Innovation Opens New Perspectives

Behind Štark’s oldest brands is almost a hundred years of tradition and only this year is investing 8.5 million euros in a new, state-of-the-art, chocolate line

A year ago, shortly before the beginning of the biggest health crisis in the world, Marko Njavro became the head of Atlantic Štark as the general director of this Strategic Business Area Sweet and Salty. On that occasion, we talked to him about what the past year looked like, but also what are the plans for the future.

You have become the new GM of Atlantic Štark, which operates as the Strategic Business Unit Sweet and Savoury of the Atlantic Grupa – in the year of the biggest health crisis globally that affected all activities of the company. How did Atlantic Grupa react to the crisis? How have you adapted your business to the new circumstances?

I believe that we are from this strange, difficult, challenging, but somewhere good business year for us, because we realized sales revenue almost at the level of 2019 – we learned a lot. As a company, we came out stronger because of the optimization of our processes and the confirmation that our strategy is crisis-resistant, but we also managed to stay connected as employees. Looking back now, I would say that this very unity, with the previous stable financial position, business optimization and quality strategic planning, has brought us business continuity, job security, but also profitability under minimum negative consequences on revenues and record low indebtedness. First of all, what has been set as a priority is preserving health and safety of all our employees, but also regular supply of the market. Now, from this perspective, I can say that I am happy that we succeeded in that, but we also succeeded much more. We have preserved the company’s business, as well as regular income, but we have also paid-up annual bonuses to employees, which are regular benefits at the end of each year, and even bonuses. We also helped employees through various psychological protection programs, in order to have the most easily adapt to the new working conditions, whether they worked from home or in production that functioned regularly all the time. We provided as well additional financial support to employees affected by the earthquakes in Croatia, as well as pecuniary and commodity donations to national crisis staff in the combat against corona, in all markets in which we operate.

The Atlantic Grupa has always taken care of the community in which we live and work

How did the pandemic affect Atlantic Štark (SBU Sweet and Savoury), but also the confectionery industry itself?

Restrictive measures regarding the pandemic have significantly changed consumer habits in the purchase and consumption of confectionery products. Consumption outside the household is reduced, as well as impulse shopping, the frequency of purchases is lower, the time dedicated to shopping is shortened and the focus is on basic foodstuffs. Simultaneously, there has been an expansion of food preparation, especially desserts, in households. Specified changes were reflected differently in individual segments of our portfolio, especially negatively in the categories of chocolate, biscuits and waffles. The identified challenges and opportunities were responded to by integrated marketing and sales efforts with a foothold in the brands of already built stable credibility with consumers. Increased consumption in the household inspired the launch of larger packages (Smoki and Bananica) and more nutritionally attractive products (Prima grissini). Difficult buying conditions required tactical defence at the point of sale with enhanced positioning supervision, and competitiveness was supported by price-motivated actions.

Close to 40 percent of your products are marketed in foreign markets – how the pandemic affected that business segment, given that each country had some specific measures to overcome the current crisis.

The geographical structure shall remain without significant alteration under dominance of the Serbian market with a value share of 65%, where the success of Smoki is reflected in the improvement of the market position with the increase of the value market share. Also, excellent results were achieved by products suitable for making homemade desserts, such as cooking chocolate – Menage and Petit Beurre. Bars and Sticks in the last few months of 2020, also, recorded an increase in sales compared to the previous year. Essentially, the year behind us was the most difficult in markets that due to the pandemic had (or still have) very restrictive measures, as well as in markets that are highly dependent on the tourist season. Thus Serbia, Croatia, Bosnia and Herzegovina, Montenegro… while on the other hand, growth was achieved in the markets of Slovenia, Austria, Macedonia and the rest of the world, i.e., ROW. We are also looking forward to the commencement of the sale of Smoki on the Russian market, it is a huge market that offers great opportunities… We will continue to work on this this year too, as well as to return to the former turnover in the Kosovo market, with which we started working again in the middle of last year.

Throughout the preceding year, and in particular at the beginning thereof, you set aside large donations for faster and easier overcoming of the pandemic – tell us a little more about it and about the social responsibility of the Atlantic Grupa.

