In 2014, the business of Paulig*, like that of many other companies, was affected by a number of unanticipated factors. Geopolitical tension, the Ukrainian crisis, combined with rapid fluctuations in the exchange rates of the main currencies for Paulig  - the euro, the rouble and the dollar - stirred disruption and uncertainty in the business climate. Also, the price of green coffee went into a strong upswing at the beginning of the year as a result of the drought afflicting the harvest in Brazil. In spite of the challenges, the targeted results were achieved.
*Coffee Division of Paulig Group

A busy time in the coffee market

Paulig's market position has taken a favourable trend in different countries. On stable markets such as Finland and Estonia, Paulig is the market leader, as it is also in Lithuania. In Finland the competitive scenario has picked up momentum, and new coffee products and services are enlivening the market. In Russia, Paulig's market share also held steady; in terms of sales value Paulig is market leader for roasted coffees and for sales quantity it is in second place. In Latvia, Paulig's recognition factor was boosted strongly by an expansion in TV marketing efforts and through active in-store marketing. The expansion of operations into Poland was abandoned. Competition is heavy in the national coffee market and the consumer price for coffee is very low.

In Tver, Russia, Paulig's roastery operations have stabilised. Paulig is an important employer and taxpayer in the area. Thanks to an efficient team, operations at the roastery have been brought into line with Paulig's quality requirements in a short time, and last year the roastery was also granted OHSAS 18001 occupational health and safety certification. The crisis in Ukraine has also impacted Paulig's operations. In Russia, consumers' purchasing power has declined due to the depreciation of the rouble, and the manufacture of products for export to Ukraine was moved from Tver to the Vuosaari roastery. On the other hand, because of the local production plant, sanctions or import bans between Russia and Western countries had no effect on business. Developments of the situation in the region are being monitored closely.

Corporate acquisitions diversified the service offering

The merger at the end of 2013 in which Vendor was merged with Paulig has boosted the development of the out-of-home business sector. The merger applied to operations in Finland and the Baltic countries. Paulig's aim is to grow dynamically as a provider of coffee services and the new business unit formed for this purpose, Paulig Professional, has got off to a rapid start.

Small roasteries have become a phenomenon in many European countries and the USA. In Germany, for example, there are hundreds of small roasteries, with a combined market share of roughly five per cent. This rising trend is also appearing in Finland, and in May 2014 Gustav Paulig Ltd acquired the business interests of the Robert Paulig small roastery together with the Robert Paulig coffee brands. Operations continue in the subsidiary Robert Paulig Roastery Ltd, and the products retain the Robert Paulig brand. The transaction had no effect on the personnel. The Robert’s Coffee café operations were not included in the deal.

Harmonisation fosters efficiency

Paulig Group aims to harmonise and streamline its operations among the various divisions. There are several projects under way in the spheres of HR, ITC and procurement, and the Coffee Division is actively involved in these. Responsibility work will also be guided in the future by Paulig Group's common framework and programme for responsibility.

Paulig is renowned in Finland as a corporate trailblazer in responsible business. In an annual survey of companies' reputations and corporate responsibility (TNS Gallup), Paulig took first place last year in the section for food industry companies. Paulig placed second overall in the survey. Active participation in societal development is visible in small and large actions. For example, last year Paulig took up the Emergency Coffee Challenge (Hätäkahvit) in Finland, started in the social media by young mothers. During the summer, the Paulig Group made a sizable donation of 1.5 million euros to the New Children's Hospital project.

 

The year 2014 in figures