Rieber & Søn, the Norway-based food group, is a business that stretches across the Nordic region, Eastern Europe and Russia. It is also a business that, in recent months, has offloaded a clutch of assets to focus on a tighter group of operations. Michelle Russell spoke to Rieber & Søn CEO Patrik Andersson on how he is looking to reshape the business amid the downturn.
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just-food: Rieber & Søn’s sales edged up by only 0.6% for the third quarter of 2009. What do you think had the biggest impact on sales for the period?
Patrik Andersson: In general, the top line was not very strong but we have to remember that the third-quarter last year was quite strong. We have also divested some businesses and cut some of our portfolio, so all in all, it’s ok.
just-food: You said you would like to see stronger sales in the fourth quarter. How do you intend to improve your top line?
Andersson: I think it’s going to be a bit of a challenge for us for the fourth quarter. We had also quite good sales in the fourth quarter of last year and we are cutting off some products so I think we will continue to see a somewhat moderate top-line also in the fourth quarter.
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By GlobalDatajust-food: Are there any products in particular that you’re looking to dispose of?
Andersson: I can’t say but we have a programme called ‘Core Review’ and it allows us to see if there are products we are going to keep or sell and if there are any we are going to cut off if they are no longer profitable.
just-food: How much of an impact do you think the downturn in the economy has had on your business as a whole?
Andersson: In foodservice, we definitely see an influence from the economic downturn. We see that hotel stays in Norway have decreased by 8%. We see that customers are de-stocking. It’s a very soft market right now. It’s not getting any worse but it’s not getting better either. If you look at Russia, if my calculations are right, I think we are down on volume 25-30% in the quarter and most of that has to do with the economic downturn and the problems with the Russian economy. So, in those two areas, we are definitely influenced by the financial climate.
just-food: You had your acquisition of the Polish tea-to-chocolate business Gellwe blocked earlier this month. That must have been disappointing for the company?
Andersson: Yes, it definitely was. First of all, we spent quite a lot of time on that acquisition of course. And then our expectation was that it should have gone through with the anti-monopoly authorities. They have a different view of things and we disagree with that view but we are not going to appeal that to the court as that’s going to take too much time, so we have decided to terminate that contract and that acquisition.
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Patrik Andersson, CEO, Rieber & Søn |
just-food: Are you now looking to acquire any other brands?
Andersson: Our focus now is on improving the underlying operations, so we are going to see if we can push even more innovations through the market. We are looking at cost cutting programmes in the business, so on and so forth. So that is our main focus right now.
just-food: You sold onion ring business Rieber Kruiningen in the third quarter and also offloaded your Sopps brand and related portfolio of pasta products to Lantmännen Cerealia. What was the decision behind the sale of the Sopps business?
Andersson: For us, the pasta business is a trading goods business. We buy, we don’t produce it ourselves, we buy it from external suppliers. We have a very strong position on the Norwegian market. However, we see that that’s not our core business. It’s very difficult to develop that channel in terms of product development differentiation, so we think that that’s a category where we have few advantages against the more focused pasta producers. It was the right time to sell the pasta business.
just-food: How do you expect the disposal of these business will affect the company’s full-year results?
Andersson: Obviously the [Rieber Kruiningen] disposal is going to give a negative result, however, that is more than compensated by the Sopps sale, which gives us a positive. So, in the end, I think it’s going to give a small positive effect on the one-off items.
just-food: You also de-merged the King Oscar seafood business at the beginning of the month, which generated a gain of NOK50m (US$8.7m). What was the rationale behind that move and what will the money be used for?
Andersson: We haven’t raised any money yet. We have clearly stated that we are not going to be in canned seafood for the long run. I think that there is going to be a consolidation process in that industry and we don’t see ourselves as the majority owner of King Oscar in the future. That’s why we have broken out King Oscar into a separate company. It has a separate identity now. Of course, it’s consolidated in our figures but we are now starting a process in which we talk to different interested parties to see if we can find a solution.
just-food: You’ve said you want to focus on your “core” businesses. Which areas in particular will be your main focus?
Andersson: I think we have to find a couple of areas where we want to focus. One is what we call culinary. It’s all soups, sauces, casseroles and ready-made dishes, and so on and so forth. That’s number one. Then we have cold culinaries, like salads, dressings and ketchups and so on. That’s number two. And then number three is sweet products and baking products, which we have in Poland and Sweden. And the last is foodservice. These are the four main categories where we’d like to put our attention.
just-food: Your main markets are the Nordic countries and Eastern Europe. Do you have any plans to expand into any other markets?
Andersson: For the time being we are staying in these countries where we are. We have our full focus now on the improvement programme that we are driving throughout the business so there are no plans to go into any other countries.
