Estonian ice cream to melt down Finnish market

  • 2005-04-20
  • From wire reports
TALLINN - Following in the footsteps of the dairy brethren, Estonian ice cream producers are eyeing the Finnish market in hopes of winning a significant market share in the next few years.

The daily Eesti Paevaleht reported this week that Tallinna Kulmhoone and Balbiino, two of the country's largest ice cream producers, together want to conquer a 5 's 7 percent share of the 250 million euro ice cream market in Finland.

Margus Puust, chairman of AS Tallinna Kulmhoone (Tallinn Refrigerated Products), said the company was targeting a 1 percent market share this year and 3 's 5 percent in the northern neighbor in four 's five years.

"The plans are relatively modest and realistic," he said, adding that the company had been exporting ice cream to Finland since last May. "So far, we're satisfied."

Puust said the short distance to Finland and the constant flow of tourists from that country had made Estonian brands well known. He added that so far there has been no negative feedback from the Finnish market.

Riho Niils, CEO of Balbiino, said the company was to start exporting to Finland in the near future. Its first test batches have already been sent. In the meantime, Balbiino is partaking in talks on exporting its products to Sweden, though Niils said the company wouldn't venture into two new markets at the same time.

"Right now we're negotiating the Swedish market. Sweden, just like Finland, is a very large and attractive market for us," he said.

Finns eat twice as much ice cream per resident as Estonians, according to industry insiders. With an estimated 270 million kroons (17 million euros) in annual sales, the Estonian market is 15 times smaller.

Still, if milk is any measuring stick, the path to the Finnish market is fraught with difficulties. In recent weeks Finnish milk producers have lobbied against cheap Estonian milk, going so far as to claim it is inferior in quality, a charge that Estonian dairy companies hotly deny.

Balbiino and Tallinna Kulmhoone are both active on the Latvian and Lithuanian markets. Balbiino has a market share of about 10 percent in Latvia and 2 percent in Lithuania.

Tallinna Kulmhoone estimates that its market share in Latvia and Lithuania is 10-12 percent and 24-30 percent respectively.