Artoparto's Blog: January 2015

Friday, January 30, 2015

HKScan Finland and UkkoPekka from Savonia

HKScan Finland and javelin thrower, the reigning European Champion Antti Ruuskanen, have signed a two-year partnership. The company's release points out that healthy food and protein intake will be significant themes. I personally assume that in addition to this kind of generic food advertising, one theme will be some HKScan's brand. Why couldn’t it be the case that the celebrated javelin star, the true archetype of Savonian, will promote Portti brand generally but first and foremost, sausage brand UkkoPekka.

Nothing exceptional in this agreement and somehow the first which comes to my mind is the long-term co-operation in the 90's between the meat company Pouttu and World Rally Champion Juha Kankkunen. In the net one can find an article where Risto Pouttu, company’s CEO at that time, praises Kankkunen’s importance in improving the awareness of the company’s products. I think that in a way, Kankkunen during his sports career and Ruuskanen today, are similarly folksy and liked by the whole nation.

Hence, it is possible that in the near future we will have to suffer from Ruuskanen’s Savonian dialect not only in sports programs but also in advertisements. On Portti’s pages, a link below, there already are a some other Savonian tuned radio advertisements. Perhaps you liked to start listening to them? I am happy to remind you that the stop button is included as well.

But what about the Portti brand? Nothing much. Apparently, the Mikkeli plant makes mostly HKScan brand products and under the Portti brand there are just a few products. However, UkkoPekka seems to be going strong with its five different sausage products. Actually, I would say, UkkoPekka earns a major advertising campaign.

A completely different type of HKScan Finland's sales promotion is its participation in the Food Camp Finland event in Gösta (Serlachius) Museum in Mänttä in late August. Top art, top chefs, top dinner, top prices. However, looking at the pictures from last year, one might conclude that HKScan's role seems to have been something like serving barbecue food from a trailer. Hopefully this was not the case.

We will discuss HKScan later but on Friday, February 13^th, we are going to look at Atria’s businesses. Nordic Champion Carbon 800g.

This is Artoparto and here is my Disclaimer. Please read it.

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Friday, January 16, 2015

Atria’s shrinking markets in Scandinavia

Atria’s Capital Markets Day has been held in 3^rd December 2014 and presentations are available on the Group’s pages. Let’s look just Finnish and Scandinavian market updates.

According to Mika Ala-Fossi, head Atria Finland, Finnish retail market in Atria’s categories has shrunk 3.4% in value and 2.0% in volume. In food service sector the corresponding shrinkage in value is even 4.4%.

In Sweden, the situation is not much better. According to Tomas Back, head Atria Scandinavia, Swedish cold cuts market has shrunk 2.1% in value and 3.8% in volume. Back also tells that in this product group Atria’s branded value share is 11.5% and Atria’s total value share, private label included, is 12.7%, both decreasing slightly. If I get it right, these share figures tell, that Atria is not a big player in cold cut private label market but instead the company is highly dependent on its own brands. On the contrary, it can be noted that in sausages the readings are 10.4% and 15.5% indicating that Atria has a strong presence in Swedish private label sausages.

Seriousness of the situation in Sweden is revealed, when Back notices that private label growth in cold cuts has been 15.8%. That’s truly enormous growth, I think. It does not help much that, according to Back, Lönneberga products are keeping their position versus other branded products. I personally think that this means just that all brands wither.

Denmark does not bring relief. According to Back’s presentation cold cut market declined 4.0% in value and 3.7% in volume. Atria’s 3-Stjernet brand was able to raise its market share but at the same time, Back tells, hard discounters are increasing their share on the market.

We will look at Atria again later but on Friday, January 30^th we are going to look at HKScan’s businesses. Only Estonian punk can save us - and not always even that.

This is Artoparto and here is my Disclaimer. Please read it.

Friday, January 2, 2015

HKScan and a Danish giant

HKScan announced in December the sale of their egg business in Estonia and also becoming a minority shareholder in their Finnish hatcheries. Of course those were separate deals de jure but it was unpleasant to see that HKScan left without telling the simple fact that both contracting partners are part of the same group. Such secrecy gives an impression of dishonesty.

DAVA Foods Holding A/S ja Danish DanHatch AS both belong to Danish Agro corporation, with holdings in Finland already before this, among others 50% share of Muna Foods, formerly known as Munakunta, and 60% share of Hankkija Oy and the rest of Hankkija will likely be sold to Danes in no time.

HKScan Estonia’s egg business sale should have been guessed already a year ago, when the Group announced that Tallegg’s egg production will be separated from poultry meat production. Teet Soorm, head of HKScan Estonia, almost revealed it by first saying strongly that Tallegg’s focus is on poultry and then adding that egg production is still important business for the company. I would imagine that the negotiations were already advanced at that time.

Hannu Kottonen, CEO HKScan comments the two December sales: “These deals are further steps in our efforts to rationalize our operations, focus on our core business, improve our productivity and further simplify and clarify the Group structure. The changes allow us to further strengthen our position as the leading Nordic meat company.”

Yes, yes, Kottonen talks about core business. Core today, niche tomorrow, HKScan is shrinking fast. But what might be Danish Agro’s core business? Apparently they focus on … that’s right, they focus on agriculture. They are not shrinking, but in Finland, is it this, what is left of truly Finnish agriculture?

We will discuss HKScan later but on Friday, January 16^th, we are going to look at Atria’s businesses. Harvest Samba!

This is Artoparto and here is my Disclaimer. Please read it.