homepage_name! > Editions > Number 141 > Interview - Marko Njavro ATLANTIC

Marko Njavro, General Manager of the Strategic Business Unit Snacks, Atlantic Grupa

New Drive for Atlantic Štark - We Strive to Grow Further

Atlantic Grupa is the leader in the food and beverage industry, whose brands have rich tradition and have been part of the lives of generations of customers for many years. With a continuous focus on strengthening its business foundation, Atlantic disinvested smaller and non-core segments in order to continue strengthening and expanding its core activities, mainly in the food and beverage industry. Exactly one year ago, at the beginning of March, this was the occasion for Marko Njavro to continue the basic strategic vision and development of new business opportunities of the company, joining the management of Atlantic Štark as the new General Manager of the SBU Snacks (Atlantic Štark) and drive the future growth of this Serbian confectioner with an almost hundred-year-old tradition, using his experience and new ideas.

1. How did your career develop before you became the General Manager of Atlantic Štark and is it hard to join tradition and innovation, which you are oriented towards?

I came from the brewing industry, which is basically a mono-product industry, to a company with a good, rich, and diversified portfolio and I am glad to have decided to change my job after 15 years, as this has been a great and new challenge for me. During these 15 years in the brewery industry, I worked in different positions in different countries, of which I would highlight the position of Marketing Director in Romania and the position of Chairman of the Management Board in Bulgaria. The last position I came from was the position of Regional President at Molson Coors for the markets of Slovenia, Croatia, and Bosnia and Herzegovina. It is the third biggest company in the brewery industry worldwide and as such it is the Croatian industry leader – namely, the brewery in Zagreb, in which I started my brewery career. Atlantic Štark, on the other hand, has a tradition lasting for generations, as you said, and customers have been trusting the company for several decades. It is also characterized by additional complexity due to six different product groups, which equals dealing with six companies in one. Except of that, 40 percent of our products are placed on foreign markets and, during this difficult year behind us, every country we export to had a specific situation and specific challenging circumstances due to different measures taken against the pandemic. However, regardless of all present and future challenges, we strive to grow further and expand the gained trust and achieved satisfaction of our customers in the future, providing them with new products, new tastes and new experiences, on the new markets as well. In order to ensure a sustainable growth and the expected contribution of brands based on rich tradition, the scope of investments will be extended to people, brands and technology.

2. How did the company conduct business in the previous year, which was different from any before?

Production and operations at Štark continued without interruption. Naturally, the mode of work was adapted and employees were provided with the full protective equipment. We introduced different shifts, there were breaks between the shifts in order to comply with all epidemiological requirements, but we were working even during curfew. All others in support functions were and are still working from home. We are visiting the office only in urgent cases. Of course, this is not ideal, but it has proven to work well and for us it is an excellent guideline for future operation. What is great at Atlantic is that its IT infrastructure facing the newly emerged situation proved to be able to support the conduct of business online without any problems. Sometimes we had several hundreds of participants at our online meetings and everything was running smoothly.

3. How many of the things you envisioned when starting your job at Atlantic have you actually realized? Have at least some of your plans been realized, in spite of the whole situation?

I think we have achieved all we could in a year being an exceptional challenge for all of us. Considering all challenges we were facing with, our results are extremely solid compared to 2019. Looking at our product categories, Smoki is a star rising on all markets, as is Menaž, which has significantly contributed to business results due to trends changing as a consequence of COVID. During the last few months of 2020, chocolate bars and Sticksi also registered a growth in sales compared to the previous year, mainly due to the positive results of innovation and campaigns launched in the last quarter of last year, for example Prima Grissini or Mini Bananica. Looking at the markets, the year behind us has been the hardest on markets which were or still are struck by highly restrictive measures as a response to the pandemic, as well as markets that are highly dependent on tourist seasons. Namely, these are Serbia, Croatia, BiH, Montenegro... while growth has been achieved on the markets of Slovenia, Austria, Macedonia, and the rest of the world, i.e. RoW. We are also glad about the market launch of Smoki in Russia, which is a huge market offering great opportunities... We will continue to work on it this year as well as on the return to the former distribution on the Kosovar market, with which we resumed collaboration in the middle of last year and where we are observing a gradual improvement.

