Sotiris Yannopoulos, the general manager of Star Foods Bulgaria and Romania, says after PepsiCo's purchase of Bulgarian producer Penelopa, the company's plant near Bucharest will undergo development.
In early 2007, Star Foods Romania, the biggest player on the salted snacks market, rebranded its chips portfolio, when it introduced Lay's (PepsiCo's international brand) on the market and dropped the Star Chips brand name it had used until then. According to Yannopoulos, however, the brands Star Foods developed domestically before being taken over by PepsiCo have retained an important role on other segments of the salted snacks market.
"Lay's introduction on the Romanian market is the result of two years during which the market impact was analysed and plans and investments were made," the Greek manager said.
During this period, Star Foods invested several million euros in the production facility in Popesti-Leordeni (Ilfov). In the second half of 2007, the company acquired an automated chips production line, which boosted the production capacity of the domestic plant by 25%. Despite Lay's being Star Foods' main product, other domestic brands such as Star Snacks, Star Popcorn, and Krax account for 50% of the products manufactured domestically.
"We won't relinquish our domestic brands. The recent acquisition of Bulgarian company Penelopa allows us to transform national brands into regional ones, and create a presence in the Balkans," says Yannopoulos.
PepsiCo bought Penelopa in early 2007. Prior to the deal, PepsiCo was only present on the Bulgarian market with products imported from its plants in Romania, Greece and Turkey.
Yannopoulos has been in charge of Penelopa since the start of this year. The manager believes there is potential to boost the volume of crisps produced at the Popesti-Leordeni plant and sold in Bulgaria. The first step will be to improve distribution on the Bulgarian market and also to step up marketing activities. This year, deliveries to Bulgaria are expected to account for around 8-9% of Star Foods' plant production in Romanian.
The Bulgarian salted snacks market is almost 3 times smaller than the Romanian one. According to Yannopoulos, while the domestic chips and salted snacks market reached 20,000 tonnes last year, up from 15,000-16,000 tonnes 3 years ago, total sales on the Bulgarian market failed to exceed 7,000 tonnes. In addition, the general manager expects growth on the Romanian market to slow down during the coming period, as consumers switch to healthier product categories.
In 2006, Star Foods Romania reported turnover worth 78m euros. "Last year we posted a high double-digit sales increase and hope to maintain this rate in 2008," said Yannopoulos, who did not specify the company's sales for 2007.
PepsiCo entered the Romanian salted snacks market in late 2004 after it acquired Star Foods Romania, the biggest producer on the market.
Star Foods Romania
In early 2007 rebranded its chips portfolio, launching Lay's (PepsiCo's international brand) onto the market and dropping the Star Chips brand
In the second half of 2007 acquired an automated chips production line, which boosted the production capacity of the domestic plant by 25%
In 2006 reported turnover worth 78m euros
Also targets distribution partnerships with other producers
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