In order to achieve his first objective, Schultz, who replaced Stephane Batoux (who left to work for Coca-Cola HBC) at the start of April, mainly relies on new product launches and the distribution chain’s expansion, with the major challenge for 2012 continuing to be Romanians’ weakened purchasing power.
Danone, the largest player in the Romanian dairy industry, ended last year with turnover of RON503 million, up 5.7% from 2010, thanks to new product launches and high prices, amid similar volumes as in 2010.
“We see a single-digit growth for this year,” the new general manager of Danone Romania said, without providing an exact level.
According to data supplied by Danone, the market of fresh dairy recorded a 4% rise in value last year, while volume sales remained the same. The market was estimated at EUR266 million, including sales on the sour cream segment.
As for the plan to boost yogurt consumption, it comes as the local market has been at the bottom of such a ranking in the region. While a Bulgarian eats 19 kilos of yogurt per year, a Hungarian – 11 kilos, and a Frenchman – 35 kilos, a Romanian only consumes 5 kilos of yogurt. Romanians consume less than one cup of yogurt per week on average.
Investments in milk production
Last year, the company earmarked RON16 million for investments in upgrading its yogurt plant in Bucharest. Danone says it mainly uses milk sourced from Romania, through partnerships with 57 local farms, from which it collected 65 million liters of fresh milk last year.
Danone Romania intends to get involved in developing family farms as of this year.
“By 2013, all farms must get their milk to comply with European standards. Basically, unless they do this, they won’t be able to sell their milk because no processor will take that milk,” said Danone officials, without specifying clearly how much of the fresh milk produced in Romania is not up to standards.
The company’s objective is for 800 family farms to be able to deliver European-standard milk, with the project to entail investments of EUR1.6 million over the next three years, plus European funds of EUR0.5 million. The project will be conducted by Danone Romania in partnership with Heifer International, a non-governmental organization involved in rural development at international level.
(English version by Daniela Stoican)