4. How will you start the new year and what are the key areas of business you plan to improve?

In accordance with the Group’s strategic priorities – to strengthen our core brands, but also to enhance our business processes – we determined the strategic priorities of SBU Snacks, as well as the key strategic projects, resulting in the new Operating Model according to which we are going to operate in the future in order to succeed in realizing our vision and envisioned objectives within the planned period. This implies an intensive preparation of new growth projects, the continuation of strengthening and enhancing our leading products chocolate and flips snacks, but also the development of the biscuit and wafer categories in an innovative manner, generally guided by the idea of enhancing the customer experience of our brands throughout the region. Furthermore, we initialized processes for a faster implementation of innovation as well as processes for a better coordination between Sales and Operations. All of this, naturally, implies investments in new technologies, so we will complete a large investment in a new chocolate line in the first half of the year, which will be followed by a new investment cycle for other categories. Based on this, we believe to have realistic plans and expectations, as well as the budget, intelligence, and passion needed for the realization of it all.

5. What do you think about the Serbian confectionery industry and which comparative advantages do our confectioners, and especially Štark have?

Looking at experiences from the EU, consolidation is a key trend during the past decade. The Serbian confectionery industry entered consolidation first, which does not only imply the arrival of internationally renowned companies on this market, but also the growth of assortment and expansion of domestic players. Therefore, companies producing sweets, at least in Serbia and Croatia, mainly represent the healthiest and most resistant part of the food industry, which is achieved by a timely finished consolidation, the disinvestment of less promising programs, and the prioritization of recognizable products. Thus, the Serbian confectionary industry is following trends side by side with the big players and can certainly take pride in the quality of its products, but also in keeping step with new technology and newest standards. Therefore, we surely do not lag behind European and global manufacturers in terms of quality, although market competition is so harsh that we need to fulfill complex standards while staying efficient and flexible in production, but also retain consumers’ trust and meet their expectations. Innovation and the coordination of production processes require more efficient management, thus, we continue the automation and digitalization of our processes in 2021, we enhance capacities and energy efficiency and invest in quality development and maintenance in order to create a dynamic environment quickly adapting to market changes and customer expectations, accompanied by a maximum optimization of all processes.

6. The competition in the confectionery industry is strong, both in Serbia and in the region. What are the strengths of Štark in the race against the competition?

As I emphasized earlier, our focus is the further development of chocolate product and flips production, the assortment innovation, mainly based on feedback from the market and own needs of further development. As a result, the complete automation of the Smoki production plant has been finished in 2019, which was an investment of around EUR 2 million, while a new chocolate line will be finished this year. Furthermore, we opened a new modern R&D laboratory two years ago, wanting to stand out, be creative, inspire innovation, and open up new perspectives for our brands. The core brands of Štark and the development of their portfolio is an obvious example of creativity leading towards new perspectives, especially with the innovation of renowned brands. We are developing new recipes and Limited Edition articles in line with the “inspired by” principle as a response to customer curiosity and the modern trend of simultaneous combination of different tastes, textures, types of products.

7. How do you adapt to customer needs and would you highlight something when it comes to the taste of sweet and salty Štark snacks?

Our business system is driven by a philosophy of innovation and continuous improvement of all processes, which implies investments in every business segment, starting from employees, production, purchase, development, market research, to communication with customers, which ultimately offers great opportunities for further progress and raising the bar. We focus on being the leader in the region when it comes to categories within which we are offering renowned brands, which serves as a good foundation for further internationalization. An example for that is Smoki being an absolute leader in the flips snack category and representing one of the company’s main pillars. The point is that, regardless of the generally ambitious approach to further development of our brands, we adapt to every market and behave infinitely rational. Today, Atlantic Grupa conducts business in all countries of the region as a domestic company and it owns some of the most popular brands in this area. It is this conglomerate of renowned brands and excellent diversification of production capacities in the region, accompanied by our own distribution system, that is the key to our success. Of course, this includes innovation and following trends, as I already mentioned.

8. Raw material procurement and its changeable price in global stock markets affect the company’s overall business plans. How do you cope with such enormous price increases and still manage to make your products affordable for consumers?

The core problem is that domestic manufacturers expect their government to introduce measures to equalize business conditions regarding existing competition, which is especially distinctive in the confectionery industry. A specific example is the former cancellation of levy for milk and the price changes for basic raw materials like flour, sugar, vegetable oils that are also highly significant for the processing industry, which means there should be adequate measures against monopolistic tendencies. Additionally, productivity may increase if the company introduces enhanced production processes, uses modern technology, improves employee skills, and harmonizes procedures. At Atlantic Grupa we are currently working on this, on the level of all business processes.

