Interview with Andrzej Odzioba - President of WOSANA
Andrzej Odzioba, President of WOSANA, talks to us about how the preferences of beverage consumers have changed recently and about the challenges the producers are faced with nowadays.
How have the recent COVID months affected the market?
The pandemic, especially in its first phase, caused major changes in consumer behaviour. It resulted in a significant decrease in the frequency of shopping, with a simultaneous increase in the value of the shopping cart. In short, we started shopping less often, but we bought more at one time. Due to the lockdown, and thus the lack of activity outside, customers were much less willing to buy "on the go" products, i.e. those in packages smaller than 1 litre. Instead, they chose large family packs for home consumption.
What was the company's response to these changes?
The decision-making process in our company is very fast, which gives us a significant advantage over our competitors. As a result, we are able to react efficiently and respond to the current trends on the market, and the needs of consumers and retailers.
In response to these changes in preferences, we have significantly increased the production of larger packages. An example may be the 3-litre Wosana juice, much more often chosen by customers during the lockdown. At the moment, thanks to the gradual reduction of restrictions, the situation is slowly returning to normal. With the return to daily activities and typical consumer habits, smaller formats are selling better again.
Which product segments are of key importance for you at the moment?
We are observing a large increase in the sale of juices. These types of beverages usually sold best in the spring and autumn, but this year, sales remain high also in the summer season. This applies primarily to orange juice, rich in vitamin C, which, in the opinion of many consumers, improves the body's immunity. Therefore, the lines of juices produced under the Wosana brand are now of great importance. We are developing the distribution system for them and expanding the offer, for example by adding new packaging formats - from the smallest 0.2-litre ones to large, family, even 3-litre packs. We are also introducing new flavours and blends. This is the basis of our business. Another important segment is our mineral water brand, "Mom and Me” (“Mama i ja"), for which we are also significantly expanding the product line and market availability.
How are you working on these innovations?
The R&D department is more and more important in our business. Recently, we have significantly increased our competences in this area. We have our own, ultra-modern and fully equipped laboratory. We strongly support our clients in this area, helping them to create their own innovative products. We try to define the needs of consumers together and look for best new solutions for the brands of our contractors. This applies to two areas - both the product itself, i.e. recipes, textures, etc., and packaging. Last year, we invested in one of the most modern processes of preparing beverages and a very efficient production line (asepsis) in Poland. Therefore, we are prepared to produce the most complex and technologically advanced products.
In which way is the work on the development of packaging progressing?
This way is largely imposed by the EU directives, mainly SUP (Single Use Plastics) one. In this case, the work mainly focuses on working out the ‘weight loss’ bottles, i.e. producing lighter packaging, as well as bottles with rPET content, which comes from recycled materials. It is true that the changes planned by the European Union are scheduled for several years (by 2030 all bottles will have to contain at least 30% of a recycled material), but already today many companies with whom we cooperate want to use eco-bottles and packaging , even if for image reasons. We have already introduced several products to the market in packages containing 50 percent of rPET.
Are these EU plans a significant challenge for the industry?
One of the SUP directives imposes from 3 July 2024 an obligation on producers to permanently bind the closure of the bottle (its cap) to the bottle itself. The fulfillment of this obligation involves quite a serious interference in the production lines.
Another area is the so-called EPR ( Extended Producer Responsibility). It is the responsibility involving the process of recovering disposable packaging from the market and recycling it. We are convinced that plastic should never end up in the environment, therefore we will be involved in all consumer education initiatives and processes aimed at increasing the level of bottle recovery and big-scale recycling.
The goals that the European Union sets for all member states are very ambitious. By 2025, we, as a country, must achieve a recycling rate at the level of 77 % , and by 2029 at the level of 90 %! Such a task is a huge challenge for the entire industry, and even more - for the entire supply chain, including retail chains. That is why, for several months now, various meetings and workshops have been held to develop the best system for collecting PET bottles and their recycling in Europe.
In the coming years, besides plastic, sugar will also be watched closely. How will the beverage industry respond to this?
Yes, it's a big challenge. The sugar tax will most likely be introduced on 1 January 2021. This will require significant changes to the recipes of many products, in which the sugar content will have to be significantly reduced, so that, in accordance with the provisions of the act, the impact of the tax on the final price of the product be minimized. A special project team has been established in our company to analyze the composition of all our products and define various alternative ways to adapt product formulas to the new act.
In the case of brands owned by our clients, the close cooperation between R&D departments in this area has also been initiated.
What are the new market segments worth entering in the near future?
We are carefully observing and analyzing the current market trends. Here, the development of products that fit in the broadly understood health & wellness trend is particularly important. Wosana will become more and more in line with this trend. For example, we have recently launched the production of functional fruit smoothies under a new brand, Fruits. We are also analyzing the so-called purchasing missions and consumption moments. We can see that there is a growing demand on the market for typical breakfast products for immediate consumption. The most common are liquid snacks from the group of the so-called ‘Plant base’, that is, for example, non-dairy ‘milk’ drinks. These include, for example, oat, almond, rice milk etc. We are already working with our clients on the suitable offer in this category, although we already have a ready product which combines plant base drinks with fruit and functional additives.
What is company’s current foreign expansion like?
First of all, we are developing cooperation with retail chains present on the Polish market, which also have their stores outside of the country. As part of our international contracts, we deliver products to chain stores in several countries of Central and Eastern Europe. We are very present in the Baltic States cooperating with local distributors. Currently, we have a lot of inquiries from the German market, whose clients are mostly interested in pure juices and juice-based drinks. In general, although we focus more on Central and Eastern Europe, we are also developing one project outside of Europe, which is already at a very advanced stage. It will concern selling products for children in one of the leading retail chains in the United States.