Back to basics pays off for Campina

- Last updated on GMT

Related tags: Campina, Brand, Netherlands

Focusing on improving quality rather than lifting sales has paid
off for Dutch dairy group Campina, which has seen a solid
improvement in sales for its core brands despite volatile
international dairy markets.

Dutch dairy group Campina has reported solid results for 2002 as its long-term strategy of focusing on its core business continues to bear fruit.

Although Campina operates internationally, a good performance in its leading markets of the Netherlands and Germany is very important to the company. In the Netherlands, Campina became the largest retail brand during 2002, the company said, while its Mona and Vifit brands also performed well.

In Germany, Campina has become a strong player, taking its place among the top three dairy suppliers, and extended its leading position in the dessert market with innovative products in the Campina Puddis and Landliebe ranges. Campina Germany broke even for the first time last year after a substantial improvement in its performance.

The company's three principal brands - Campina, Landliebe and Mona - performed well in all markets. Further progress was made in implementing the brand strategy in 2002, with the introduction of the Campina brand in Germany, Belgium, Russia and Poland. These three principal brands now account for 28 per cent of turnover, up from 23 per cent in 2001, but the company has also continued to introduce new products in various segments of the market - packaging, cheese, desserts, bio-active peptides, etc.

But despite the positive evolution of the company's core brands, Campina's overall turnover dropped from €3.9 billion to €3.7 billion, mainly as a result of a reduction in the number of products sold in Germany and lower prices for generic dairy products. Campina added, however, that a decline had been expected because of the company's decision to focus on quality improvement rather than turnover growth in the last two years.

This programme of strengthening the performance of core brands is nearly complete, after two years of rapid international growth in 1999 and 2000. In fact, last year saw the company once again embark on a programme of international expansion with the acquisition of a stake in Farm Dairy, the takeover of dessert maker Strothmann and part of the ingredients business of Avebe - all part of its strategy of expanding operations in dairy drinks, desserts and high-quality ingredients.

Tiny Sanders, chairman of Campina​, said: "We are not dissatisfied with 2002. Our corporate objectives were achieved and Campina turned in a respectable performance, given the wider operating environment. Despite heavy exceptional pension charges and the accounting treatment of the write-down of the Wessanen shareholding, the result showed a substantial improvement. In this time of stock-market turbulence, the stability of the food industry and the benefits of a solid co-operative structure are clearly apparent."

"Campina is well placed to face the competition. We intend to continue on our chosen course, but as from 2003, the focus will be more on growth. The company is now ready for this. The three growth areas we have selected - dairy drinks in western Europe, desserts in Europe and ingredients globally - are and will remain a priority, and we'll continue to look for expansion in those areas. Accelerated growth by mergers, a route which was taken in the past, is now less of an option, as suitable candidates are scarce. We shall consider this route only if it offers clear added value for the company and the co-operative."

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