A new year - new plans. What are your plans for the coming months?
2011 was a good year for the company. We introduced new products that have been positively received in the international market. We have implemented many improvements, especially in the field of customer service. This means that we are optimistic about the coming year. We will consistently optimize our offer, taking into account the specificities of each country. In the first two quarters there are important trade fairs such as the ISM in Cologne, Germany, Prod-Expo in Moscow, Russia, PLMA in Amsterdam, Holland. Millano will actively participate in all of these events. It's a good opportunity to meet with our existing customers and make new contacts. We also use this opportunity to observe the industry and upcoming trends. Each time we present something new and this year for sure this will not change. We will even accelerate our innovations.
You mentioned that last year was good for your company – could you tell our readers something more about it?
It was a good year, although simultaneously a tough one. We tried to protect our customers from soaring commodity prices. At the same time we introduced many new products on an international scale. It was a challenge in terms of not only commercial but also logistic issues. We closed the year 2011 with increasing sales and I can say that our goal was achieved. For me, the fact that after a hard year the organization shows great enthusiasm and commitment is not of less importance.
Let's go a little further into the past – the beginning of the company is the eighties in the last century...
Yes, the Millano company exists in the market for more than a quarter of a century. It's a family business, which from the beginning has been producing chocolate. The company was founded by Krzysztof Kotas, who all the time remains the person managing the whole organization. I am sure that his words would best describe the beginnings of Millano. I can say that it is a fascinating story.
How did the company develop? The groundbreaking moments are...
Millano is a company in which lots of things happen, so there are important moments every day. Many of them took place at a time when I did not know that I would work in a chocolate factory. And so, in 1992 the production hall for forming chocolate bars opens on Wysogotowska Street in Przezmierowo, Poland as well as an office space with rest and refreshment facilities. 1996 was an important year because of the start-up of the chocolate mass and chocolate coating production line based on German technology, which is one of the most modern in the country. This numerically controlled system can produce 100 tons of mass per day. Not much later, as it was late 1996 and early 1997 a new production plant on Graniczna Street started working, which was prepared for the production of filled and packaged confectionery products. Subsequent years - and more specifically the year 1999 – are the beginning of our own brands in Poland. Millano from the outset marks its strong position in this segment. 2000 was a breakthrough year due to the purchase of the company Pomorzanka in Slupsk. Since Millano became its co-owner, it has been expanding its offer with a wide range of products: hard candies, jelly products and chocolate-covered products. A year later, a modern logistics - distribution centre Millano Distribution [Millano Dystrybucja] was created. In 2003, being managed in a modern way – with regard to the safety of our products – we started the implementation of the HACPP system and in 2004 we obtained the Certificate. 2006 was another groundbreaking year because one of the most modern manufacturing facilities in the confectionery industry was commissioned that meets the highest international standards in production and work safety. At the same time the machine fleet was extended with production lines and packaging machines of the latest generation, which directly affects a substantial increase in the production capacity. Polish presence in the EU and the production capacity of the plant caused a surge in export sales and the number of new markets not only in Europe but around the world. Having been granted the trust of customers, we have become one of the largest suppliers of private-label signed goods for retail chains such as Auchan, Tesco, Biedronka, Lidl, Intermarche, Geant, Plus Discount, Leader Price, Kaufland and Netto. In 2009, once again, we focused on new technologies, expanding the machine fleet with the latest generation of packaging machines for packaged confectionery products. It was also an important year because of the decisions about the development of sales in North America. The consequence of these decisions was opening the Millano company representative office in Chicago, USA in 2010. In 2011 we opened the first warehouse there. The year now is 2012 and I hope that we will work on adding other important events to the list above.
Please tell our readers about Millano today.
Millano is a modern company with international coverage. We are certified with ISO, BRC, HACCP, confirming the highest standards of production and management. But today’s Milllano also continues the process of improvement regardless of the department or the level of the organization. From the commercial point of view I can say that we do not stop working on increasing the level of customer service. We try to be flexible and know that what is important is quick decision-making. Therefore, in Millano we are working on communication not only outside the company, but we also want to achieve harmonious cooperation of the sales, marketing, laboratory, manufacturing, supplies and logistics teams. Without the commitment and enthusiasm of all these people we could not be present in fifty countries around the world. To develop in the international market, we must be receptive to tastes, habits, innovations. We must be open to other cultures. And this seems to me to be the most important thing in our company today. The fact that we start our conversation with the client by listening to what they need.
