The FINANCIAL -- Barambo, the largest producer of quality chocolate confectionary and ice-cream products in Georgia, plans to increase its production by introducing new kinds of sweets in 2015. The company is planning to expand its share of export to Azerbaijan and Iraq. Active negotiations are underway to introduce Georgian Barambo to other foreign markets.
Despite the difficulties, 2014 was a successful year for the company; Barambo increased its market share. Growth was seen in its sales volume as well. The company has made significant investments in increasing the variety of its pastry range. Innovative products in the line of glazed candies were added to the assortment. Chocolate tablets with mousse filling were offered to customers too. All the new products have been highly appreciated by consumers. In addition, Barambo significantly increased its ice cream range.
“In 2015 we plan to expand the range of our confectionery and ice cream segments. We have produced chocolate-cream “Barambino”. It gained huge popularity among children in quite a short period of time. We plan to update the chocolate assortment from the start of the new season. We also plan to start producing wafers. Last year we purchased and installed a new installation line. This year we plan to actively enact it. This will be a new direction that will allow us to further expand our product range,” Alexander Stroganov, Head of the Sales Department at Barambo, told The FINANCIAL.
“As for exports, we are actively negotiating with the representatives of several countries. We plan to expand our list of products which have been exported to Azerbaijan and Iraq. Barambo will also add extra products, which will be calculated based on these countries’ customers,” Stroganov said.
For several years Barambo has been exporting its products to Azerbaijan. Stroganov estimated it to be quite an interesting market and added that the company is trying hard to increase its export share to this market. In 2014 Barambo entered Iraq. The products were highly appreciated on this market. The management is currently cooperating with the representatives of various countries for export.
Founded in 2009, Barambo is the market leader in many of the sorts of products which it makes.
“We always felt great support from Georgian consumers from the very first days after establishing the company. It is a great pleasure and a big incentive to develop, expand our assortment, establish innovations and indulge them. We are very grateful to Georgian consumers for their support. Such support, at the same time, is a big responsibility for us,” Stroganov revealed.
Five years is not a long time for getting established as a brand. Stroganov explained that as making a product of high quality has been the company’s guiding principle from the very start, it massively contributed to their success. “Our goal was to tailor it to the taste of the Georgian population. Before starting production, we carried out a number of researches, testing, in order to study the taste of Georgian consumers. Accordingly we accurately considered their expectations and desires. This approach has brought about its result. We can proudly state that Barambo has become the favourite brand in sweets production for Georgian consumers.”
The market of sweets products in Georgia is quite saturated with imported goods. The GEL devaluation has increased prices on import. Meanwhile, as Stroganov said, their competitive advantages did not increase in line with it and it has not been reflected in sales growth. “Chocolate and confectionery goods in general are not primary use products. Therefore they are very sensitive to price changes. Accordingly, currency devaluation and price increase adversely affect the sale of confectionery products. Hence, we cannot say that our sales have increased due to the devaluation.”
In addition, Stroganov added that the GEL devaluation has had its impact on Barambo. “The majority of raw materials are imported from foreign countries. The main share of products are sold domestically, denominated in the national currency. Accordingly, the sharp devaluation of the national currency has had a negative impact on our company,” he said.
Since Georgia’s independence, Barambo was the first chocolate and sweet producer to have started production in Georgia on such a big scale. It is unique in the Southern Caucasus in terms of its volume, quality and production technology. Using European technologies and high quality goods from Belgium, permanent control of the production gave the possibility to the company to achieve the standards of the world’s leading countries.
Barambo is a success story of a producer company in Georgia, where trade still remains the main focus of the business community.
The FINANCIAL asked Stroganov to explain why production is less of an attractive business direction for local investors. As he said, production is quite a difficult segment. “It is not easy to plan, manage and implement processes of such complication. In such a small market as Georgia, local producers have to compete with international companies that have many years of experience and a lot more financial opportunities. In this field it is important to have a strong point that distinguishes you from the competition and provides competitive advantages,” Stroganov believes.
“Of course the food industry is not easy either. However, unlike the manufacturing sector there is more experience, more trained personnel,” he added.
Barambo has now won the Golden Brand title for the third time already and is claimed to be The Best Chocolate Brand.
Barambo is distinguished by its diverse assortment: chocolate bars, chocolate sticks, chocolate sweets, assorted sweets, caramel sweets, ice-creams, etc. The company first started producing ice-cream from March 2011. The ice-cream plant’s equipment is made in Italy and was installed by Italian technologists. The 15 different ice-creams have become very popular in society recently. From November 2011 Barambo started working on a new direction of sweets production and offered customers wafers and wafer tarts.
Georgians are less prone to consume ice-cream in winter. However, as Stroganov said, this trend has started changing recently. On the global market, Scandinavian countries are the leaders in ice-cream consumption, despite their cold climate. Ice-cream consumption in Georgia during winter was almost zero for a long time.
“Such a situation is more or less typical for most southern countries. One of its reasons in Georgia is that the Georgian market is quite small. So, it is not profitable for ice-cream producers to run their manufacturing, infrastructure and distribution during the non-seasonal period,” Stroganov said.
“In addition, I would like to point out that ice cream consumption in Georgia during winter is now characterized by a growing trend. This refers to family-style ice cream,” Stroganov told The FINANCIAL.