homepage_name! > Editions > Number 129 > Interview - Mate Stetic ATLANTIC

Mate Štetić, General Manager of the Strategic Business Unit Coffee in Atlantic Grupa

Innovative thinking as a key competitiveness factor

Atlantic Grupa affirmed its leadership position in the region with its last year’s results, and its biggest investment focus in the previous year was placed on technological innovation in production, as well as market development. In accordance with its strategic commitment, the company invested in new production plants, lines, and equipment, which, in addition to increasing operational efficiency, has led to the creation of new jobs. Strategic Business Unit Coffee is still highlighted as the largest individual category and represents a significant pillar of the company’s successful business operations. As the largest coffee manufacturer in the region, we strive to retain and strengthen our position on all markets and to regularly improve our portfolio. In accordance with current trends, we will continue to rejuvenate and modernize the category of freshly ground coffee, with a special emphasis on boosting consumption out of home. Our products have already found a way to our consumers’ hearts and their cups, and we will certainly continue to cherish their trust, noted Mate Štetić, General Manager of the Strategic Business Unit Coffee in Atlantic Grupa.

1.What was your career path before you became the General Manager of the SBU Coffee in Atlantic Grupa?

I started my career more than 18 years ago at the company Ledo in Zagreb, where I gained much needed experience working with large production systems in the food industry. This great experience provided me with the opportunity to be the Director of Marketing and Development in the company Zvijezda. After that, while looking for new challenges, I spent a year as the President of the Mlinar Bakery Management Board, after which I joined the company that marked the current course of my career Pik Vrbovec. Working together with my team, we achieved tremendous results that Atlantic Grupa recognized as a recommendation for taking over the position of General Manager of the SBU Coffee. I have used every professional opportunity for self-improvement in my work, and after so many years of experience, I came to the conclusion that the key to success is personal development, seeing things from new angles and constantly raising the bar of personal and professional goals. It is equally important to build trust among team members you work with and cultivate common values. Atlantic Grupa is a company where I can find opportunities for improvement in every sense of the word, both in terms of professional advancement and setting some new goals that I want to reach, and improving the company’s business operations, since it’s open to innovation and is a leader in the region for a reason.

2.Last year’s results reaffirmed the respectable position of Atlantic Grupa in the region. How will you start the new year and what are the key areas of business in which you plan to improve?

As in the previous years, Atlantic Grupa also successfully rose to the challenges in 2019, achieving remarkable results and planned growth, so I can safely say that another good year is behind us. By achieving sales revenue of EUR 110.3 million in the first nine months, the Strategic Business Unit Coffee (SBU Coffee) comprised 20.4% of the total company revenues, and it stands out as the largest individual category. By the end of the year, we have fulfilled the plans and achieved record results and growth in key segments on most markets, which is in line with the objectives of the overall business strategy. Our leading brands are Barcaffè, Grand kafa, and Bonito, and analyzed by categories, the most prevalent was the freshly ground coffee category, followed by espresso and instant coffee, and Black’n’Easy, which has been achieving continuous growth year after year. The import and placing on the market of more than 23,000 tonnes of coffee per year has made us the dominant leader in the region for years.

In 2019, capital investments of EUR 4 million were focused on technological innovations in production and market development. As a part of the strategic commitment to growing categories, in 2019 the company invested in new production facilities, lines, and equipment, which, in addition to increasing operational efficiency, has led to the creation of new jobs.

So, we are investing in our further development, brands and people, so that we can implement our numerous creative ideas and plans. We always emphasize that innovative thinking is the key competitiveness factor not only when it comes to brands. Sometimes, such a way of thinking should be applied to processes within the company, and that is what Atlantic Grupa did the previous year in order to be able to respond to new challenges. I believe that our well-coordinated and empowered team can certainly contribute to the realization of plans and new ideas, because we are always looking for new possibilities, and all our results are derived from exchanging experiences and an open way of thinking.

We expect to be able to successfully rise to all challenges that await us in 2020, because we have determined the priorities for the next five years and identified key areas that are the foundation of future transformation. In general, Atlantic Grupa is focused on further development of main brands and targeted internationalization aimed at brands that have already proven their international potential, followed by further distribution development as important levers of business growth, and possible new mergers and acquisitions.

3.How do you adapt to global changes on the market, and how do you respond to local consumer needs across the region?

Being aware of the fact that Turkish coffee still holds the top spot in this region, and after a successful innovation that was Black’n’Easy, traditional coffee which is made in a minute, in 2019 we have enriched our portfolio with a new product – Black’n’Easy Milk. In addition, super-premium blend Barcaffè Divino Single Origin India joined the Barcaffè Espresso family, and Barcaffè Espresso launched three new products – Barcaffè Esperto, Classico, and Cremoso for retail sale. Following global trends of consumption, we have entered a new market category of cold coffee with the brand Barcaffè Lattiato and the following three flavors: Irish Cream, Vanilla, and Toffee Caramel, which met the expectations and were well received on most regional markets. So, that is the shortest answer to your question: we are introducing innovations, trying not only to respond to the needs of consumers, but also to predict them, we strive not only to follow, but also to dictate trends.

