titel
Promoting competitiveness in the agro-food industry
Ljubljana 5.-6.6.08; BM, Dr. Stephan Meier _ Bäckermeisterei )
Ref. Ares(2014)78179 - 15/01/2014

Statement
Challenges facing mid-market food executives have never been so high.
Changes in technology, consumer tastes and competition make the business more difficult than ever. But with great challenges come great opportunities as well.
In the early-1970s, German economist E.F. Schumacher wrote his book
„ Small is beautiful: Economies as if People Mattered .“ His vision consisted in small, location-specific, businesses that would foster a close relationship between their employees and their customers. Appropriate technology would be used to facilitate these relationships. As it turned out, Schumacher was pretty wrong in his timing, but he may have been way ahead this time
Promoting competitiveness in the agro-food industry
Ljubljana 5.-6.6.08; BM, Dr. Stephan Meier _ Bäckermeisterei )

Agenda
• Our Market / Our Company
• Competitive Success Factors
- Unique Selling Proposition
- Value Chain
- Marketing
- Organization
• Lessons learned / Recommendations
Promoting competitiveness in the agro-food industry
Ljubljana 5.-6.6.08; BM, Dr. Stephan Meier _ Bäckermeisterei )

A
Promoting competitiveness in the agro-food industry
Ljubljana 5.-6.6.08; BM, Dr. Stephan Meier _ Bäckermeisterei )

After more than 200 years of family owned bakery tradition in the south of Munich …
Geographic Setting
München
Großhadern
Solln II
Solln
Promoting competitiveness in the agro-food industry
Ljubljana 5.-6.6.08; BM, Dr. Stephan Meier _ Bäckermeisterei )
Weilheim

… is today mainly driven by an ambitious growth path since
2005!
Evolution
133
+ 3
61
# employees +2
+3
+2
15 outlets +2
6
200 200
31.12.2004 1.1.2005
7
1.6.2008
2008
6
With 15 outlets today, we plan to continue growing by 25% in sales every year
Promoting competitiveness in the agro-food industry
Ljubljana 5.-6.6.08; BM, Dr. Stephan Meier _ Bäckermeisterei )

A
Promoting competitiveness in the agro-food industry
Ljubljana 5.-6.6.08; BM, Dr. Stephan Meier _ Bäckermeisterei )

The Bakery business represents an important economic factor in
Germany
Germany Bavaria
16.741 Bakeries
274.000 Employees
11,9 billon € Turnover
3.400 Bakeries
47.540 Employees
2,3 billion € Turnover
Industrially produced packaged bakery products conquered already
60% market share
Promoting competitiveness in the agro-food industry
Ljubljana 5.-6.6.08; BM, Dr. Stephan Meier _ Bäckermeisterei )
Landesinnungsverband des bayerischen Bäckerhandwerks

…but struggles in the midst of a major market consolidation process!
Bavaria
12.000
10.923 10.805
10.000
8.668
8.000
6.000
4.000
6.027
4.850
3.981
3.400
2.000
0
1950 1960 1970 1980 1990 2000 2006 number of bakeries
There is a 70% decrease in company numbers since 1950
Promoting competitiveness in the agro-food industry
Ljubljana 5.-6.6.08; BM, Dr. Stephan Meier _ Bäckermeisterei )
Landesinnungsverband des bayerischen Bäckerhandwerks
I rn ye Ba

Our own development proves the dramatic changes …
Evolution by company size from 1950 to 2006 in Bavaria
14
12
10
12,6
13,9
8,4
8
6
4
3,7 4,1
4,6
6,9
2
0
1950 1960 1970 1980 1990 2000 2006 number of employees
II rn ye Ba
During the last 25 years company size by employees doubled to 14
Promoting competitiveness in the agro-food industry
Ljubljana 5.-6.6.08; BM, Dr. Stephan Meier _ Bäckermeisterei )
Landesinnungsverband des bayerischen Bäckerhandwerks

