Business area Professional
Customized meal packaging solutions are a growing segement.
Net sales and operating income
Net sales per product group
Net sales per geographic region
Healthy sales, high margins
The Professional business area offers customers, primarily within the restaurant, hotel and catering markets, a wide range of table top products which are normally brought together in complete concepts consisting of napkins, table covers and other products in matching colors and designs.
Approximately 90% of Duni’s sales to restaurants, hotels and catering firms take place via wholesalers and cash-and-carry stores. The number of end customers is estimated at approximately 200,000. Duni also offers meal packaging solutions to restaurants, the grocery retail trade, industrial kitchens, the public sector and catering firms. These solutions comprise primarily plastic boxes of varying models and sizes for different types of take-away meals. Both customized and standardized meal packaging solutions are available. Duni also provides sealing machinery for one part of the range (DuniForm®).
Development in 2009
Net sales within the Professional business area increased by 4.1%, to SEK 2,885 m (2,771). Operating income increased by 9.2% to SEK 402 m (368). This generated an operating margin of 13.9% (13.3%). The margin improvement is mainly due to a weak Swedish krona, as well as lower costs for input materials and cost savings within logistics, sales and administration.
The downturn in the economy continued to have a negative impact, but the decrease in volume in Professional in 2009 was significantly less than the decline in GDP on core markets. This demonstrates the resilience of Duni’s business model and relatively stable underlying sales, even in volatile economic conditions.
Central Europe continued to deliver strong results and the German market registered only a modest decline in volume. On the UK market, Duni increased its market share and enjoyed healthy growth despite a declining market.
The markets in Eastern Europe had a tough year and suffered some volume losses, but in the longer term Duni’s confidence in those markets remains intact. In Southern Europe, the Spanish market in particular was weaker due to the impact of the recession on the HoReCa market.
On the Nordic market, sales declined in line with the general downturn in the economy. Sales were, however, lost mainly in lower end products, while Duni successfully maintained sales in the premium segment.
For the business area as a whole, table top products accounted for approximately 90% of net sales, with meal packaging solutions representing the remaining 10%. Central Europe accounted for SEK 1,755 m (1,616) of net sales, while the Nordic region accounted for SEK 639 m (664). Southern and Eastern Europe accounted for SEK 467 m (469) and other markets for SEK 24 m (22).
The global recession has had a clear negative impact on the HoReCa industry as a consequence of a decline in travel, corporate events and private consumption. A combination of Duni’s leading brand positions, unique premium product range and strong sales force has mitigated the impact on sales. Our assessment is that Duni has gained further market share, in the premium segment in particular.
Events during 2009
In Eastern Europe, the efforts to gradually develop an effective sales infrastructure have continued unabated despite the tougher market conditions. Development of a sales and distribution network serving the Moscow area is progressing well and will ensure that Duni is able to benefit in full from a market recovery, as well as from the long-term potential of the Russian market.
On the UK market, the increased sales efforts are paying off and a major contract with Booker, the largest cash-and-carry in the UK, creates a strong platform for further growth.
In Germany, Duni continued to gain market share from both competitors and from conversion of linen users. Duni’s core products, namely napkins, placemats and table covers, have now reached such a quality and feel that the advantages of flexible design, variations in table setting and a high hygienic standard represent a very compelling alternative.
Premium products and especially the newly introduced Sensia®, Elegance and Duniletto® products demonstrated good sales growth and Duni’s position as the leading premium concept supplier has been reinforced.
Duni also made further in-roads into the promising market in the Middle East and is in the process of building up a sales presence through local distributors and its own sales representatives with a clear focus on high-margin products.
Sales within the take-away and foodservice segment, Duni FoodSolutions, continued to grow. Duni has increased its efforts in offering branded chains customized meal packaging solutions, building on promising key account activities in 2007 and 2008. In Germany, Duni succeeded in 2009 in closing further deals in this area with customers such as the fish- and seafood specialist, GOSCH, and the Thai restaurant chain, Kaimug. These customized take-away concepts are seen as brand carriers with the ability to reinforce corporate identity and create an edge over competitors.
There is a clear trend towards more take-away and what is referred to as fast casual, i.e. value-for-money restaurant chains with systemized, modern concepts. Within Duni, focus is on packaging solutions for take-away, particularly within the premium segment, based on a proposition that clearly provides added value for the customer.
Duni has also introduced the Duni ecoecho™ range - an eco-product range for serving and meal packaging solutions. It is based on the best materials available with the goal of limiting the use of non-renewable resources and reducing the CO2 footprint. Sustainable new material technologies such as bagasse, PLA and rPET are used. The products are compostable, designed for recycling or made from recycled materials.
Sales and customers
Duni’s sales model is based on a large sales organization which devotes most of its time visiting end users in the HoReCa segment. Parallel to this, wholesalers and cash-and-carry stores are also covered. The visits to end users distinguish Duni from its competitors, whose sales are primarily focused on wholesalers and cash-and-carries.
Although approximately 90% of Duni’s sales within the Professional business area take place to wholesalers and cash-and-carry stores, approximately half of the 250,000 visits annually take place to end customers. Orders are then booked and passed on to the wholesalers. Customers are also registered in Duni’s database. These direct relations with the end customer constitute important capital for Duni and create an added value for the wholesaler.
The Duni premium concept
Duni’s concept is reflected in the following success factors:
• high quality and hygienic solutions.
• matching overall solutions in many different colors and designs.
• reduced time spent on folding napkins and resetting tables compared with linen products provides a possibility to serve more guests.
• lower laundry and personnel expenses.
• no fixed investments or long-term lease contracts for linen products.
Within the cash-and-carry segment, customers are served centrally by key account management. In the Nordic region, packaging solutions are to a large degree sold directly to end customers, while end customers in other regions are mainly covered via wholesalers. Duni has also begun to market meal packaging to certain cash-and-carry stores. Packaging solutions for take-away are sold primarily to the public sector, the grocery retail trade and restaurants.
Brand positioning
Duni believes that it has the strongest brand on the European market for disposable napkins and table covers. According to a survey conducted by CHD in 2008, no less than 86% of the customers in Germany mention Duni when asked which napkins they use. This compares to 76% in the 2006 survey and is more than three times the figure for the closest competitor. This gives Duni a very strong position among wholesalers and cash-and-carry stores, since many customers specifically ask for Duni’s products. This also creates barriers to entry for competitors with weaker brands. The brand also creates strong loyalty among end customers, with a position as the pre-eminent premium product supplier. Duni is endeavoring to further strengthen its brands through a clear positioning. Duni is used as a main brand, while the Company’s other brands such as Dunicel®, Dunilin®, and Dunisilk® each represent a particular quality, style and price level and are differentiated through clear packaging design.
Customized meal packaging solutions are a growing segement.
Net sales and operating income
Net sales per product group
Net sales per geographic region
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