Consumer business area
Designs for Duni® strengthens the brand and increases profitability
In 2013, the Consumer business area enjoyed solid growth, with an increase in volumes of 11.1% at fixed exchange rates. The increase is primarily due to the business area's success in securing a number of large new customer contracts.
Sales increased to SEK 603 (551) m and operating income increased to SEK 12 (6) m, representing an operating margin of 2.1% (1.0%).
Strong growth in Germany
Geographically, sales take place throughout Europe, crucially in central Europe, especially Germany. For several years, the European grocery retail trade within Duni's product range has been characterized by a low rate of growth and declining volumes. Sales have been differentiated and the products are now available at significantly more points of sale. At the same time, the packages have become ever larger.
Towards the end of 2012, contracts were signed with a number of major customers in Germany, which strongly contributed to the positive volume trend in 2013. Generally, the business area has succeeded in attracting several new customers and strengthening its market position on the important German market. Switzerland is another country which exhibited a positive trend in 2013.
The Nordic region accounts for approximately 17% of sales. There, too, volumes developed positively with an increase of 39%. Also in this region, the positive trend is attributable to new contracts and customers.
The business area has identified Poland and France as important growth markets. Here, special sales activities were initiated in 2013 aimed at promoting growth. In Poland, the business area can also take advantage of Duni's presence on the market thanks to its production in Poznan.
Designs for Duni® strengthens Duni's innovative role
One of the most important activities in 2013 was the start of a change in the business area's product range strategy, involving a gradual focus on premium products.
In order to strengthen the Duni brand as an innovative player, 2013 saw the creation of "Designs for Duni®", a unique concept in which Duni develops selected products in cooperation with well-known European designers and design houses. The concept positions Duni as a leading design partner at the retailers. This provides an opportunity for a larger percentage of higher margin contracts, while at the same time creating improved drawing power and a greater degree of innovation in the product range.
The Finnish design house Vallila was the first off the mark in Scandinavia. Their designs range from playful to futuristic and provide inspiration for elegant and unexpected table settings. During 2013, products were also launched with the Dutch design house Melli Mello. For 2014, products have been developed together with the well-known Swedish designer Hanna Werning. New collections from Vallila and Melli Mello were also launched in January 2014.
"Designs for Duni®" contributes to higher profitability and supports the business area's endeavors – through being highly innovative – to be a total supplier of products around the dining table. Both sales and profitability in 2013 indicate that the business area is taking the right step in this direction.
Customer categories on the consumer market
Customers are mainly grocery retail chains, but also other channels such as specialty stores. Sales within the Consumer business area are characterized by short-term campaigns and projects, as distinct from Professional where transactions are more long-term in nature.
Grocery retail trade
The European grocery retail trade is concentrated on a small number of large companies in each country, such as Tesco (the UK), Aldi (Germany), Carrefour (France), and ICA (Sweden). The larger companies have centralized purchasing and some have joined forces in international purchasing associations.
Other
Other customers within Consumer consist of pharmacies, various specialty stores, gardening outlets as well as other department stores and home furnishing chains.
Content
The Consumer business area's strategy in brief:
- Duni shall be the natural business partner for the European grocery retail trade.
- To operate in the category together with the grocery retail trade, based on a customer and consumer perspective.
- Through high flexibility and a service offering, to be part of the customer's business model, both within the trade's private labels and Duni's own brand.
| 2013 | 2012 | |
| Sales, SEK m | 603 | 551 |
| Operating income, SEK m | 12 | 6 |
| Operating margin, % | 2,1 | 1 |
| Share of total Group sales, % | 16 | 15 |
Sales and operating income, SEK m
| Net sales | Underlying operating income | |
| 2009 | 792 | 18 |
| 2010 | 689 | 32 |
| 2011 | 612 | 21 |
| 2012 | 551 | 6 |
| 2013 | 603 | 12 |
Net sales per product group, %
| % | |
| Napkins | 42 |
| Tablecoverings | 28 |
| Candles | 3 |
| Serving products | 12 |
| Other | 15 |
Net sales per geographic region, %
| % | |
| Nordic region | 17 |
| S. and E. Europe | 3 |
| Central Europe | 80 |
Percentage of the Group's total sales, %
| % | |
| Professional | 73 |
| Consumer | 15 |
| Tissue | 12 |
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