Müller Romania: We Grew 40%, We Didn't Sit On Our Hands Waiting For The Crisis To Pass

12.02.2011 By Roxana Petrescu

German dairy producer Müller estimates its sales in Romania will rise 40% to EUR10 million in 2011, amid a flat market.

For 2012, Müller also predicts a two-digit increase. The company doesn't rule out additional investments in production units, provided the brand grows according to expectations.

Müller entered the Romanian market in the summer of 2008, when the economic crisis was considered to be something that in no way could affect the Romanian market. Things turned out to be completely different, with the wage cuts, the tax increases and the layoffs affecting people's purchasing power, which meant that most of the markets were affected.

"We had a few weeks of market growth, then came the crisis. It wasn't difficult for us to change our plans because we had a cautious approach from the very start," says Tzafrir Granat, who has been running Müller operations in Romania for almost a year.

German cautiousness

The approach of the German company was based largely on advertising campaigns, a segment for which it invested millions of euros, as well as on product launches. So, at the end of September, Müller yogurts ended up having a 5.3% share of the market by value, being the second-largest consumer brand after Danone, according to market research company Nielsen.

"We consolidated our brand. This has been our purpose from the very beginning. In 2008 we were unknown, nobody knew our brand or our product. We continued investments in the brand and in 2011 we also introduced new products and flavors." Granat says the company has not stood arms crossed waiting for the crisis to pass.

"So for this year we expect 40% turnover growth. It's been a good year, although the market stagnated, and for next year, we also expect two-digit growth," explains the representative of Müller Romania.

According to Finance Ministry data, Müller 's turnover reached EUR7.6 million last year, twice as high as in 2009. The company's losses amounted to EUR4.5 million, lower than the EUR4.9 million turnover recorded in 2009.

Smaller losses

"This year losses will be smaller. Anyway, they are part of our plan and we think in 2-3 years' time we will become profitable," Granat says, without specifying what the company's losses amount to this year.

According to him, Müller 's portfolio includes 76 products, 50% more than in 2010, with the brand being present on segments such as yogurts, milk and sour cream.

"We will also tap other segments in the near future," Granat also said, without naming them. Müller products are currently to be found in 70% of the big retail chains, with the rest being sold in traditional stores.

The head of Müller says depending on how things fare on the Romanian market, an investment in a production facility is also a possibility.

"When we feel our brand is strong enough, we could consider having a production facility here, whether it would be a greenfield investment or an acquisition. We are always looking at what's happening on the market," Granat added.

The head of Müller admits the group has had talks for a possible acquisition of Albalact, a dairy business controlled by the Ciurtin family, but the talks did not come to anything.

Recently, an Israeli newspaper published an article according to which Tnuva, the largest group in Israel's food industry, is considering selling its Romanian operations, after the Israeli producer posted significant losses in the wake of EUR60 million in investments.
So Müller could have acquisition targets on the Romanian market.

Tzafrir Granat took over as general manager of Müller Romania at the beginning of this year after being the company's marketing vice-president previously. Müller Dairy Romania is a joint venture between Germany's Müller and Central Bottling Company (CBC), which is a shareholder of Coca-Cola Israel, as well as of local beer producer Tuborg.

(English version by Daniela Stoican)