Second buys third in Romanian chocolate race
Leatherhead Food Research analyst Jonathan Thomas told ConfectioneryNews.com: “Leading Kraft brands such as Milka and Cote d’Or have been performing fairly well in Romania, so the company appears set to strengthen its position at the head of the Romanian chocolate market.”
“However, the proposed merger between Kandia and Supreme will create a stronger rival to challenge Kraft.”
“Once the global economic situation improves, it seems likely that the appetite for more premium chocolate brand amongst Romanians may resume its growth,” he said.
Kandia and Supreme confirmed the deal, but did not disclose fees involved as the merger was still awaiting regulatory approval.
A spokesperson from Supreme told Romanian press: "We have to wait for the Competition Council's decision then we can provide more information about the transaction." (Romanian translation)
Romanian chocolate market
According Romania’s Ministry of Finance, Kandia reported turnover of €31.4m last year, while Supreme turned over €21.8m.
Supreme had been exporting its brands, such as Primola and Anidor, to around 20 countries
Thomas said the chocolate market in Romania was not as large as surrounding Eastern European nations.
“At 2.2 kg, per capita consumption of chocolate in Romania remains on the low side, especially compared with the likes of Poland (over 6 kg) and the Czech Republic (almost 5 kg),” he said.
“However, the popularity of chocolate amongst Romanians continues to rise as disposable income levels have grown, mainly because chocolate is now more affordable for large parts of the population,” he added.
He said that moulded bars and countlines accounted for a combined share of 90% of the Romanian chocolate market.
The market has experienced some manoeuvring from the major players in recent years.
In 2004, Kandia boosted its market position by acquiring Excelent. Then in 2007 Kandia sold its Excelent business (Kandia-Excelent) to Cadbury.
Later in July 2010, soon after Cadbury was bought by Kraft, the company sold Kandia-Excelent to investment fund Oryxa Capital and relocated most of its production to its site in Svoge.
Investment in Romania
“It is perhaps significant to note that some companies have been investing in chocolate production in Romania – one such example is Mars,” continued Thomas.
In the ten years since the company started its Romanian operations, Mars has invested over €12 million in Romania.
In 2004, it spent €2.1m on new equipment for its production facilities.