EuropEan

Feature

Atlantic Grupa

AtlAntic GrupA

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Atlantic Grupa founder Emil Tedeschi and

director of corporate

communications Gabrijela

Kasapović speak to European

Outlook.

By Ian Armitage

SuperGRUPA

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AtlAntic GrupA

In a 2010 article the Financial Times described Croatian consumer goods giant Atlantic Grupa as “the standard-bearer for economic reintegration in the fragmented lands of the former Yugoslavia.”

The claim followed its takeover of Droga Kolinska, a Slovenian group that came with blue-chip brands in Serbia.

Today, Atlantic Grupa’s position as “standard-bearer” is something the business community wholly agrees with.

“Our story is an interesting one,” director of corporate communications Gabrijela Kasapović tells European Outlook. Indeed it is.

Emil Tedeschi, president and CEO, founded Atlantic Grupa, which started distributing Wrigley’s chewing gum while the war for independence still raged, in 1991.

It is now the leading European producer of sports food with the well-known Multipower brand.

Products include Multipower bars, shakes and supplements and Cedevita “almost-ready-to-drink” sports beverages.

It has spent much time since the Droga Kolinska acquisition integrating the new business into its portfolio, becoming a giant.

“In 2012 Atlantic Grupa introduced a new organisational structure in order to manage all of its business units and distribution markets as efficiently as possible, which means abandoning the former division-based organisation model, and introducing the organisational segmentation into six Strategic business units - Coffee, Sports and Functional Food, Pharma

“Atlantic started off in 1991 with the distribution of Wrigley chewing gums, as a small company of seven employees”

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and Personal Care, Savoury Spreads, Snacks, Beverages - along with four Strategic distribution units - Croatia, Slovenia-Serbia-Macedonia, HoReCa, International markets - and the Market unit Russian as a separate entity,” Kasapović says. “The tasks within the new organisation are linked according to the affi liated product type or sales area.”

The biggest individual product category of Atlantic Grupa, with a 21 percent share, is Coff ee and brands include Grand kafa and Barcaff e, she says. “The beverages category, with key brands like Cedevita, Cockta, Donat Mg, and the Sports and Functional Food category, with brands such as Multipower and Champ, have shares of 14 percent respectively. The category Sweet and Salty Snacks boasts a 12 percent share in total sales, Pharma and Personal

“We are working on three platforms – local/national, regional and international. Some of our brands are very strong in local terms”

AtlAntic GrupA

Care has 10 percent, and Savoury Spreads a nine percent share. Distribution of principal brands accounts for 17 percent of total sales.”

Atlantic Grupa went public in 2007 with the region’s largest initial public offering for a purely private-sector company, as opposed to a privatisation sale. Around 26,000 individuals and 150 institutions, including Croatia’s main pension funds, bought shares. The company has delivered growth for six years straight.

“Atlantic started off in 1991 with the distribution of Wrigley chewing gums, as a small company of seven employees,” says Kasapović. “Emil Tedeschi was at the time 24, and by then had gathered respectable managerial experience. He started his working career in the UK and Italy where he served as Director of the Milan Branch of Meteor Holding Ltd, one of the biggest European paper trading companies at the time. He returned to Croatia in 1991 to open and manage the company’s Croatian subsidiary but he soon found Meteor Holding shutdown by its creditors, and himself out of a job, in a country just starting a military defence against aggression. With his colleagues he founded Atlantic Trade and accepted the offer to distribute Wrigley assortment in the Croatian market. To many people at the time, distributing gums in a country at a war, where flour, oil, and other basic commodities were lucrative, sounded ludicrous. Little did they know that this would kick off an extensive distribution business and this company would, in 20 years, be one of the leading players not only in the FMCG distribution but also in the food industry in the whole region.”

Over the years Atlantic has made a number of clever and strategic acquisitions, chief among them the purchases of Cedevita (2001), Neva (2004), Haleko (2005), Multivita (2007), Dietpharm (2007) and finally Droga Kolinska (2010).

“We acquired Slovenian-Serbian food giant Droga Kolinska in a bid to strengthen our position in SE Europe,” says Kasapović. “Droga Kolinska was the perfect match for Atlantic Grupa. Atlantic was selected as the best bidder, not only price-wise, but equally

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PACKAGING TECHNOLOGY INNOVATION

EUROPEAN NUSINESS OUTLOOK_trac.i1 1 09/03/2012 11.21.33

PACKAGING TECHNOLOGY INNOVATION

EUROPEAN NUSINESS OUTLOOK_trac.i1 1 09/03/2012 11.21.33

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important, strategically. The deal was closed on the 1 July 2010 and is the largest acquisition the region has seen so far.”