Far reaching structural changes are lying ahead
2008 compared to 2020
Today
• Consumption decreases approx. ø 80 kg per capita
• Market share shifts
Retail/Groceries, Aldi & Co.: 55%
Small Bakeries < 5 Mio.Euro turnover:
25%
Big Bakeries > 5 Mio.Euro (> 30 outlets):
15%
• Product range bakeries rises
ø 70 different products per day
• approx. ø 60 kg per capita
Tomorrow
• Retail/Groceries, Aldi & Co.: 65%
• Small Bakeries < 5 Mio.Euro turnover : 10%
• Big Bakeries > 5 Mio.Euro (> 30 outlets):
20%
• ø 100 different products per day
• Bakeries disapear
3.400
companies in Bavaria
16.700
in Germany
• only 1.000
bakeries are left in Bavaria. and 12.000
remain for all Germany
Promoting competitiveness in the agro-food industry
Ljubljana 5.-6.6.08; BM, Dr. Stephan Meier _ Bäckermeisterei )
Landesinnungsverband des bayerischen Bäckerhandwerks

Consistent definition and realization of a unique market positioning are the major management task for the future
Premium segment
Market positioning
•
Incomparable, high quality products
• in cozy atmosphere combined with cared for by
• well-trained service personal and inspiring ideas concerning product range as well as
• health oriented nutrition!
Vision
„stuck in the middle“
• Ambiguous positioning tends to result in inconsistent signals towards customers and long-term decrease of market share and profits
Discounters
• Cost leadership for a small product range;
• Price as unique USP;
• international competition and
• low customer loyalty
Promoting competitiveness in the agro-food industry
Ljubljana 5.-6.6.08; BM, Dr. Stephan Meier _ Bäckermeisterei )

A
Unique Positioning
Promoting competitiveness in the agro-food industry
Ljubljana 5.-6.6.08; BM, Dr. Stephan Meier _ Bäckermeisterei )

We work hard to establish a unique positioning in our markets
ü Recognizable premium artisan product quality
ü
We fabricate all our products without pre-mixes and convenience ingredients; we garantee our customers a 100%-in-house production
ü Local production within 100 km ensures product quality and high control level of service quality and product presentation in subsidiaries
(Each outlet is delivered at least twice a day)
ü Creation of high consumer awareness concerning our high local focus
(ingredients (80 %/80 km) and human resources)
ü No franchising, No Shop-in-Shop but Stand-Alone-Outlets to insure direct influence
ü Organic product range since 1982 sustainable management and strong focus on
ü
Special ovens in the outlets for t0p five-products to celebrate freshness
ü
Modern premium shop fitting with huge LCD-displays and coffee-shop
ü
Night of the B
ä ckermeisterei, Breakfast-Home-Delivery etc.
ü etc.
Promoting competitiveness in the agro-food industry
Ljubljana 5.-6.6.08; BM, Dr. Stephan Meier _ Bäckermeisterei )

A
Value Chain
Promoting competitiveness in the agro-food industry
Ljubljana 5.-6.6.08; BM, Dr. Stephan Meier _ Bäckermeisterei )

Our almost “fully integrated value chain” helps us to maintain competitive advantages
Value Chain
Consumers
We realize 90 % of sales in our own outlets
Retailers
All products we are selling are fabricated in our bakery
We are active partners of our flour mill
We are negotiating long-term contracts with all suppliers and collaborate intensively
We have a strong influence on types of grains and cultivation
Bakery
Flour Mill
Farmers Other ingredients
Seeds
Promoting competitiveness in the agro-food industry
Ljubljana 5.-6.6.08; BM, Dr. Stephan Meier _ Bäckermeisterei )

A
Marketing
Promoting competitiveness in the agro-food industry
Ljubljana 5.-6.6.08; BM, Dr. Stephan Meier _ Bäckermeisterei )

