Heidi Chocolate is looking forward to the next growth phase of its history, as the brand begins to strengthen its relationships with new and existing retailers across the globe.
The company was originally set up as a non profit in 1994 by Swiss chocolatier and entrepreneur Jurg Läderach, whose family founded Confiseur Läderach, the famous producer of premium chocolate and confiserie products in Switzerland. Now the Heidi Chocolate brand is coming of age on its 21st anniversary since operations began, having a presence in nearly 50 countries across the world from Canada to China, with the bulk of business coming from within Europe.
Testament to the success of the organisation is the fact Läderach decided to sell the business in 2013 as he had decided his mission for Heidi had been accomplished. The firm was bought out and is now owned by parent company KEX Confectionary, also owner of the Kandia and Niemetz Schwedenbomben brands.
Franco Del Fabbro, Managing Director of Heidi Chocolate, said: “It has taken a lot of hard work over the years, where Heidi started out modestly with some old equipment from Switzerland. But today we have a turnover of approximately €18 million, 420 staff, and sales in nearly 50 countries with half of that turnover now coming from outside of Romania. It is significant progress and an achievement to be proud of.
“We continue to be an end-to-end business, where we purchase ingredients, manufacture and sell directly. We have a salesforce that calls on the key customers and we distribute from our own warehouses to them inside Romania. For some countries we have exclusive deals with specific customers, so we deliver and manage the relationship directly through an export group team. Other countries we have an appointed exclusive distributor who deals with the local retail chain.
“We are number two in the Romanian chocolate bar segment after Milka, which is a good position. However, you can only grow single digits a year depending on category and market condition. With exports, even though we are at a relatively early stage in our presence, we are experiencing growth in of 10-20 percent. So that is the driver of our overall growth and naturally impacts our strategy.”
Position and strategy
Not satisfied with resting on its laurels, Heidi Chocolate foresees double digit growth in the next five years.
“We are not talking about 10.1 percent either.” del Fabbro said: “That growth is going to be achieved through holding and growing our position in Romania and most importantly establishing ourselves as a clearly recognised international brand. The focus of the past few years was conquering new countries, now our focus is to solidify that presence to get a better foothold in order to thrive.
“Overall business is solid, go to any big retail chain in Hungary or Poland and you will see our products properly displayed on shelf. Other countries we have just entered, for example in the UK we started doing business with Asda at Christmas.
“The cost of cocoa has sky-rocketed and with the British pound getting stronger, it compounds the problem and remains one of our challenges. We source cocoa from the Altimarka’s and Barry Callebaut’s of this world as we are still too small to have a direct link with the actual bean production, but we are looking to implement a more direct supply chain from Africa in the future.”
Heidi recognises that international expansion requires a more world-focused mind-set, but relationships such as the ones it has with Turkish hazelnut farmers and Moldovan Walnut producers has already been in place for many years.
Investment in future
The future development of the company is clearly more towards the. Central to this is the intention to retain a high percentage of hand craftsmanship for its chocolate product. Bespoke hollow figurines and personalised chocolate bars are tailored for retailers and consumers, and Del Fabbro claims this is something their mass producing, multinational competitors have more trouble to achieve, if nothing because of the relatively small scale of each order.
But expansion has necessitated cutting edge technology too. Del Fabbro said: “I was tasked by the board with creating a 2020 vision for the company, outlining where we want to go in the next five years and what we need in order to get there. Part of our strategic plan was a big boost in technology and machinery investment.
“Our capital expenditure this year is equal to that over the past 3yrs. The single biggest investment has been the conching equipment, to further improve how the chocolate is made. The second was increasing capacity on specific product lines and the third was to upgrade certain areas and equipment facilities, in order to obtain IFS certification by the middle of 2016.
Of course, in production especially there is constant training and there will be a need for that as Heidi receives newer technology. Many employees have served more than 10 years, and retention is high. Alongside this, the company recently finalised the creation of the Heidi foundation which serves to help employees in need and offers a helping hand to worthy community projects.
Looking forward, Del Fabbro believes the last challenge he faces every day is selecting what projects to pursue. “Enforcing some basic discipline is essential; we need to say for 2016 these are the 10 things we will be able to deliver and will make the difference, let’s not get distracted by appealing side projects or we may diverge from our strategic journey.”
It is a nice situation to have, and Heidi Chocolate looks primed for more success in the years to come as they continue to grow internationally.