CANDY PARADE: Though the tastiest sweets are still handmade, high volume production gets the product out to a global market.
KLAIPEDA - Are you fretting over your nerve-racking joblessness and lingering uncertainty? Does your family nest cause you more headache than joy? Just don’t let it all gnaw at you – scoop up a few cents and go out and buy a chocolate bar to soothe that sweet tooth and nerves. Remember, psychologists touting chocolate’s soothing abilities, and nutritionists raving over its nutritional value, may be right, so go for it!
If while putting chocolate into your grocery cart, you never gave a thought to its country of origin, it may be worth having a glimpse at the label – it may be coming from as far away as China or Brazil. According to the statistics, as many as 31 countries brought in chocolate and its products to Lithuania last year, imports amounting to slightly over 187 million litas (53 million euros). This was a significant increase from the previous year, at 160 million litas, however, this was slightly less compared to the 194 million litas sold at the economy’s peak, in 2008. The geography of chocolate and its products’ import go as far as China, Brazil, Greece and Argentina, while the list, in import scope, is topped by Germany, with Belgium as a runner-up, and Ukraine third.
However, Lithuanian chocolate and its products’ export is more considerable – it reached 42 countries last year, amounting to 207 million litas in sales in 2010, up from 186 million litas in 2009, and nearly reaching the pre-crisis level of 211 million litas, in 2008. The bulk of the export went to six countries: Estonia, Latvia, Poland, France, Norway and Belgium.
Although exports and domestic consumption are slowly rising, some industry insiders admonish that, in the chase for larger sales, commodity quality is often pushed away, particularly in the domestic market.
Saulius, a seasoned confectioner who agreed to speak about the business without revealing his surname, works for a confectionary shop in Panevezys, a town in the north. During his full-time shift he leads his five-worker team, laboriously preparing cakes and biscuits largely for Maxima confectionary departments. On his down-time, adding to his 1,200 litas salary, he makes elaborate cakes for weddings, birthdays and other festive occasions at home.
The 52-year-old man remembers wistfully the Soviet times, when he worked for well-known restaurants in Vilnius. “One can curse those days, but confectionary, back then, undoubtedly, was sky-flying – very elaborate, sophisticated and, most importantly, producing very high quality confectionary items. If I used butter then, it was butter, not some watery margarine; if I needed milk, I poured in the dough cow’s fat milk, not some milk powder, like nowadays. If I had to add some taste to a cake, I would use forest berries and jams, not taste-enhancing additives, which I use lavishly today,” the man acknowledged.
Saulius notes that now, customers pay attention only to a cake’s price and longevity, ignoring quality, sometimes quite undeliberately. “Many people reason this way: well, we live in the European Union, therefore, product quality is guaranteed. Or some contemplate it this way: well, the longer the validity, the better the quality. During the Soviet times, a cake’s expiration date was fixed in two or three days from its production date. Nowadays, when Lithuania joined the EU, a cake’s validity date is extended for six months. How on earth could a cake last so long if it was made from natural products? It can only do so in one case – it’s being filled with preservatives,” the confectioner related.
He admitted that, before the crisis, his confectionary shop as well as others in town would use much more natural products. However, with the crisis gnawing at buyers’ purchasing power, all confectionary manufacturers, trying to stay afloat, slashed the prices of their products, searching for cheap replacements for natural ingredients. Thus, the goal of decreasing the internal costs by any means possible was achieved - milk was replaced by milk powder, margarine changed from butter and artificial sweeteners replaced berries and jams.
“Those who, throughout the crisis, continued making cakes using natural butter have gone bankrupt. I have counted: if a confectionary manufacturer’s price is not three or four times larger than its cost, the enterprise is doomed to go out of business,” the Panevezys confectioner maintains.
Being well aware of the back stage of the craft, he says he never buys cakes in large supermarket chain stores. “And I warn my children not to do that. When I have a customer ordering a cake at my home, I always ask him straight: ‘Do you want a cheaper cake, made from artificial products, or the same cake 20-litas more expensive, but made from natural products?’ Upon hearing the question, most people get awkwardly puzzled, but, as a rule, choose the latter option. Which parent on earth can save on his son’s or daughter’s health by ordering an additive-laden cake?” the cake-maker fumed.
He maintains that he himself, in large supermarket chain stores, finds it very confusing to choose the right item. “Before, our parents and grandparents had very little choice in the Soviet stores, but they knew if they happened to find a Griliazinis cake, Pauksciu pienas (Birds’ milk) cake or Medaus (Honey) cake, it would be the yummiest thing, worth its price. Nowadays, people, instead of heeding the ingredients and the country of origin, rather give into a cake’s pompous name or its lavish decorations. However, in my private practice, I still receive many orders for the old excellent-quality Soviet-era cakes. It really heartens me,” the confectioner confessed.
The four largest players in the Lithuanian sweets market include Kraft Jacobs Suchard Lithuania, Vilniaus Pergale, Naujoji Ruta, and Ruta ends the list of the largest sweets turnovers in the country.
Kraft Jacobs Suchard Lithuania is a subsidiary of the internationally-known company Kraft Foods International that prides itself on its 21 brands. The company’s Kraft Jacobs Suchard Lithuania produces not only trendy Karuna chocolate, Jazz, Manija and Tiko chocolate bars, but also Jacobs coffee and Estrella potato chips. Kraft Jacobs Suchard Lithuania did not return The Baltic Times’ calls and did not answer e-mails seeking information on the company.
