Tnuva Romania, the domestic subsidiary of the Israeli producer of the same name, has renegotiated contracts with suppliers, given up unprofitable products, rethought the promotion strategy and revised estimates after the company had felt a sales decline starting the second quarter of the year.
"We're seeing growth both in terms of turnover and volume, but not in line with our expectations as people have lower incomes. This year, we will not see turnover rise by 50% as we'd initially estimated, because turnover is a little above 10% higher in RON after the first eight months of the year," stated Shmulik Porre, Tnuva Romania CEO, without providing a new estimate of this year's results, though.
Porre maintains the dairy producer had not felt the crisis fallout before April. "Sales started falling then, and the dairy market is still falling," Porre says.
Moreover, the market share the company held on the fresh dairy products segment has started oscillating between 9 and 10% after a year and a half of increases. "For 2010, we want to maintain our market share and boost profitability. Before the crisis, we were investing in market share, but now its expansion is expensive as companies' battle for market share is fiercer," Tnuva CEO says.
He states that in the wake of falling sales, Tnuva Romania made some steps to boost efficiency. Thus, after the company carried out some promotional campaigns together with other companies (such as the campaign operated with Vel Pitar bakery producer) in the first half, now Tnuva Romania head says the strategy has changed.
"Now, we've done with promotional campaigns," says Shmulik Porre, though aware that the decision may translate into shrinking sold volumes. At the same time, though, this may be a way to improve the company's profitability.
The two companies Tnuva owns in Romania finished 2008 with cumu