For example, as the market leader in the category of freshly ground coffee on the markets in Slovenia, Serbia, Bosnia and Herzegovina, and Macedonia, we were aware that although still the predominant one, this traditional category has a falling trend in the long run. So, with the idea of “"rejuvenating” the entire category, we launched a regional communication campaign last year called That’s Coffee with the desire to bring freshly ground coffee closer to younger generations. As part of the campaign, we offered our consumers a whole new intense coffee experience by creating Freshness Corners on the markets in Croatia, Slovenia and Serbia. We modernized the category by redesigning the entire Grand kafa portfolio, and the portfolio was enriched with new products, Grand kafa Strong and Barcaffè Single Plantation.

In the second half of the year, Barcaffè D.O.T. capsules were rebranded and marketed under the new name Barcaffè Perfetto. In addition, the portfolio was enriched with capsules compatible with Nespresso machines.

In line with the new trends of consumption, we are vigorously developing Barcaffè&Go, a modern and popular concept that provides freedom of movement along with the excellent quality of Barcaffè espresso. During 2019, a 5% volume increase was reached, resulting in a remarkable 13 million beverages sold in the region, which was achieved through Barcaffè&Go and partner sales concepts.

4.Grand kafa has been synonymous with quality in this region for many years. What affects the quality of coffee and what do you pay special attention on in the production process?

Generally speaking, geographical origin and weather conditions affect the quality of raw coffee the most, and when we talk about the end product, the way coffee is roasted and its freshness are what make its recognizable quality. By modernizing our production processes, using the highest quality coffee beans, which we choose in a larger part by origin, on selected plantations, after maximum transport control, and quality control in the production process, we strive to get that recognizable aroma and taste of freshly roasted and ground coffee and to preserve that same freshness on the shelf. This requires great investments but provides quality, which our consumers have been recognizing for decades. What I want to point out is that today our production process is fully robotized, and that our engineers and technologists designed some of the robots themselves according to our needs. The technology is one side of the story, and the other is that coffee has more aromatic compounds than wine, and it is precisely that gustatory experience and the diversity of taste, which depends on the origin and varieties, that gives it a special appeal based on personal affinities. This is what we wanted to particularly emphasize last year by introducing products with the designated place of origin, because we were aware that coffee is increasingly becoming a so-called commodity product such as sugar or oil, and we wanted to do the exact opposite, to provide consumers with high-quality beans with designated origin and the possibility to choose according to personal preferences.

5.In your portfolio you have a wide assortment of products that are adapted to different tastes. What are consumer habits in the region like, and is fresh ground coffee still a favorite among consumers in Serbia?

Throughout the region coffee is an essential part of consumers’ daily routine, and in addition to that, it is a category adapted to different local tastes. In the region, especially in Serbia and Bosnia and Herzegovina, drinking traditional freshly ground coffee in which consumers enjoy the fullness of taste, rich foam and recognizable aroma is still a prevailing trend. Talking about numbers, Atlantic Grand has a leading position in freshly ground coffee segment in Serbia with more than 53% market share.

In Slovenia, Barcaffè remained the leader in freshly ground coffee segment and achieved more than 77% market share. Last year, Barcaffè Black’n’Easy achieved a strong volume growth of 46% compared to 2018. At one point, it resulted in a record market share higher than 16% within the Black Cup category.

In Croatia, the Barcaffè brand shared a second place in the freshly ground coffee category during 2019, and in November it reached the record market share of more than 20%.

6.What are your plans for 2020? Are you preparing a surprise for your loyal consumers?

In my opinion, Atlantic Grupa is an example of a company that has pushed the envelope with its innovations, business operations and brands, and it will continue to do so in the future. Constant long-term monitoring and market analysis, a lot of work, and research are at the core of it. In general, it is not a matter of courage for the sake of courage, but there must be a business logic and knowledge of consumers behind it all, whom you are addressing and why, on the basis of which you make the final decision. I’m saying all this because we have a lot of work and innovation ahead of us. Our focus is still on freshly ground coffee as a category, which I have already mentioned, referring to the quality and origin, gustatory qualities, and all the attributes related to this category. Our freshly ground coffee is already recognized in terms of quality and now we want to find a special way to bring it closer to younger generations... On the other hand, in response to a fast-paced lifestyle, we built the concept of on-the-go consumption, which we want to enhance with new ideas. I know we have serious work ahead of us, and I have no doubt that the right moves will come out of the desire and the motivation of the entire team to achieve ambitious plans. In January, we introduced a new brand, new portfolio, and new modern image of the Insta Grand kafa, as well as the new recipes of all 11 flavors, which is only the beginning of this year’s novelties. But, we’re not going to talk in advance anymore. Essentially, our primary goal is to preserve the position of the largest coffee manufacturer in the region and the stable organic growth of the company’s business operations.

7.Atlantic Grupa has been among the companies considered to be desirable employers in the region for years. What do you devote most of your attention to when it comes to employees?

We want Atlantic Grupa to be more than a workplace for our employees, so we pay special attention to the creation of a unique corporate culture that nurtures diversity and encourages cooperation of different production, innovation, marketing, and sales segments. In order to build healthy relationships and a motivating working environment, we have enabled our employees a variety of flexible benefits they can adapt to their needs or interests, such as flexible working hours and occasional work from home, as well as numerous training opportunities covering different development segments – from finances to healthy nutrition.

We firmly believe that every employee within our company can, with their unique insight, contribute to its growth and development, and therefore with the use of company’s principles we strive to enable exactly that.