9. What are the strategic and the primary plans for the next period concerning export and do you plan on conquering new markets?

As for the geographic sales structure of Štark brands, the Serbian market is still dominant with a 60% share in the revenue, while a third of sales is accomplished on other regional markets and beyond, through the so-called ethnic sales channels. However, our focus is to strengthen our position in the region and beyond with regard to our renowned brands. An example for that is Smoki being an absolute leader and representing one of the company’s main pillars for regional development. I would like to mention that we register growth on the markets of Slovenia, Austria, Germany and Switzerland in spite of the crisis. As we all know, we had stricter measures and a more complex situation on all markets at the end of the year due to an increased number of people infected with coronavirus, resulting in great challenges. However, I can say that we completed this difficult business year in the best possible way and I hope that this year we will succeed in returning to the path of achieving new records.

10. What are the leading global trends in your industry? In which fields do you recognize the opportunity for further development and what does the process of designing new products look like?

Generally, high-quality nutrient-rich food is increasingly popular in balanced and smart eating. In the confectionary industry, this means that consumers are reading the declarations more frequently, striving towards the use of raw materials with origin, natural sweeteners, grain products made of whole grains, less trans-fatty acids... In addition, the time has come for allergy-free products without gluten, lactose and nuts causing allergic reactions. Adding vitamins to products is another current trend, especially now that the significance of vitamin D and C is emphasized for a stronger immune system and better resistance of the body.

A few years back, Atlantic Štark is working on drawing the customer focus to the composition of our products, as they pay closer attention to a healthier raw material composition of products. We have gradually replaced artificial flavors with natural ones, we use natural colors and we have replaced hydrogenated oils with non-hydrogenated vegetable oils. We also decided to develop healthier product categories: Integrino biscuits are, for example, a highly successful brand that managed to gain popularity among consumers very quickly due to its ingredients, exceptional taste, and distinctive identity. In the whole wheat biscuit segment in Serbia, it holds an enviable position. In the flips snack category Smoki has for years been among the top 10 most recognizable brands of Southeast Europe, it is made from natural ingredients such as corn flour, peanuts, vegetable oil, soy flour without any additives, flavors or flavor enhancers. One of the main benefits to contemporary consumers is transparent labeling, ingredients and product safety, which directly correlates with traceability and constant quality control of raw materials constituting the product itself. All raw materials which Štark uses in its production processes undergo a special selection through a central procurement system with the selection of suppliers who fulfill all the given parameters of quality control, as this is the company’s obligation and responsibility as well as a way to distinguish ourselves from competitors.

11. Štark is putting more effort into the development of its retail network. How many stores do you currently have in Serbia and are you going to work on further expansion?

Besides the traditional type of wholesale via distributers, Atlantic Štark is paying more and more attention to the development of its retail network (3% share in sales) by developing a direct relationship with consumers and a respectable corporate image. So far, the network consists of 13 stores in Belgrade, one in Novi Sad and one in Niš and our ambition is to further expand on the territory of Serbia through direct and franchise business types. Our idea is for the Štark stores to reflect our brands and consumers’ desires. A novelty in the SBU Snacks business is the development of a B2B sales channel. In accordance with our assortment, B2B is oriented towards the baking and dessert industry and development is currently in the initial phase.

12. Have your colleagues had a chance at all to get to know you during this period?

I hope they have, as I tried to communicate with them in an open, clear and honest manner, regardless of whether I was contacting them directly, whenever this was possible, or via written communication. It was certainly not what I expected in the beginning, but we adapted to the situation and I am generally satisfied with what we have achieved as a team.

13. During the past months, employees have been worried about their own health and health of their loved ones, but also about their jobs. They are now closely looking at people like you. Are true leaders actually recognized in such crisis situations?

It is very important for employees to have personal contact with their managers. Whenever I can, I try to visit the production plant, which is now the most sensitive part of our organization. The people here were working all this time under specific, not to say abnormal conditions, wearing protective equipment and masks and undergoing a number of checks every day in order to implement all protection measures. I think it is important for them to see their superiors and exchange a few words, receive support and understanding for the effort they invest. As a company, we are especially committed to psychological and material support programs for employees, as earthquakes came along on top of the pandemic, and it is most important that employees are aware that the company supports them. Thus, one of the basic corporate values of Atlantic Grupa is – care. We care for each other, take care of our colleague’s well-being, cultivate business relationships, and care about the world we are leaving behind for future generations.