“We’ve never given up. Every year we found solutions to offset the decline on the domestic wine market. In 2010 we opened offices in China and Poland and that’s how we offset it,” Virgil Mandru, Tohani owner, told ZF.
“Meanwhile Poland declined, too, and that showed in 2012. We now felt we needed to get into this water market, complementary to our industry.”
Mandru did not reveal the value of the deal. His company bought the water bottler from seven Romanian individuals and posted EUR1 million revenue last year.
The new owner says sales of mineral water will reach EUR2 million this year.
Cheile Bicazului is a medium-low brand sold in Kaufland, Selgros, Billa and Auchan retail chains and its market share is very small. The businessman said his intention was to turn Cheile Bicazului into a premium brand.
Tohani, which posted EUR9 million revenue last year, entered the mineral water market through this acquisition, one of the few segments of the food industry still dominated by local companies. The mineral water market is estimated at EUR300 million to EUR350 million.
The top selling-brands by volume last year were Borsec, followed by the private labels of the major retailers, Izvorul Alb (Coca-Cola HBC), Bucovina and Kristall Perle, bottled by a small company based in Cluj (NW Romania), according to Nielsen data.
On the other hand, Tohani’s wine business should generate EUR11 million sales this year, Virgil Mandru says, which would see it return to 2011 revenue. Growth should come from the development of product portfolio and exports returning to 10% of the revenue, from about 6% last year, he added.
The businessman says the wine market continued to decline and the premium segment posted the best results.
“The year 2012 saw an overall decline of the wine market, which affected us, too, as our business dropped 8% and we’re trying to offset it in 2013.”
Tohani’s sales of premium wine brands increased, the entrepreneur said.
The wine market is put at about EUR350 million and the biggest winemakers are Murfatlar, Vincon, Cotnari, Jidvei, Halewood and Tohani.
(English version by Loredana Fratila-Cristescu)