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Providing healthier options

05 Березня 2009

Джерело: "Beverage Innovations", Issue 63 - February 2009

Predicting a rise in Ukrainian market growth, Vitmark has benefited in recent years from its production of premium brands such as Jaffa, Ice Tea and Aquarte. beverage innovation Editor Claire Phoenix spoke with President Vitali Vinitski on how the company has developed its innovative platform and how it plans to deal with the current economic crisis.

 

Now owning over 22% of the Ukrainian Juice Market, JV Vitmark Ukraine manufacturers juice, nectar, juice drinks, baby food and concentrated products with its main brands being Jaffa, Sokovita, Odessa Baby Food Cannery, Our Juice and Aquarte. Founded in 1994 the company turnover in 2007 was $144 million (€109 million) and continues to make considerable impact in the beverage sector.

 

beverage innovation
 interview

- In 2007 you give company turnover as being around $144 million. What are the figures for 2008 and predictions for 2009?

Company turnover for 2008 is approximately UAH800 million (€78.5 million). In spite of the economic crisis our 2009 Target Is UAH1 billion (€98 million). The global economic situation is expected to cause growth rate slowdown, but we are going to launch new value for money products and so compensate for the slowdown in the premium segment.

- Please explain JNSD market share of 23%.

In JNSD (juices, nectars, still drinks) category the company is represented with three brands. Brands market share Is: Our Juice (Odessa Baby Food Cannery) 12%, Jaffa 9%, Sokovita 2%.

 

 

VITALI VINITSKI Profile
48 years old
1994-2009 - President, Vitmark-Ukraine
1991-1994 - CEO, Import/export company
1988-1991 - Chairman of the business co-operative
1982 -1988 - Engineer/Head of Ribstroy Equipment Installation
1982 - Graduate of The Technological Institute of Refrigeration - specialist in technical cryophysics

 

 

-Vitmark has grown considerably since its inception in 1994 to what do you attribute this growth?

Vitmark began its operations at a time of Ukrainian market growth. These economic tendencies demonstrate that the faster the market grows the faster production Increases. We happened to choose the right time to start.

There were times when the company grew faster than the market. From the beginning we aimed to be an innovative company, proposing new tastes, new products and new packaging to consumers.

We were the first to market with glass portion packaging for horeca, the first to install a hot fill PET line, the first to use Tetra Pak Prisma and basically were innovators presenting new tastes and flavours to the market.

- What have been the major milestones along the way? And the low points?

From the beginning, Vitmark has enjoyed rapid but stable development. We can define three milestones along the way. Up until 2002, the company produced only the Jaffa brand - and Jaffa became well known as a prestigious and popular trademark. The company then started producing Odessa BFC juices and baby food of excellent quality using Ukrainian fruit. And since 2006, we have begun penetrating into other beverage market segments, establishing a reputation as an innovative leader.

Now is a tough time as far as business development is concerned - with credit for investment difficult to negotiate. We cannot forecast sales and production, so this market instability is the main stumbling block we have encountered along the way. The problem we have been faced with is implementing innovation. It always takes longer than we would like it to.

And finally we come to our strength in distribution! We have one of the strongest distribution networks in Ukraine, but we never forget that our main competitors are Coca-Cola and Pepsi, who have the best distribution system of all. So we have plenty to work on!

 

 

- Which of your products is most profitable to the company?

Please see table below.

PET drinks - ice tea and juicy drinks have the highest margins. The profitability of these categories is at least 30%. But nevertheless, according to our sales volumes, juices and nectars have the highest contributing share, and comprise the main part of the company's business.

- Please explain the thinking behind Jaffa Viva?

Reacting to the growing world tendency towards active lifestyle and concerns over health, Jaffa Viva was launched in April 2008, and since then it has enjoyed popularity among a wide ranging audience.

Jaffa Viva is the first line of fruit and vegetable juices made without sugar, created for weight-control. A unique combination of 'two fruits + vegetables', it minimises the amount of calories and still offers the consumer delicious 100% juice.

When making light juices, producers usually substitute sweeteners for sugar but many consumers do not consider these as 'good for you'.

We have developed totally new recipes, and to minimise calorie intake we have added vegetables to our fruit juices so that they remain tasty but very healthy.

The assortment includes five flavours of juice offering a variety of tastes and functionality:

  • apple carrot mango
  • mango pumpkin maracua
  • apple carrot orange
  • apricot pumpkin banana
  • carrot banana strawberry

At present, Jaffa Viva is our only brand which has its own website - www.jaffaviva.com

 

Please provide a timeline for each of your product launches Product Launches.

  • Jaffa - 1995
  • Jaffa (in glass) - 1999
  • Jaffa Gold - 2001 (premium extension)
  • Our Juice (OBFC juices) - 2002
  • Jaffa Select - 2006 (Jaffa key product line re-brand)
  • Chudo-Chado (Baby Food) -2006 (baby food line re-brand)
  • Jaffa Fresh Up (light nectars in PET) - 2007
  • Jaffa Viva - April 2008
  • Ice tea - 2008
  • Aquarte Functional Water - Jun 2008

- Where do you see Vitmark's position in the Ukraine beverage market? And that of Europe?

Vitmark is an innovation leader in the Ukrainian Beverage market, and we are striving to lead in sales too. In 2008 we launched four innovative products in Ukraine, including 'Jaffa Viva' - a world juice innovation and 'Aquarte' a new category to the Ukrainian market of clear functional drinks.

Assessing demand for functional water as a growth area, in 2008 Vitmark launch Aquarte in Energy (hibiscus pomegranate guarana), Protect (acerola cherry) Focus (apple and ginseng) and Relax (passionfriuit, mint and chamomile)

We are now working on further innovative products to be launched in Ukraine and then exported. Vitmark beverages are now well known in 18 countries across four continents: Eurasia, North America, Africa and Australia. Recently we have begun working in Cyprus, Estonia and Lithuania. The company has created branding and products which are attracting attention from beverage companies in West Europe and we are currently developing exports to Germany, the UK and France.

Despite the world export slowdown, the company plans to extend the volume of exports in 2009 both due to increasing the quality of our work within the current partnership base and the active involvement of new clients from further afield.

 

 

- How has your target audience changed and where do you see future growth? New packaging or formats, new launches or another strategy?

Key consumer trends until now have been H&W (health and wellness), on the go consumption growth and trading up to premium brands. Those trends drove the development of the functional products segment and PET packaging - offering convenience and premium pricing. In the current period of consumer crisis we expect a breakdown of the premium market (10% decrease expected) and a growth in 'value for money brands' as the key driver of consumers' choice. The strategy is to focus on the key brands in JNSD offering value to consumers, and developing further economical offerings in new beverage segments presenting 'smart choice' products, mostly for the home consumption segment.

- Where do you see yourselves in five year's time?

I would like to be at the head of a leading beverage company whose products are a delight for both consumers and shareholders!

      

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