The Atlantic Grupa has always taken care of the community in which we live and work, equally in all markets of the region, where in each of them we operate as a socially responsible, home company. The crisis caused by the COVID-19 virus pandemic in the wider environment has not affected this to change, except in the manner to have us further intensify our efforts in helping both employees and the environment. We are actively involved in the joint combat against coronavirus and the company has set aside about 3.7 million euros for total assistance to local crisis staff and institutions that coordinate infection control and population protection activities. The largest part of the cited amount refers to donations intended for the procurement of medical equipment, especially respirators, and materials necessary for the efficient operation of health institutions in Slovenia, Croatia, Bosnia and Herzegovina, Serbia, Northern Macedonia and Montenegro, and one part includes donations of products to associations within the coordination of national staffs. By the way, we have strategically incorporated the obligations of socially responsible business and sustainable development into our business, and we strive to act in such a way that sustainable development is actually a process of creating new opportunities and development possibilities for our business, as well as better future for forthcoming generations. With the aim of improving environmental, social and economic goals, we recognize risks and opportunities for sustainability, and thus we act in several directions: in the field of new product development, technological processes, employee development, communication with customers, consumers, investor relations, supply chain management. …

We continue to strengthen our foundations by investing in our core brands, in innovation and consumer experience

Smoki, Bananica (banana cream chocolate bar), chocolate Najlepše želje (Best Wishes) are products that many generations are attached to – how difficult it is to be innovative and achieve new successes, particularly in the confectionery industry, in which there has been constant investment in recent years.

If I just mention the fact that behind Štark’s oldest brands is almost a hundred years of tradition, that we currently have about 100 million euros of annual turnover, that our range is in 6 product categories, that we have 8 MEX brands and only this year investing in a new, state-of-the-art chocolate line of 8.5 million euros, it is clear what respectable brands we are talking about, which of course was once recognized by Atlantic Grupa. Štark’s tradition and quality are an excellent basis that we will in the future, with new projects, intensively upgrade with attributes such as innovation, success, trust of new generations. It is certainly not easy, but we invest in technology and development, and create a dynamic environment that adapts quickly to market changes and consumer expectations, with a desire to be different, to be creative, to inspire innovation, and to open new perspectives for our brands. Štark’s core brands and the expansion of their portfolio is an obvious example that creativity leads to new perspectives, in particular when you innovate brands already well-known. We are developing new recipes and Limited-Edition items, based on the “inspired by” principle in response to consumer curiosity and the modern trend of synchronously combining different flavours, textures, types of products.

Prior to your position at Atlantic Grupa, you used to be the Regional President at Molson Coors Brewing. How much has your previous, many years of experience helped you better manage the sector you are in now?

I came from the brewing industry, which is basically a monoproduct industry, to a company that has a good, rich and diversified portfolio and in essence I was glad that after 15 years I decided to change my job, because it represented a big and new challenge for me. Empirically, you pass through a lot and bring it in a new company, but the ability to adapt is crucial for any business, especially in emerging circumstances, and it is important to understand the role your brands play in people’s lives. It is true that the original plans had to be adapted to the newly created situation, but in the past year we have initiated a lot of changes, some of them are already showing good results, and some are of much longer-term-character, so I am satisfied with what has been achieved.

What are your goals in general on your new position and plans for the forthcoming period?

Atlantic Grupa entered the current year with the announcement of strategic priorities for the next period of three to five years, which basically include strengthening the foundations of our business, further growth, but also improvements in all business segments, while maintaining the leading position of regional distributor of course. The essence is that we continue to strengthen our foundations by investing in our core brands, in production processes, in innovation and consumer experience, but also in human resources and corporate culture. To ensure sustainable growth and the expected contribution of brands that rely on a rich tradition, investments will be increased in their marketing needs and related system capacities. Success in these areas will also certainly contribute to the improvement of financial results. Within Štark’s brands, we continue to strengthen and improve our leading positions in chocolate and flips, we have prepared a series of innovations that will surprise consumers this year, we are also working intensively to improve the Biscuit and Waffle categories in a more innovative manner, and we are working too on expanding into new markets and generally improving our business processes. All of this is embraced by our new Operational Model that we introduced  at the end of last year and pursuant to which we are going to operate in future, in order to realize our Vision.

 

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