Artoparto's Blog

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.

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Friday, March 13, 2015

Reading the magazine @trialla Feb 2015 - News from Atria

The magazine's most interesting news is a relatively extensive article of a large retailer Tuurin Kyläkauppa. Their food department does not go particularly well. Firstly, convenience food sales have simply fallen. Secondly, the more expensive parts of the carcass demand has decreased and on the other hand, the demand for cheapest parts of carcasses and minced meat has increased. Thirdly, discounted products are selling well. In all, one must conclude, consumers are saving and living sparingly.

Trade volumes in Tuurin Kyläkauppa are large and consumers’ cutting down is also reflected in the individual product groups, so that for instance in sausages they have moved increasingly to cheaper products. Interestingly, top offer ready meals sell very well. It may mean that the increasingly strong trend of preparing food at home also on weekdays, is only due to consumers' need to save.

A few customer interviews at the end of the article reveal, what the customers are seeking for: products close to the sell-by date, only offerings and nothing else, and low-cost raw materials for cooking at home.

There’s one more interesting piece of news in the magazine. With the chicken business bought from Saarioinen, Atria Finland got a precious brand of Jyväbroiler. Surely it will be developed further. A couple of photos prove that something has changed. Previously, at least some of the products were GMO-free. Not today. In the near future, GMO-free product range may well be an important success factor but unfortunately it seems that Atria Finland is out.

We will look at Atria again later but on Friday, March 27^th we are going to look at HKScan’s businesses. Eat well!

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

Friday, February 27, 2015

HKScan's small associate Siljans Chark on the move

Siljans Chark, a relatively small HKScan's associated Swedish company, ownership approximately 40%, net sales of just below €20 million, is now in the headlines. Its new managing director is a man straight from HKScan, Thomas Perkiö. He says in an interview that in addition to production efficiency, focus will be on brand development.

As discussed also on this blog, a few years ago HKScan was going to increase its stake in the company but the locals put up a resistance. It will be interesting to see where HKScan now aims to. It's no coincidence that in January, HKScan sold Bertil Erikssons Slakteri slaughterhouse precisely to Siljans Chark.

We’ll see what happens next. Siljans Chark’s products are aimed at somewhat more affluent than average consumers and local origin is emphasized. Cool packages, light mood, Black Pudding here’s as an example.

Right now the most visibility is brought by ongoing Nordic Skiing World Championships, held in the company's home region in Falun. Siljans Chark is one of the official suppliers, which is of course a great opportunity to enhance brand awareness.

We will discuss HKScan later but on Friday, March 13^th, we are going to look at Atria’s businesses. Skiing 101.

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

Friday, February 13, 2015

Atria Finland’s Q4 EBIT €15.6 million

Unbelievable result it is. Not much more to say. Financial statement tells the reason:

The increase in comparable EBIT was due to improved cost management and higher average sales prices year-on-year.

Higher average sales prices might be quarter dependent, Christmas sales are quite special, but one would think that better cost management is not going anywhere, which means that performance improvements will continue in the future.

Should one now expect that good results will follow from quarter to quarter? Maybe, maybe not.

Report’s Outlook for the whole Group’s future tells this:

In 2014, consolidated EBIT without non-recurring items was EUR 39.6 million. In 2015, EBIT is projected to be at the same level and net sales are expected to decrease.

It is an utterly disturbing statement specifically with regard to operating profit. It means that cost management improvement in Atria Finland has not been significant or some foreign business areas will continue to decline.

Rather contradictory feelings, to say the least, so let’s have some sausage ice cream. Warning: Very Swedish.

We will look at Atria again later but on Friday, February 27^th we are going to look at HKScan’s businesses. No sausage here. All warnings.

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