It is almost six years since South Korean conglomerate Lotte Corp. snapped up Belgian chocolate manufacturer Guylian. When the transaction was announced, both sides pointed to the international boost the deal would provide to their businesses. That has panned out, with Guylian building its presence in Asia. However, growth has not been smooth, as the company saw last year.
Sales in 2013 were flat and, although Guylian does not provide specific figures, export director Steven Candries does indicate where the company performed well – and fell back – compared to 2012.
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“We had good growth in Europe and the US. The packages we had presented to the trade had been well accepted. We had a couple of new retailers onboard, which we didn’t have in the past, on a year-round basis and that helps on a sales basis immediately,” he says.
Candries cites Asia as a region where Guylian saw growth flatline in 2013. He declines to pinpoint which countries saw sales suffer compared to 2012 but insists they will improve this year.
“We were stable in Asia where we had very strong growth in the past. In a couple of key markets, they didn’t do a good job. That can be rectified and I think this year will be a much better year for us,” he says.
Guylian is an international business, selling products in over 100 countries around the world. However, between 35% and 45% of its turnover is generated in just five markets – the UK, Germany, the US, Australia and Canada.
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By GlobalDataCandries admits Guylian would like to further spread its sales around the world and, in 2014, the company is eyeing further expansion in key emerging markets Russia and China. However, Candries cautions against going too far, too fast in a market like China.
“China is a huge country but for premium and super-premium products the market is still quite compact. You can go into thousands of stores but the revenue out of this is not surpassing the cost in delivering them,” Candries says. “For us, we have to find a balance on how far can we go. We don’t want to say from the beginning ‘Let’s work for five years with a loss and win in the long term.’ That’s not our Flemish, Belgian thinking.”
Key to Guylian’s growth plans this year looks to be new products. Guylian is perhaps most famous for its chocolate seashells. However, Candries says Guylian must look at expanding its customer base and has developed two lines to be launched later this year – seashells containing caramel and containing biscuit.
“We want new consumers that we haven’t yet got, maybe consumers that do not like praline but they like this,” Candries says, pointing to the caramel product. “We are still growing with the core business we have but we have to attract a younger generation used to snacks, who, after studying and starting working, become a little bit more refined.”
The new products will be launched in the second half of 2014 and help Guylian to navigate what Candries will be a “challenging” year due to pressure on commodity prices. Earlier this month, cocoa prices rose to the highest level for over two years, while concerns over sugar production has recently pushed prices of the ingredient. Candries insists retailers will have to accept price increases.
“It will be a challenging year because of price rises in the raw materials. Some of the retailers say: ‘No we don’t accept anything’ but we are going to have to pass it on. It has to pass on to the retailer and the consumer,” he says.
It may, of course, be easier for a brand like Guylian, with its more upmarket status, to push through price increases than more mainstream products and help the company drive growth after a flat 2013.