The match was “perfect for both companies” she says. Droga Kolinska, which came with two strong coff ee brands (Barcaff e and Grand Kafa), gained a strategic partner keen to further develop its brands and market positions, while Atlantic Grupa signifi cantly strengthened its position.

Today, Atlantic is a business with a turnover of around 650 million euros, a huge distribution and manufacturing network, 4300 employees, and a presence in 11 countries with own companies.

“Droga Kolinska and Atlantic Grupa have highly

complementary portfolios, in the sense of similar regional coverage with barely any overlap of products,” Mr Tedeschi said at the time of the takeover.

Kasapović agrees that Atlantic Grupa is now a more formidable proposition: “We are today a strong producer and a strong distributor in all of the regional markets. Our product portfolio is in a higher range of profi tability for the retailers and on a strong demand with consumers, which gives us easier entry and a good position with our partners. The complexity of business requires more eff ort to manage, and we deal very well with our complexity. On the other hand, size does add up on the strength scale in negotiations.”

“Entering new markets is a continuous effort, it is easier to introduce new products into a market where we already have some activities”

?????????

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Goglio, a leading multinational company with headquarters in Italy, production plants and commercial offices in Europe, Americas and Asia, is specialized in the production of complete flexible packaging systems. Since the start of its activity the Group, founded in 1850 near Milan (Italy), owes its success to the ability to anticipate market needs through innovative solutions capable of satisfying the ever-evolving demands of its clients.

Multilayer high barrier laminates, equipment and plastic components make up what is known as Fres-co System®, the trademark that identifies Goglio’s offer together with innovation, service and quality, conceived to meet the needs of different products such as coffee, foodstuffs, pet food, detergents and industrial chemicals - a wide range of package sizes and formats, from a few millimeters to 1500 liters.

The flexible container is an effective and practical promotional vehicle: particular shapes and sizes, the absence of sharp edges make every package unique, precious and recognizable, all the finishing options that can be applied contribute to improve daily aspects and use: fast and precise easy-opening systems, handles for a helpful and simple transportation, spouts for pouring the content and reclosing systems (adhesive tape and tin-tie) for product preservation even after opening.

Flexible packaging preserves product characteristics thanks to the technical properties of the laminates it is made up of, whilst enhancing brand image through sophisticated printing effects. Constant Research and Development together with studies on shelf-life products lead to the development of a wide range of successful solutions in which every aspect represents an advantage: reduction of weight, volume and waste, lower warehouse and shipping costs. Goglio moreover dedicates significant resources and energy to innovation in full respect of the environment, successfully developing eco-compatible and biodegradable laminates.

The “green” soul of the Group, however, is still most evident in the attention which Goglio dedicates to the reduction of environmental impact of its plants: in all of its printing and laminating processes inks and adhesives are formulated with a single solvent, recovered and recycled on-site thanks to a sophisticated plant. These same principles are also adopted in the Group’s other production plants: the far-sighted strategies of the owners and the rigor adopted for a greater eco-compatibility of the manufacturing process have made Goglio a pioneer in the implementation of the “Best Available Technologies”.

For these and for other reasons, in its 160 years of history the Group has gained and consolidated its position as world leader in flexible packaging systems.

GoglioA flexible choice for unique solutions

Goglio S.p.A.Via dell’Industria, 7, 21020 Daverio (VA)Tel. +39 0332-940111 Fax. +39 0332-940201www.goglio.it

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AtlAntic GrupA

So then, it’s true - Atlantic Grupa is the standard-bearer for economic reintegration in the fragmented lands of the former Yugoslavia. “You could say that. Several media used the example to show how economy helps connect the countries of the former Yugoslavia and reintegrate the region without any political connotations. We are a strong regional company with a balanced business in all of the countries of ex-Yugoslavia, relative to the size and development stage of the country or market. In each of these countries we are a local company that produces locally, pays local taxes, employs local people, and helps the local community. We are, on the other hand, treating the region as a whole as our home market. Our brands have regional recognition and are well known in all regional markets to the extent that some of them are a synonym for the category. They are well known for their tradition and quality, and are a consumers’ fi rst choice. These are countries where people speak very similar languages, which makes it

“Today, Atlantic is a business with a turnover of around 650 million euros, a huge distribution and manufacturing network, 4300 employees, and a presence in 11 countries with own companies”

“Atlantic Grupa has been built on solid foundations, on which a healthy development can take roots. In a matter of speaking, Atlantic Grupa was going to develop precisely like it did - it was the idea from the beginning”

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easy to communicate, they have similar habits and requirements and it is only logical that cooperation in economy should be intense. Our example shows exactly this. Many of our in-house experts and managers have been shifted between Serbia, Croatia, Slovenia, and even Germany.”