Algirdas Gluodas, director of Ruta, the fourth largest sweets-maker in the country, made up for his rival’s unwillingness, plunging into melancholic remarks in the beginning of our conversation: “The French say that a sweet is being created by the hands, heart and brains. Largely, cacao and chocolate are the same all over the world, nevertheless, how many different tastes chocolatiers obtain!”
Ruta deservedly prides itself on its long-cherished traditions of sweets making, counting its history from 1911. It was when local entrepreneurs, having attached on a hut a plank with the inscription Ruta, which means rue in Lithuanian, hired several clumsy sweets makers to make shapeless lollipops and bon-bons.
“We still foster the pre-war sweets-making traditions, particularly in designing the wrappings,” Gluodas says. Today, in its seven production plants, Ruta produces sweets of over 300-plus-something names, and employs some 230 workers.
The undertaking’s technological achievements have been noticed in numerous exhibitions, where Ruta has received many of the highest awards. The joint stock venture makes 1,500 tons of the production yearly, exporting approximately 20 percent of it. “We send our sweets to Germany and Estonia mostly, slightly less to Russia, Latvia and Poland. We even cater to lovers of our production in the United Kingdom, Ireland and the United States, however, the export numbers to these countries are rather symbolic,” notes the Ruta director.
“Alas, the domestic market is still shrunk, and purchasing power is considerably decreased, as most people look for cheaper products. Sweets are not an exception in that sense. Therefore, facing the crisis, we had two options – either to look for cheaper ingredients and slash our product prices, catering mostly to the needs of the local market; or maintain the high quality by using excellent quality Belgian Belcolade cacao products, and focus largely on export markets. We opted for the latter. However, to conquer the chocolate-conservative Western markets is very hard. I would go even further – it is impossible, as French, Italians, Belgians and Swiss have century-long chocolate-manufacturing and consuming traditions. People there are real patriots of their domestic chocolate brands,” Gluodas acknowledged.
He is convinced that a self-respecting Westerner hardly is going to give in to the lure of a foreign chocolate brand. “For example, in every French town there is a local chocolate shop, Chocolaterie, and local chocolatiers, making local gourmand chocolate sweets. In order to muscle into the market, we would need millions of litas of investments, which we cannot afford. Only large international companies can do that,” the director asserted.
He admonishes that an excellent-quality item and reliable marketing do not guarantee its success. A couple of years ago, the manufacturer sent its trial production to Japan, expecting excellent comments, and possibly a contract. However, Ruta had to deal with a severe blow from the Japanese. “In our production, we use iodized salt, which is valued by most Europeans. However, Japanese get [iodine] from natural sources, such as seafoods and plants. Therefore, the Japanese politely refused our products,” the director remembered.
He also emphasizes the strict norms controlling chocolate quality in Western countries. “For example, in Switzerland, Belgium or France, no sweets item can be labeled as chocolate if it contains any other fats but cacao butter,” Gluodas says.
Despite the setbacks, Ruta slowly but assuredly opens up the doors of the capricious Westerners. “In seeking foreign partners, I am not particularly keen on the numerous exhibitions and shows. For me, it is all about personal contacts,” Gluodas admits. He recalled a recent visit by a German, who is owner of a well-established confectionary enterprise in Germany. “My acquaintances treated him with Ruta sweets, and he loved them. So he got in touch with us and we started collaborating,” the director relates. He emphasizes that foreigners are interested in the enterprise’s ecological products mostly. “We are the first sweets-producing enterprise in the country to make ecological items,” Gluodas says proudly.
Having experienced a 15-20 percent slump in the crisis years, the company is slowly recovering, seeing steady growth for the last two years. While numerous sweets producers, desperately trying to cling on, sacrificed quality for a lower price, Ruta stuck with its strict quality standards and natural products. “Our experience stands for natural ingredients for many years. Over a decade ago, we had a painful lesson - giving in to the trend of replacing more costly ingredients with cheaper ones; we switched from cacao butter to palm oil and other vegetable fats. As we just did it on our own, Air France had expressed its intention to buy our chocolate sweets, however, they demanded them to have cacao butter. We lost a fat contract then, but we had a good lesson for years to come,” the entrepreneur revealed. Even during the peak of the crisis, the manufacturer remained faithful to its long-lived tradition – natural ingredients are essential.
JSC Meskenas, in Kaunas, has been producing mainly fillings and glazes for cream products for 15 years. Only recently did the enterprise start making mini-chocolate bars. “We usually see seasonal fluctuations in our glaze and fillings sales; therefore, we started looking for a niche in the relevant chocolate market. Realizing it is filled up, we came up with the idea of producing 5-gram Napolitano chocolate bars, made according to an Italian recipe. No one else takes on this size chocolate bar production in the Baltics. It has received very good comments from our partners not only in Latvia and Estonia, but also in Western countries. Its manufacturing is a considerable boost to our main business,” Jurate Kirdeikiene, the Meskenas commercial director, admitted.
Oh, yes, the enterprise has not cut back its costs with natural product replacements. “In the long run, with purchasing power growing, only excellent quality products will be in demand,” says a convinced Kirdeikiene.