In 2013, Karl Fazer Milk Chocolate was selected for the fifth time as Finland’s top-rated brand while Fazer ranked second. Several other Fazer brands placed in the top 100 of the 1,043 brands surveyed*, demonstrating their close relationship with the Finnish consumer. In an annual study on trust and reputation conducted during the year, Fazer Group ranked fourth among Finnish companies.**
In addition to maintaining a strong market position and reputation in Finland, Fazer plays a key role in Finnish industry as a whole. Over the course of the year, the Group invested heavily into its confectionery production facilities in Vantaa, where a new powder moulding line was installed. The total cost estimate of the line is 14.7 million euros, of which 13.7 had been spent by the end of year 2013. Other investments were made in the confectionery factory in Lappeenranta and in several bakeries. By opening a new oat mill in Lahti in 2013 the Group expanded the activities of Fazer Mill & Mixes, a business that supplies grain products to Fazer’s production units and international and domestic customers. Adding to the existing offering of rye and wheat, the new mill enables Fazer to respond to increasing oat consumption in Western countries.
“These investments are proof of our belief in the Finnish market,” says Christoph Vitzthum, President and CEO of the Fazer Group. “We are confident in our strong relationship with the Finnish consumer and our ability to come up with novelties that fit their needs even in difficult times.”
Good performance in the confectionery business
The confectionery business attained good financial results in 2013 with the support of the new biscuit products, which were very well received among retailers and consumers and brought in better than expected sales. The business was integrated successfully and new products were launched as a result of the collaboration of several functions. At present, Fazer is a significant challenger in the Finnish biscuit market.
“We see our re-entrance into the biscuit market with Fazer’s great confectionery brands as a true success story,” Christoph Vitzthum states.
In addition to garnering top ratings for its brands, Fazer was awarded the European Candy Kettle Award in 2013. Bestowed annually on a member of the European confectionery industry, the award recognises outstanding achievements in product quality, development in production, research and technology, performance in sales and marketing and international cooperation. It was only the second time in the 40-year history of the award that a company had been honoured more than once. Fazer previously won the award in 1982.
Fazer Food Services maintains market leadership
Fazer Food Services maintained its position as the market leader in Finland despite a turbulent economic environment, which affected the number of clients. During the year, new contracts signed in the cities of Kuopio, Tampere and Hämeenlinna supplemented large key customers in the existing portfolio. In addition, a tender was won with an existing client in the municipality of Vantaa. Several new contracts and renewed contracts were also signed with Finland based companies.
In a recent corporate image survey for corporate decision-makers, Fazer Food Services received the best ratings for product quality and service offering among food service providers in Finland. Fazer also emerged as the country’s best-known operator in the sector.
“We see a need for more targeted customer segmentation,” says Andreas Berggren, Managing Director of Fazer Food Services. “As the market leader in Finland, we aim to constantly evolve our offering. We see opportunities in a number of areas, including offering more targeted concepts to selected growing customer segments,” Andreas Berggren explains.
The Tallinn Production Kitchen improved its performance significantly during the year with an increase in sales resulting in a clear profitability turnaround. Part of the Finnish business, it supplies Amica restaurants with selected, popular food products.
The food service business is focusing on realising potential in takeaway, home deliveries and other services beyond its core lunch product. Initiatives in these areas proceeded in 2013. One example is the extended takeaway service, which includes new restaurant web shops.
Bakery shop and café concepts take off
The new Fazer Cafés offer first-class service in a carefully considered setting. Drawing on the tradition of the Karl Fazer Café in Kluuvikatu, Fazer Café incorporates current trends from major European cities. The renewed quality-focused concept has resulted in higher net sales and improvements in other key indicators like visitor numbers and average purchase value.
The bakery shop concept also progressed during the year with the opening of two new shops in Helsinki. The first Fazer bakery shop was opened in the capital in 2012. The concept is based on the popular Gateau chain shops in Sweden, which Fazer acquired in 2011 in order to meet a growing demand for handmade fresh-baked artisan bread and high-quality pastry. In addition to reinforcing Fazer’s leadership in the Finnish bakery market, the bakery shops are one example of the Group’s efforts to expand successful concepts across country borders.
* Brand Valuation study by Markkinointi&Mainonta magazine and market research company Taloustutkimus, 2013.
** Trust & Reputation study by T-Media in 2013.