Traditional brands stand test of time

SLOVAKS remain fans of products like Kofola, Horalky or Zlatý Bažant that have been around for decades. Retailers know that customers like them and pass their passion on to younger generations – marketing campaigns are made to match.

(Source: Sme)

“They are strong bands with strong backgrounds,” said Martin Katriak, the deputy CEO at Coop Jednota supermarket chain.

Consumer preferences are influenced by family customs, brand loyalty and strong media campaigns.

Slovak products accounted for 62.4 percent of the food sales during the first half of 2015, said Peter Hajnala, the marketing director at the Ministry of Agriculture. “This still does not reflect the capacities and abilities of the Slovak producers.”

According to the Slovak Agriculture and Food Chamber (SPPK), Slovakia placed 39 percent of homemade foods on the internal market in 2014. In western Europe the number is close to 80 percent.

“Even staples such as bread, eggs or dairy products are under constant pressure from cheaper foreign imports,” said Jana Holéciová of the Slovak Agricultural and Food Chamber.

Therefore the focus should be to convince the consumer about the quality of Slovak products and at the same time use the foreign investment for helping the local brands, she added.

Patriotism and retro campaign

In order to be qualified as a Slovak product, the food must contain at least 75 percent of ingredients which originate in Slovakia. Altogether 17 Slovak agricultural and food products are registered with the EU list of traditional specialities, which is low compared to the 1,255 products registered with the EU.

Slovakia registered mainly cheese and meat products, including Spišské párky (sausage) and Skalický trdelník (twisted pastry). The product must meet certain quality standards and their composition cannot be changed.

A report released by the Food Chamber of Slovakia (PKS) in December 2015 claimed that Slovak products are uncompetitive and are pushed out by cheaper foreign products. Slovakia must improve food security to reverse falling production capacity, the report reads.

“People in foreign countries prefer homemade and they might look down on Slovak products the same way many Slovaks question Polish products,” Jarmila Halgašová from the Food Chamber of Slovakia told the Hospodárske Noviny daily.

The planned trade agreement between the United States and the EU (TTIP) can also affect small Slovak producers by placing more cheap products on the market.

Meanwhile, Slovak retail chains continue to promote domestic goods.

“Slovak products represent 74 percent of the stock in our supermarkets,” Katriak confirmed.

“We in COOP Jednota focus on Slovak production as such, not only the traditional products.”

The latest campaign is called Slovensko chutí (Slovakia tastes), created in cooperation with an eponymous TV show.

“It focuses on traditional Slovak recipes from Slovak ingredients and it should show the audiences that Slovak cuisine is not only about bryndzové halušky,” Katriak said.

Marketing and foreign investment

“Slovak producers can offer sufficient supply of high quality foods but they have problems to sell them due to the competition,” said Hajnala. According to him, the key factor is the communication with the customer and marketing in order to make your product stand out among the competition.

Stable brands face fewer difficulties when trying to attract customers.

“The brands build on the dominant position at the regulated market during socialism, however, it was good marketing strategy that helped them to address current consumers,” explained Hajnala.

Brands use different techniques to attract customers, including psychological tricks. Peter N. Murray, expert on consumer psychology, said that people make decisions based on the emotions and the previous experience with the product.

Recently, the Lidl retail chain came up with an edition of 60 retro packages to bring brands to the attention of the young generation who do not remember Pepsi in a white bottle or milk in a bag. Apart from that, some products were reintroduced to the shops under the old brand names but with new ingredients.

“Retro week was part of our topical weekly offers that aim to offer our customers typical flavours of a particular country or region,” Lidl spokesman Tomáš Bezák said. “We cooperated with the suppliers as we wanted to also revive the original taste and recipe, not just the cover.”

Common European agricultural policy is oriented towards supporting small and eco-friendly producers for the period of the next 10 years.

“In case the TTIP agreement is passed, European products would not be able to compete with the American ones that are manufactured by big state companies without social or environmental restrictions,” said president of PKS Daniel Poturnay in April as cited by the TASR newswire, adding that lowering the VAT could help the particular products as it would make them more affordable. From January 2016, the new 10 percent tax on selected foods can be seen advertised in supermarkets.

“Slovak product must be manufactured in Slovakia and contain at least 75 percent of Slovak ingredients,” said Hajnala, referring to the legislative on food labelling. However, the ownership or the source of capital does not play a role.

“Most of the foreign investors continue to support and develop the Slovak brands and they are still perceived as domestic,” Hajnala said.

Jana Holéciová from the Slovak Food and Agricultural Chamber is also positive about the presence of the foreign investors.

“Capital for investment stabilised the manufacturing process of Slovak products and also improved food safety, modernised the process and infrastructure,” she said.

It can all contribute to higher demand for Slovak foods.

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