Atlantic Grupa’s aggressive expansion has made it an investor’s dream. “Entering new markets is a continuous effort,” says Kasapović. “It is easier to introduce new products into a market where we already have some activities. For instance, our product line of baby food, Bebi, is made in Slovenia and marketed exclusively in Russia and Ukraine, so it was easier to successfully introduce another product, Donat Mg, which as a functional water naturally rich with magnesium has excellent results in these markets in the pharmacy sales channel. Brands produced in Serbia, which were for a long period not present in the Croatian market, such as, say Smoki flips, are easier to introduce back into the market because the consumer is familiar with it,

“Even though we expect 2012 to be at the least equally challenging from the macroeconomic aspect, we are confident in further top-line and profitability growth” Emil Tedeschi, president and CEO

A. Hatzopoulos S.A. specializes in fl exible packaging converting. Founded in 1931, today we are one of the fastest growing packaging converters in the European market. Continuously investing in innovative and advanced technological, environmental and quality systems, we offer sustainable, high quality and competitive packaging solutions.

With regard to our partner, Atlantic Group, we support them in the fi eld of beverages and snack packaging, easy peel and X-laser cut packaging solutions.

Exporting in 25 countries, the annual growth of Hatzopoulos is steadily higher than this of the packaging market, which is refl ected in the effi ciency improvement of our clients throughout the entire supply chain.

Hatzopoulos S.A.

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AtlAntic GrupA

and hence it takes less investments than introducing a completely new product. Completely new entries take serious research and return on investment assessments.”

The Group’s brand portfolio includes strong local, regional and, increasingly, pan- European brands.

“We are working on three platforms – local/national, regional and international. Some of our brands are very strong in local terms. Take Plidenta, for example. This is the leading toothpaste in Croatia, before all local and international competition. We will continue to develop this brand and defend our position, but there is hardly potential for it to go further. There are genuine regional brands, such as Cedevita or Smoki. These are a synonym for the category of vitamin drink and flips in the whole region, have very high recognition and consumer loyalty. Finally, brands like Multipower, or Argeta spread or Donat Mg, have a large international presence and potential, and this will continue to be our focus in their development. Essentially, it is a principle on which most successful international corporations base their business.”

Tedeschi has said in the past that Atlantic Grupa could structure a serious entry into the U.S. market. Kasapović agrees, but it is a way off.

“This is not something we will

exclude, but we are for the time being focused to the region and Europe. We are an ambitious company, but realistic as well and reasonable in our strategy planning. It would be great to be able to open as many new markets as possible, but as versatile

as we are in our business model we must maintain focus and evolve gradually in order to be able to grow continuously in the

long run.”Atlantic Grupa continues

to outperform its rivals despite a tough trading environment. The management and the company’s employees have successfully executed the first phase and entered strongly the second phase of Droga Kolinska’s integration. Sales and operating profitability are also up.

“Even though we expect 2012 to be at the

least equally challenging from the macroeconomic aspect, we are confident in further top-line and profitability growth and thereby to achieve this goal we put focus on realisation of synergy potentials, organic growth through active brand management and innovations, costs optimisation, active risk management and further fulfilment of financial obligations,” says Tedeschi.

The firm is well poised, Kasapović says. “Atlantic Grupa has been built on solid foundations, on which a healthy development can take roots. In a matter of

speaking, Atlantic Grupa was going to

With innovative creation, production, and marketing of aromas and food ingredients we guarantee our business partners the highest added value to their products. With our help, sensory characteristics of our partners’ products are well recognised and of our partners’ products are well recognised and appreciated by customers.

Partner chosen by taste

ETOL d.d., Škofja vas 39, POB 426,

SI-3211 Škofja vas, SLOVENIA ,

Tel.: +386 (0)3 42 77 100

Fax.: +386 (0)3 42 77 118

info@etol.com www.etol.si

develop precisely like it did - it was the idea from the beginning, but it had to take time and it required patience to build the business with smaller chunks and larger, gradually, wisely, and successfully. Sure, we must have made some wrong moves along the way, but the important thing is that we made far more right moves. We think things through, but remain quick to react. We develop more systematic solutions as we grow, but maintain our flexibility. We build a company so that it doesn’t depend on just one element – one product, one customer, one sales channel, or one man. We diversify and seize opportunities, but stay focused on the other hand. It is a balance we continuously try to keep. There is no universal formula to succeed and prosper, sometimes you need a splash of luck, but in our case this complex formula is working and we try to improve it every day.”

To learn more about Atlantic Grupa visit www.atlanticgrupa.com.

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ENQUIR IESTelephone: +44 (0) 1603 343367Fax: +44 (0) 1603 283602andy.ellis@tntmultimedia.com

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ATLANTIC GRUPA D.D.Miramarska 23,10000 ZagrebCroatia

Tel: +385 1 2413 900Fax: +385 1 2413 901Email: grupa@atlanticgrupa.com

www.atlantic.hr