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The Rocketing Rise of Elite Romania

Today, Elite Romania employs 380 staff in production, sales, marketing, IT, human resources and administration. Starting from its zero baseline in 1995, Elite Romania has built an efficient sales and distribution organization, recruiting regional distributors nationwide: supermarkets, cash and carry, traditional retail, kiosks, open market and away from home. The Romanian market is stable, with a slight increase in R&G, while shrinking in instant coffee.

Eliezer Schneider finished his Romanian assignment in March 2001 and was nominated as c.e.o. Elite Brazil, while Eli Rachmut replaced him in Romania.

Meanwhile, in neighboring Bulgaria, Elite has been involved since April 1999. This involvement differs from the company’s policy in other European countries. Operation of the factory, located in the small town of Vulchidol near Varna, was at first undertaken by a local franchisee, under the supervision of Elite. During 2000 the company was purchased, and it’s now under the full ownership of Elite.

Bulgarian coffee consumption is somewhat higher than in other East European countries, averaging 2 kgs per head annually. That is supplied mostly in whole-bean roasted form, in a country where most households own a coffee grinder.

Ehud Laks, the c.e.o. of Elite Bulgaria, says: “Some 80% of Bulgarians drink Nova Brasilia, a very strong single origin coffee produced in Bulgaria, packed in a very simple plastic bag which is perforated to allow the gases to escape. The remaining 20% consume five or six local brands or imported products.”

Following on market surveys and tastings held among Bulgarian consumers, Elite launched a new high-quality coffee, Elite Classico - a blend from Brazil and southeast Asia. The novelty for Bulgaria was the three-ply opaque packaging with valve standard enough in west European countries, but revolutionary to Bulgarian consumers who have been accustomed to packaging permeable to light, moisture and oxygen.

Part of the marketing process was to invite distributors and managers to a two-day workshop with a factory tour to display the innovative production and packaging machines, and explain their positive effect on taste and quality. Nowadays, Elite Bulgaria stands second in the market, with a 25% R&G market share, a wider range of products and strong stance in the AFH field.

Entering another Balkan-region country, in 1999 Elite International completed a joint investment with the Podravka Group for the production and sale of Elite coffee in the Croatian market.

In the beginning of 2000, Elite started operating in Turkey, purchasing a factory in Ankara. After an acclimatization period, Elite now launches a line of products in the R&G and soluble coffee sector, adapted to local tastes.

In central Europe, Elite Poland is exposed to much more sophisticated competition from well-entrenched multinationals, but has itself been established there since the early 90s. The company has equipped its factory in Poznan - the cultural and industrial center of western Poland - with state-of-the-art equipment and technology. Since 1996, Elite Poland’s quality assurance system has complied with the international standards of ISO 9002. The Poznan facility is the group’s largest factory.

Mark Tarnowsky, president of Elite Poland, has commented: “Elite was one of the first private-sector actors in Poland, and has reached the number two position, with 15% market share. The product range covers all the coffee segments and has a diverse activity in the AFH field.”

Towards the end of 2000, Elite established an independent sales and distribution network, exclusively for coffee. Earlier, this was made through GOMAN, a partnership between Elite and German Storck. Elite coffee is sold mainly in vacuum packs and stabilo-seal packs, supported by television advertising. The marketing challenge is to change the perception of a single brand to the concept of an Elite family of brands (an “umbrella”).

About three years ago, Elite started exporting R&G to Ukraine, and in 2000 opened a sales office, with a general manager and a sales team. Today, Elite leads the R&G market in that country.

After analyzing penetration possibilities to new markets, other than in Central and Eastern European areas, Elite reached the decision that Brazil is the country with the largest potential for the group’s activities. Brazil is the world’s largest coffee consumer after the U.S., with a relatively high growth rate. Additionally, the Brazilian market is highly fragmented, with 1,600 roasters and over 3,000 brands.

Towards the end of 2000, Strauss-Elite acquired Café Trés Coracoes S.A. Located in Belo Horizonte, Trés Coracoes (translated “Three Hearts” in Portuguese) is the leading company in the Minas Gerais state, with about 20% share of the R&G market. The company has a national share of about 40% in the cappuccino sector. Strauss-Elite now acts to establish its activities in Brazil through Tres Coracoes, under the management of Eliezer Schneider.

Strauss-Elite Ltd., 3 Hayezira, Ranat Gan 52521, Israel. Tel: 972-3-7533500. Fax: 972-3-7533555.

Reg Butler is a freelance journalist who covers the tea, coffee, and tobacco industries for Lockwood Publications. He can be reached via email at: r.butler@lockwoodpublications.com

Tea & Coffee - July/August 2001


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