Artoparto's Blog: HKScan

Showing posts with label HKScan. Show all posts

Friday, March 27, 2015

HKScan - hands full of chicken

In Sweden, HKScan is trying to achieve some market share for its fresh Danish chicken products. Apparently, there has been no great success yet. Competition is intense. Advertising agency’s page tells this:

“The challenge was to develop a packaging concept that was strong enough to compete with Kronfågel and Guldfågel (the leading chicken brands in Sweden).”

And there is a big problem (the origin of course), which the agency has to solve. This is their solution:

“We decided to position the brand on the basis of "great taste". This was possible because consumers primarily associate Kronfågel and Guldfågeln with just "Swedish" and this is also the focus of their packaging design.”

In Finland, while planning large investments on poultry production, HKScan has been trying to promote its new chicken nuggets by these short videos. Please watch the winner, the first on the list with 2071 votes. Without the foam extinguisher episode it would be fine, almost like from any Kaurismäki film. The product itself has been a success, the Annual Report 2014 tells.

In Estonia, demand for poultry products increases steadily and unlike in Sweden, HKScan has the advantage that it uses only domestic chicken meat. A huge additional advantage is of course the fact that all the rivals are reliant on imports.

We will look at HKScan again later but on Friday, April 10^th we are going to look at Atria’s businesses. The Radioactive Chicken Heads!

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

Disclaimer: All content provided on this site is for entertainment purposes only. This site does not provide any investment advice and content on this site should not be construed as recommendation to buy or sell any financial instruments. Please consult a qualified financial adviser before making any financial decision. I make no representations as to the accuracy, completeness, suitability, or validity, of any information on this site or found by following any link on this site. I will not be liable for any errors, omissions, or any losses, injuries, or damages arising from displaying or using any content provided on this site. I am not responsible for users' comments. I reserve the right to update or delete any content on this site for any reason.

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.

Friday, December 5, 2014

A few remarks about HKScan’s poultry business

But at first shortly about meat export. In a recent issue of Kauppapolitiikka, it’s Trade Policy, published by the ministry concerned, there is, under the title “Blue and white food tours” (in Finnish), an interesting article about HKScan and the main message is that reputation of cleanness and safeness boosts Finnish food export. As an example of Finnish quality, Hanny Kottonen, CEO HKscan, mentions that in Japan, Finnish pork is served raw in local sushi. This is something that even Sweden has failed to do, Kottonen notes. By-products, those parts of carcass, which do not sell in Finland, are perhaps another key to success. Still one key, mentioned by Kottonen, is that HKScan should also export - in addition to raw meat - also consumer products with strong brands. Now we can only hope that the new Flodins brand does the job. However, the article tells, export is not easy business, even close neighbors, like Russia and Norway, have proven to be challenging.

And now shortly about poultry. Of all Group’s units only HKScan Denmark, is unprofitable. For reason or another, this is now explicitly stated in a Danish newspaper. Chicken do not sell and prices are low. Group’s problem child is the term used. It just came into my mind that Rose Poultry could be for sale. After the fire, the factory has of course been renovated and it might interest possible buyers. The Group after all, has invested heavily on poultry in Estonia and plans to invest in Finland, as already noted on this blog earlier. One additional fact is that Denmark is more vulnerable to avian influenza. Perhaps the group does not even think of selling Rose Poultry but I think that there’s some idea to go through this case more closely in the near future.

Talking about chicken, the valuable Finnish brand ”Kariniemen”, is in fact not that valuable. On the Finnish list of most prestigious brands, it holds rank number 121 of all 1043 examined brands. Considering that “Kariniemen” is an old brand and its awareness is high, ranking outside top 100 is terribly bad.

Now Kariniemen is campaigning ethical farming. Ordinary people, picked by the company, were allowed to videotape freely in a henhouse and make questions freely, company’s Youtube Channel tells. Well, think about this: they were free to ask anything they wanted. Superb! Okay, I don’t think that this kind of theatre has any positive impact. Factory farming is factory farming and that’s it. Personally I would have liked to see chicken catcher in operation and I would have liked to ask about tetracycline use.

We will discuss HKScan later but on Friday, December 19^th, we are going to look at Atria’s businesses. Chicken rocks!

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

Friday, November 7, 2014

HKScan - growth-seeking but shrinking company

HKScan shrinks but the strategy for profitable growth is kept alive. Currently it means plans of investing in poultry product plant in Finland and some kind of a “Flodins factory” in Rakvere, Estonia. It is noteworthy, that the Group seems to be investing in poultry. In Estonia, a new poultry facility was just opened and of course, there is already a large unit in Denmark, which has not been very successful lately. It is true, that consumption of chicken meat is rising constantly but anyway plans to invest quite heavily in poultry in Finland makes me think if there will be overcapacity.

There are many so funny writings in the net including those of mine, especially the posting on this blog May, 23. At that time I was so excited to announce the fact that in autumn and thereafter HKScan Finland’s rapeseed products will be GMO free. I wrote for instance: “We’ll see, but GMO free product group might well be a game changer in Finland.” And perhaps or even likely HKScan would succeed in the competition and win it. That’s what I thought in May. Currently, I would be surprised, if HKScan wins any competition anywhere. Looks like the term ‘win’ is not included in the Group’s playbook.

Hannu Kottonen, CEO HKScan, has always found lot of reasons for bad results: expensive feed, private labels, low demand, aging population, recession, surplus of meat and also lack of meat, for instance. The latest Q3 report gives one reason more. Namely the company tells about decreasing retail sales volumes in Finland and this time one reason is that food wastage among consumers remained low. That’s straight out of Dilbert, the comic strip.

We will discuss HKScan later but on Friday, November 21^st, we are going to look at Atria’s businesses. But now, let’s look at some failures in Russia.

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