Romania’s FMCG Revolution
Macromex has positioned itself to take advantage of the massive opportunity in front of Romania’s frozen food market, the company priding itself on innovation and quality across its operations
Writer: Tom Wadlow | Project Manager: Matthew Selby
Frozen food is big business in Europe. Worth around $70 billion in 2018, the industry is forecast to grow by another $18.9 billion between 2019 and 2023, or four percent annually.
Convenience, affordability and extended shelf lives are all major reasons why this FMCG category is worth tens of billions of dollars continent-wide, consumers and commercial operators turning to the freezer to supplement their fresh grocery purchases.
However, in Romania, unlike the majority of nations in Central and Western Europe, the benefits associated with frozen food are yet to be fully exploited.
Romanian consumers spend on average just €17 ($18.85) a year on frozen food, compared to €133 ($147) in the UK. In terms of per capita consumption, the 0.8 kilos of frozen produce eaten annually in Romania is among the lowest in Europe, well behind the likes of France (10.5 kilos), Hungary (7.4 kilos) and Slovakia (1.1 kilos).
The opportunity to grow the segment is therefore enormous, and for frozen food leader Macromex, exciting times lie ahead.
“The development of new segments is another opportunity,” comments Albert Davidoglu, the company’s Chief Executive Officer. “Non-dairy milk products, vegan products, frozen bread and pastry, and ready meals are among the areas we see room to grow.
“Busy lifestyles mean people have less time for cooking, while groups such as millennials also value socialising with friends and convenience – these are all social demographic trends influencing our sector.”
Davidoglu’s observations are made with 20 years of FMCG experience behind them.
Having worked for Unilever for 13 of those years before joining Macromex in 2012, he has worked across numerous subcategories such as detergents, cosmetics and food, the industry offering him the opportunity to fulfil all his career ambitions and develop as a leader.
“I think this sector chose me,” he quips. “Being dynamic and always on the move, this way of working fits me very well, and Unilever gave me the opportunity to learn, to develop myself and to meet great leaders.
“I decided to move on to a different path when I realised that I must develop my entrepreneurship skills, and moving to a Romanian business was the best way of doing this. Looking back, after seven years, I think it was one of the best decisions I have made.”
Indeed, Davidoglu is helping to lead Macromex’s ambitious and rapid expansion strategy.
Today it is a multifaceted business which delivers more than 50,000 tonnes of frozen (85 percent) and refrigerated (15 percent) products around Romania annually, equivalent to 120,000 pallets and 4.4 million kilometres of mileage covered by its 100-plus trucks.
Its 22 product categories include frozen vegetables, meat, fish, ready meals, cheese and ice cream across 15 brands, its own being Edenia, Corso, La Strada, Azuris and Casa Gruia.
These are produced and distributed by 490 employees out of its three major facilities – the Macromex HQ in Bucharest, distribution centre just outside of the Romanian capital and warehouse in Campia Tuzii, near Cluj, the latter site being home to the tallest frozen warehouse bay in Europe at 43 metres.
“For 25 years, Macromex has been the industry leader for frozen food products,” Davidoglu says.
“The expertise, the passion to always be one step ahead, the professionalism of the entire team, the product quality, the courage to take risks and the quick response to market opportunities have led the company to a steady and sustained development.”
For Davidoglu, the time has come to turbocharge this development journey.
“Our objective is to double earnings by 2023 by quickly growing our key brands Edenia, Corso and La Strada,” he continues, “as well as growing our bakery and ice cream categories, and the hotel, restaurant and catering channel by improving customer service based on an investment of €15 million ($16.64 million) in new trucks, digitalisation and a new warehouse.”
Edenia has been a particularly successful brand for Macromex in the past two years, with new products such as smoothies, pizza and an Asian food range all proving popular and targeted for further growth.
In terms of geographic expansion, Davidoglu reveals that the company is already selling into nearby Central Eastern European countries such as Hungary, Bulgaria and Moldova, these markets served though own distribution and (or) logistics partners.
Investing in quality
The secret to Macromex’s ongoing growth in fortunes, in Davidoglu’s view, is its power to turn new ideas into reality, using its vertical integration as a marketing and distribution company to its advantage.
“Our mission is to offer consumers a superior experience by giving them access to innovative products of impeccable quality,” he says. “In everything we do we focus on innovation, constant quality and healthy living.
“Our desire to offer the best has naturally resulted in the development of some very successful brands in Romania. The reputation and strength of these brands are proof that Macromex is today a benchmark in the industry. We measure our performance through our position and market share, through the reputation of our brands and those of our partners, but, most importantly, through the value we bring to our consumers’ lives.”
Such benchmarking would not be possible without sustained investment in technology and people.
The aforementioned distribution centre at Campia Tuzii, as well as standing at 43 metres in height, is fitted out with state-of-the-art pick by voice and warehouse management systems, digital solutions which enable it to handle 3,000 pallets a day across a temperature range of four to -24 degrees Celsius.
The new warehouse mentioned by Davidoglu, Corso Distribution Centre, will replace the existing facility near Macromex’s HQ in Bucharest and will have a capacity of 10,000 pallets, an investment that will cost €12.8 million ($14.2 million) – a combination of in-house funds and financing from Alpha Bank Romania.
This will deliver what the CEO describes as important synergies within the organisation, thus improving operational efficiency and work productivity.
“We have extended the technology and digitisation initiative to the other functions of the company too,” he adds.
“Let me give you an example from sales. In the hotel, restaurant and catering channel one order costs €10, and there is a lot of carbon footprint generated with this order as a sales agent has to visit each customer to physically deliver it.
“Our aim is to double the business in this channel by 2023, so imagine that we are able to take orders with a €1 cost per order while growing the business.
“How we can do this? By developing a web-based platform for B2B, where our customers will have 24-seven access to our portfolio, stocks and tailor-made offers. They can see the past orders, what other customers have ordered and enjoy an improved customer service experience.”
On the people side of the business, Macromex is also heavily invested.
It employs a young workforce, with millennials soon set to account for 45 percent of its headcount. At the same time, more than a third of staff have been with the firm for more than six years, an indicator that the company has a healthy mixture of loyal, experienced personnel and younger recruits.
Davidoglu recognises that finding appropriately skilled employees is a daily challenge, Macromex having to compete with other Romanian organisations to attract the brightest workers.
He adds: “In the last few years we have launched key initiatives concerning people development, including 360-degree feedback, standards of leadership, a new HQ with modern working stations and discussion places, and improving the clarity of our objectives and KPIs.
“We have training programmes adapted to the needs of every person, from basic skills to leadership competences. We want our people to be responsible, to be committed, to take initiative and to have a sense of urgency. We believe in open feedback and communication and want every person in the company – from picker, truck driver, and sales agent to senior management – to feel appreciated and valued.
“The company does not have millions of meetings where we talk and do not take decisions –rather, we have to keep the entrepreneurial spirit alive, to empower people and to give them space to take action.”
Looking ahead, continued investment in people is one of several key priorities highlighted by the CEO as Macromex heads towards 2020.
With its bold expansion and investment plans in place, and a domestic market primed to further exploit the benefits of frozen food, the future looks bright.