Dan Minulescu Interview: “This Year the Market Share Comes Before the Profitability”

Less than a year after the production start at the local frozen bakery plant through a joint venture with La Lorraine Belgian group, the company Macromex already has other investments plans: increasing the capacity of the new factory and the inauguration of a regional distribution center near Campia Turzii, in 2013.

Find out from Dan Minulescu, CEO and owner of Macromex, the development strategy for the concept of in-store bakeries in modern and traditional retail, the company’s forecast for the 2012 business and following investments.

Magazinul Progresiv: La Lorraine Romania factory became operational in October 2011. What marketing strategy do you have for the new line of business and what results were generated so far?

Dan Minulescu: La Lorraine Romania factory is one of the most advanced production facilities in Europe in this specific area. The technology and the experience in Research & Development of La Lorraine group, are making this operation unique in Romania and probably even in this part of Europe. This uniqueness translates into a product of constant superior quality. In less than one year after the start of the activity we have already achieved the IFS quality standard (International Food Standards), a standard with extremely strict requirements, exceeding the European legislation as well as the Romanian one.

The products made at Campia Turzii are already found in IKA stores (International Key Accounts), and in the Czech Republic and Slovakia. They surpass in quality, in many ways, our brand competitors, exports playing a major role in our strategy.

Despite the consumer goods market contraction in Romania, the advantages of bake-off concept are obvious to any retailer that wants to offer a different, superior experience for its consumers. The bake-off concept refers to leavened, prebaked and frozen products. After defrosting (in max. 20 minutes), it only takes 6-8 minutes of baking to obtain fresh, steaming products, with a golden crispy crust.

Regarding the results of the new line of business, I can say that we exceeded the objectives we have set and we are already considering the capacity expansion in 2013.

M.P.: What is the expertise La Lorraine frozen bakery brings on the Romanian market?

D.M.: La Lorraine Bakery Group is part of Vanherpe Food Group and it is a member of the Vanobake Bakery & Milling Group holding – the number one in Belgium bakery production. In the 80s, the Belgian company Vanobake was a pioneer in the frozen bakery segment, becoming one of the leading manufacturers in this segment. Currently, La Lorraine ranks 5th in Europe on the market, with factories for milling, bakery, sweets and confectionery, both in Western Europe (Belgium, Netherlands) and in Eastern Europe (Poland, Czech Republic, Slovakia and most recently, Romania) . The group is also a major player in retail bakery, on the concept store niche (Panos, Deli Way, and The Coffee Club).

M.P.: In retail, what do La Lorraine products bring new in this sector?

D.M.: The competence of La Lorraine, largely acquired by the local team as well, lays in the industrial-scale replication of specific manufacturing processes of a handcrafted product, almost home-made. Products that until 10 years ago could be made only in local bakeries, can now be manufactured to the same standard, on an industrial scale, making it accessible to a larger segment of consumers.

M.P.: What retail chains are currently supplied with La Lorraine products?

D.M.: La Lorraine products have a very good distribution in almost all the large networks: Kaufland, Billa, Penny, Lidl, Mega Image, Carrefour, Carrefour Express, Selgros, Profi and Cora.

M.P.: What is the traditional retail approach?

D.M.: Macromex aims not only at selling frozen products, but also at providing the retailer with the idea of ??developing a new business concept, able to grow significantly and in a very short amount of time the traffic inside the stores. Besides the business idea, the retailer benefits from our operational and technical support. We provide the retailer with the oven and the showcase needed to commercialize his products. Macromex has a team of specialists who offer free and permanent support in the preparation, baking and presentation of products to the final customer. It also provides assistance in the assortment management and sale, through materials made available by the marketing department.

M.P.: Do you have an estimate market share achieved by La Lorraine Romania in the frozen bakery segment, in the retail sector IKA? What consumer trends favor or may favor the development of the frozen bakery market in Romania?

D.M.: We created with two major clients – Billa and Kaufland – a partnership that aims to increase the bake-off segment by studying the consumer and R&D (Research & Development). Unfortunately, the quality of bread in Romania is below average. We believe the role of our partners and ours is to change this situation.

We believe in a consumer migration towards a better quality bread in the coming period and we see an important market growth for bake- off. This segment is not measured, even more since it is business-to-business.

M.P.: In Campia Turzii do you intend to invest in a Macromex regional distribution center? What are the stages of this project and how will it contribute to the development of Macromex in Romania and in Europe?

D.M.: In close proximity to La Lorraine Romania factory we plan to build a multi temperature distribution center. It will be the first controlled temperature warehouse in Romania, fully automated. It will serve our storage need, including the La Lorraine Romania bread factory, and also the zonal distribution and growth of our ice cream business (the nationwide distribution for Algida products division owned by Unilever) .We hope to have this warehouse fully operational in the second half of 2013.

M.P.: What were the business results Macromex registered in the first quarter of 2012 and what forecast can you communicate for the whole year?

D.M.: In an obvious way, the market in which we activate had an annual setback since 2009. We were also affected by this contraction. At the same time, we worked on several projects which now are paying off as we expected or even above our expectations: our bakery segment and the launching of our own brands: Edenia and Azuris.

At the same time, we work closely with our traditional partners, such as Dr. Oetker, Unilever, Lactalis, Nordex and others, in developing products and increase our market share. 2012 is the first year in which we have a significant increase in turnover.

We estimate a turnover of 420 million lei by the end of the year, a 10 % increase compared to 2011. For us, 2012 is a year with focus on the top line (revenue) in which the market share comes before of profitability.

Source: Magazinul Progresiv