Our marketing mix is mainly focused on the product dimension
Marketing
ü We offer a wide range of changing products of at least 140 items daily
ü Each product has a special company specific name, a non standard form and many are branded, some are even patented
ü By strictly avoiding similarities to competitors products, we try to be beyond price competition
ü As a specialty shop we offer the whole range from local traditional products to French pastries as well as to-go snacks
ü No discounts
Promoting competitiveness in the agro-food industry
Ljubljana 5.-6.6.08; BM, Dr. Stephan Meier _ Bäckermeisterei )

A
Organization
Promoting competitiveness in the agro-food industry
Ljubljana 5.-6.6.08; BM, Dr. Stephan Meier _ Bäckermeisterei )

Strategic management-concepts insure efficient structures and processes for a successful future
Strategy
Organization
Change Management
– Unique selling propositions
– International expansion
– Structures (organigram)
– Process (e.g. quality control, logistics, best-cases etc.)
– Communication (e.g. meetings, etc.)
– Management of expansion
– Human Resources (e.g. career service, trainings etc.)
– Change process (coaching, management by objectives, etc.)
• Corporate Management
Promoting competitiveness in the agro-food industry
Ljubljana 5.-6.6.08; BM, Dr. Stephan Meier _ Bäckermeisterei )

Promoting competitiveness in the agro-food industry
Ljubljana 5.-6.6.08; BM, Dr. Stephan Meier _ Bäckermeisterei )

All global challenges can be tackled by local answers… global challenges local answers
• Global competitors (frozen products, low transportation and labor costs)
• Incomparable, high quality products; Adapting to local micro-cultures in a way that enables us to get closer to our customers both physically and emotionally
• Stand alone-outlets in best possible locations, authentic corporate identity
• National and international labor market (East Germany, Japan, France,
China)
• Subprimes crises complicates acquisition of credit capital and slows down growth
• Huge bundle of incentives to attract standard workers as well as high potentials (career service, accommodation, etc.) Manpower shortage main obstacle to growth
• High equity level, long-term relation with principal bank, professional management
• Pricees of ingredients explode (emerging markets, suppliers abuse their market power poor harvest, bioethanol-industry and their subsidies)
• Rise of energy and waste management costs
• Long-term relations with suppliers, professional sourcing department
• Reduce costs by optimizing goods and materials employed, market observation
Promoting competitiveness in the agro-food industry
Ljubljana 5.-6.6.08; BM, Dr. Stephan Meier _ Bäckermeisterei )
At random order

… but are accompanied by trends which need to be watched closely, to prosper tomorrow!
"discount" bakery locations have emerged as strong competitors to the artisan shops and now account for more than one-third of total sales. the price of artisanshop bread averages approximately
3 euros, while bread at the
Organic products mean discounter sells for 1.30
euros on average
(CMA). enjoyment and quality of life.
… They stand for the combination of top quality and carefree consumption
Health and Sustainability are cornerstones of the lifestyle trends of the same name.
Healthy nutrition with local focus..
Today it seems that everyone is a food retailer .
Convenience stores are expanding their food offerings, e.g. petrol stations, drugstores …
The differences in product and shopping preferences between young and old, rich and poor, married and single etc. are becoming greater.
These consumers are looking for products and services that are authentic and unique to their communities . This growing diversity pushes differenciation even more.
Convenience food becomes even more popular.
Even in the organic segment
Consumer preferences as well as for To-Gorange, coffee, dough, etc.
for differentiated and healthy products enhance the opportunity to exploit economies of scope
Promoting competitiveness in the agro-food industry
Ljubljana 5.-6.6.08; BM, Dr. Stephan Meier _ Bäckermeisterei )
…
Low population growth is a major threat, the demand curve for classic bakery products is shifting downwards
…

Thanks for your attention!
Questions are wellcome !
Promoting competitiveness in the agro-food industry
Ljubljana 5.-6.6.08; BM, Dr. Stephan Meier _ Bäckermeisterei )
Bäckermeister, Dr.
Stephan Meier
Emslanderstr. 2
82319 Starnberg
Fon: 08151-972300
Fax: 08151-9723029 sjm@baeckermeisterei.de