisfaction even to the most refined connoisseurs in the domain. From all points of view our pasta reach at least the quality level of those imported from Greece or Italy, (which is proven by all the boiling tests and laboratory analysis). But, very important, the prices of our pasta are adapted to the economic conditions and purchase power of the local market. Briefly, our strategy is to fill a gap on the market, to convince the consumers of local pasta they can get a better quality for pretty much the same prices, and the ones of the imported pasta they can have a better quality at more reasonable prices.

At the end of the day, we should mention that Bulgaria is just one stage among our development plans in the region.

What are your plans for the Bulgarian market?

Overseas aims one of the first two-three positions in all the markets we’ll become active in Bulgaria, but, if we talk about the pasta market, our main objective is to become market leaders in both volume and value. We have all we need to reach these goals, from modern production capacities to the strong know-how and stable financial power.

We want to develop rapidly and consolidate the food products brand La Grande Famiglia and maybe other brands if the market will show us such a need. Our products will be distributed on a large scale, being available in consistent volumes in a large number of traditional stores and, I hope, in most of the international retail networks, as well. Our 15 years experience with all the international retailers present in Romania make us be optimistic towards the cooperation possibilities with the international networks in Bulgaria.

We have recently opened an office in Sofia because we wish to get involved in the business directly, to be close to our consumers and distribution partners, to understand more intimately the specific features of the local market and rapidly and efficiently adapt the permanent dynamics of the market. Our team in Bulgaria is managed today by Mr. Penko Vargulev, a young professional that has years of experience in local and international retail. The team will grow according with the local needs and the dynamics of the business.

We also consider the possibility of making an investment in a production unit if the market will request that in the future.

Which would be the first products you will present to the Bulgarian consumers?

The products we will focus on mainly in the first stage are also the ones we are specialized in, the pasta. The first products we’ll approach the Bulgarian market consistently are not quite new on the market. I refer to the La Grande Famiglia pasta, in a version and range especially created for the Bulgarian market, products that are being distributed in Bulgaria in the traditional stores since more than two years. It has been, if you want, the stage of tapping the market, in which we tried to become familiar with the local specific needs and build a strategic plan on a long term. What is now going to happen in Bulgaria will represent a professional approach of the market, attentively segmented on every distribution channel, while building the brand carefully, a brand that will have soon a decisive word to say in the food product domain in Bulgaria.

As our strategy will be turned into practice, we will bring in Bulgaria some other products we make – wheat flour, corn flour, semolina, dried crust – but also the products we sell, like canned food, for instance.

Besides your own branded products, you are also producing private labels for supermarket chains. What was the main reason behind the decision to doing so?

The decision to enter the private labels segment was taken many years ago, our Group being practically among the first producers of private labels in Romania and, for sure, the first one in the industry of milling, bread-baking and pasta.

The main pros for private labels production are especially related with the production capacities and costs optimization, as well as with the optimization of the logistic costs and the building of strong business relationships with the distribution partners. There could be also strategic reasons to be present in all market segments and competitive reasons generated by the competition challenge. There could be also marketing reasons based on the fact that we want to understand intimately the needs of all types of consumers. All in all, the accumulated know-how from production and selling private labels is an extremelly valuable resource for us and it contributes consistently to our success.

Which supermarket chains are you working with?

In Romania we collaborate in extremely good terms and conditions with all, and I insist – absolutely all – the modern retail chains. I would like to mention in this respect Metro, Real, Carrefour, Kaufland, Cora, Auchan, Billa, Selgros, Plus, Penny Market, Profi, Del Haize, etc, partners to whom we deliver almost 1000 tons of pasta per month, packed under our private label. We also produce private labels for many of them, which makes our collaboration very strong and, in the meanwhile, very complex and challenging. At the moment we produce more than 500 tones of pasta per month under the private labels of the supermarkets’ chains.

In Bulgaria we have already contacted almost all the supermarket chains, I had the pleasure to meet personally almost all the buying managers and responsibles of those networks and present our plans and intentions. Now we are in an on-going process of offering and launching concrete collaboration proposals towards all these potential partners and I am confident that our products will manage to enter the shelves of the supermarkets very soon. I would like to mention that the placement of our products on the shelves will be supported by very strong and efficient promotional campaigns, meant to rapidly attract the consumers’ attention and to stimulate their purchase decision.

I’m glad to announce that we have already started a business relationship with the chain Fantastico in Sofia and I would like to take this opportunity to thank them for their trust and for the fact that they offered us the chance to demonstrate our potential. I’m quite confident that soon all the other international players would consider our proposals very interesting.

In the traditional retail we are already present with our pasta in more than 3000 points of sales, with the support and through the logistics of our partner, SOLARIS 999 EOOD, having the headquarter and central warehouse in Plovdiv and other four regional warehouses in Sofia, Burgas, Varna and Haskovo. During September and October will propose our existing and potential clients from the traditional retail a strong campaign for increasing the numeric distribution and the shelf placement, by ofering specific incentives for the consumers and the staff of the stores, and for the owners of the stores as well.

Do you plan to produce private label products for a local Bulgarian chain?

This aspect is part of our strategy to approach the Bulgarian market. The private labels segment is very interesting for us and we believe we can be extremely competitive in terms of quality and delivery costs for both the products we produce and for those we just sell. The fact that we have very big seasonal contracts and thus buying important quantities from our suppliers gives us reasons to believe that we can provide competitive conditions even for the canned food categories, a segment where we are very active. Gradually, we’ll propose the supermarkets in Bulgaria a very wide range of products under a private label/brand  and I’m sure that we’ll deliver these type of products quite soon.

PROGRESSIVE magazine Bulgaria

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