Export is an important branch of activity for you - what products are exported? Which countries are the main partners?
Sales to foreign markets is still a big challenge. I am fortunate to work with professionals who take on this challenge every day. Millano is able to offer a wide range of products and very often this is why foreign customers decide to cooperate with us. To foreign markets we sell both traditional chocolate products, which are well-known to Polish consumers, as well as less common solutions, such as chocolates filled with peanut butter and jam. The 100 g chocolate bars in different flavours remain dominant all the time. Our boxes of chocolates, which weigh between 100 g and 300 g, are still very popular. An important role is played by the ones that are well-designed and made of high quality packaging materials. Most often they need to be adapted to the requirements of a particular country. Taking part in many trade fairs, we are constantly observing emerging trends and try to follow them. Therefore, we are constantly expanding our product range. Speaking about the foreign markets most important for us, I point out the European Union as a whole with emphasis on the rapidly developing countries of CEE. I feel that the situation on the Russian market is improving, which instils some optimism in us. Undoubtedly, the North American market is important for us.
On which other markets do you plan to emerge?
Asia is very interesting. There is no shortage of potential chocolate lovers there. The Middle East is a region where there is no need to convince anyone to sweets, but it is difficult to gain the trust of the demanding customers. Besides, it turns out that a fairly short season seems to be a problem too. China is a country that you cannot lose sight of, but the chocolate market is comparatively less developed and starting to sell involves large investments. Countries such as Malaysia, Indonesia are another 300 million people. There, in turn, the local competition is strong. On the other hand, there are two-hundred-million people in Brazil, which is the world's fifth chocolate consumer. Unfortunately, only 8% of chocolate sold there is imported. Looking at the map of the world you can see that there are lots of directions for development, and the crisis in tiny Europe should not deter anyone from chocolate.
Are you afraid of the second wave of the crisis? Should the sweets industry be afraid of the crisis?
We focus on rational planning and we want it to be an antidote at this time. Our strategy is not defensive, and therefore we take a series of actions aimed at strengthening the position of our company not only on the domestic market. We strive for good communication with our customers in order to adequately respond quickly to their needs. Contrary to the image presented in the media, the situation does not seem to be so bad. Even more so in the confectionery market, which seems to be resistant to negative moods. Research shows that consumers do not like to save on chocolate. They treat sweets as a luxury, which they do not give up, as a way to improve mood. Besides, Poland comes out pretty well compared to other countries in our region. The consumption of chocolate in our country is still about 50% of what our Western neighbours consume. This shows the potential. Undoubtedly, this is a favourable time for the development of private labels. Millano is a company that provides private-label products to many international retail chains. We gain their confidence by the fact that we actively participate in every stage of the product management in this segment. To sum up: we do not underestimate the negative signals coming to us, we do not however let that paralyse the implementation of our assumptions.
And what is the situation on the international market?
Last year the global chocolate market reached 100 billion dollars. There are more and more chocolate lovers and it probably should not surprise anyone. After all, chocolate makes us happy. Over the last five years, chocolate consumption increased by 30% and this is mainly due to the emerging markets, and that's where interesting things happen. These are also markets that require a sense and knowledge of the habits and behaviours of customers. Many of them are only learning to enjoy chocolate, and due to this first impressions can have a big impact on the continuation of this adventure. Finally, there are countries where chocolate consumption is at the level of 7-10 kg per person, per year and the pace of change here is not as big. Despite high consumption per capita, tastes are rather conservative. Customers expect natural ingredients, certified supply chains, and convenient forms of serving chocolate more than innovation. I am not afraid of the amount of chocolate that we will be able to eat. These numbers continue to grow. Possibilities of the cocoa producers may be the larger problem. Côte d'Ivoire reduced the amount this season by 18%. Neighbouring Ghana, which is the No. 2 producer, will shrink the harvest by 14%. Reaching further - it is the situation on the commodity markets in future years that will be the crucial issue for the industry. Another important component, which is sugar, has given us a lot of emotions this year.
Thank you for the interview.
Maja Swiecka
