The Oetker subsidiary Wolf ButterBack KG plans to combine conventional and new, and on the one hand remain a loyal supplier to artisan bakers through wholesale organizations, while on the other serving new sales channels as well as European countries abroad.
This could be assisted by cooperation with another Oetker Group subsidiary, the recently acquired Diversi Food in Belgium.
bbi: Mr. Tomasch, you have been spokesman for the Management Board of Wolf ButterBack KG in Fürth for six years; how far has the importance of Europe as a whole for Wolf ButterBack’s sales changed in these years?
Tomasch: Wolf ButterBack’s business in Europe as a whole has continuously gained importance in recent years. Whereas exports as a proportion of sales were still below 25% six years ago, they have now grown to over 30%. Although our most important market is and remains Germany, we pursue a strategy of further internationalization, and aim to achieve half of sales in countries abroad in the medium term.
bbi: Which countries have gained most significance in this respect, and how do you see growth rates compared to the German market?
Tomasch: The good news is that we can grow both in Germany and abroad. In addition to our classical foreign markets, Austria and Italy, the strongest growth in importance has taken place in all of our immediate neighboring countries, e.g. France, the Netherlands or Belgium and Scandinavia. Growth in Germany in 2017 was just under 4%, while the overall growth rate abroad was 20%, and we were even able to double the level of sales in a number of countries.
Christian Tomasch (52), spokesman for the Wolf ButterBack KG Management Board
bbi: How much has the expansion of sales influenced the product range policy, and how much more “European” have baked goods become? How many products can be sold in the same quality throughout Europe, or must the manufacturing operation use country-specific recipes?
Tomasch: Countries abroad have a very significant influence on our product range policy. Firstly, consumers’ taste preferences with regard to specific baked products in the individual European countries are becoming increasingly uniform. French croissants, for example, are in demand worldwide. Snacks based on Danish or puff pastry dough, e.g. savory loops or cheese-filled sticks, or even pizza products, can also be marketed well in the same quality throughout Europe. In this respect, Wolf ButterBack’s premium quality is also appreciated abroad, and we constantly find more sales markets that can pay the corresponding price for it.
On the other hand, however, one must clearly recognize that a product range aligned purely to German tastes cannot succeed internationally. The preferences for various fruit fillings, or expectations regarding size, volume or baking properties, are too dissimilar. There is a trend, especially in southern Europe, to ask for smaller baked product sizes, and baking takes place mainly without steam. That’s why Wolf ButterBack is also increasingly developing different product ranges for different European sales regions.
bbi: Has the growing out-of-house market changed the structure of the product range?
Tomasch: The product range structure actually follows the sales markets. The out-of-house market in Europe is booming. Consequently there is more-than-proportional growth in the savory snack market, and topped articles in any form have become more important. Nowadays any snack counter is unimaginable without fresh croissant-based sandwiches, for example.
bbi: Not only have customers’ consumption habits changed, so has their purchasing behavior. The food retail has gained market shares of the overall baked goods market. In the past there was a strong focus on bread and bread rolls. Significant increases are now observable with regard to fine pastries, snacks and cakes. How does that affect your business and how does Wolf ButterBack respond to it?
Tomasch: We monitor changes in consumers’ purchasing behavior very closely, and ultimately we also want our product range to follow consumers to wherever they demand our premium quality. The decisive factor for us in this respect is that we offer a quality with our baked products whose characteristic features are artisan manufacture, the use of butter and slow dough preparation, which all come at a price. That’s why the sales channels that come into question for us are all those that can serve a corresponding quality and price segment.
bbi: How important to Wolf ButterBack is the food service market, and how significant for you is the growing importance of not only European but also international chains in this market?
Tomasch: The food service market is also developing dynamically alongside the European boom in the out-of-house market. To serve this market in Germany, we have cooperated for more than two years with our sister company Dr. Oetker Professional in Ettlingen, which markets a range of Wolf ButterBack articles through specialist food service wholesalers. However, artisan bakers, Wolf ButterBack’s core clientele, have also performed well as market leaders in the out-of-house market. Moreover, international chains and other customers in the transport catering area are also of interest, and we make contact with them through our presence at international trade fairs.
bbi: Wolf ButterBack is part of the Oetker Group, and not long ago took over Diversi Food in Belgium, a company which says itself that the conviction that “bake-off” is the future was the origin of its formation. Nowadays, as I see from their web site, the company aims deliveries to bake-off and the food service, together with supplying own brands to retail traders. Is there any collaboration or overlaps between Wolf ButterBack and Diversi Food, or even a competitive relationship?
Tomasch: Collaboration between Wolf ButterBack and Diversi Foods will be strengthened in the future under the umbrella of the Martin Braun Group. There is no competitive relationship, on the contrary, primarily they complement one another very well. For example, collaboration with Diversi Foods’ Belgian-Dutch sales organization is designed to strengthen Wolf ButterBack’s internationalization in these countries just described above. Conversely, Wolf ButterBack’s sales organization, e.g. in Germany, Austria and Italy, can achieve new turnovers for Diversi. The product ranges of the two companies also complement one another well, since Diversi focuses on bread and bread rolls, while Wolf ButterBack concentrates on viennoiserie and snacks. The Martin Braun Group’s frozen food product range is now developing into a full range of high-quality specialties as a result of the collaboration, and it now offers complete customer solutions.
bbi: Online product retail is currently an exciting topic. Your sister company Martin Braun is testing this at present, with the aim of a roll-out for other Oetker baking area subsidiaries. How close is Wolf-ButterBack to this topic, and do you see the opportunities for its application mainly in Germany, or in the export market as well?
Tomasch: It is clear that digitization will also take hold in the baking sector, and will always do so wherever it can generate customer benefit or efficiency, and of course across national boundaries as well. As a subsidiary company, Wolf ButterBack is included as an integral part of the digitization projects within the Martin Braun Group. We are working on the topic and are examining which options exist for us. In contrast to Martin Braun, which can also deliver its orders generated in the online shop directly to customers through its own logistics, Wolf ButterBack does not have a logistics structure of its own and delivers via the trade, e.g. Bäko wholesalers. So for an online shop to make sense for Wolf ButterBack, it would be necessary for a wholesale stage to be incorporated. This still needs many discussions, and the creation of the technical prerequisites first of all. Automated, digitized ordering procedures, assisted by EDI (electronic data interchange) currently have higher priority for us and for our customers. 40% of our orders are already executed via EDI. However, the majority are still communicated to us via classical media such as telephone, E-mail or even Fax.
bbi: Europe as a procurement market, or regionality is trumps? What and how much is possible, and what can be communicated in view of the local patriotism increasingly invoked in all parts of Europe?
Tomasch: The reality includes both. On the procurement side, for some individual raw materials one is dependent on the world market in terms of both price and quantity. Nevertheless, we succeed in purchasing nearly 90% of our raw materials at least from regional or national suppliers. Marketing finished baked products with a regional connection is very successful. This balancing act can succeed only if regionality is played out through the recipe or through individual ingredients, e.g. fruits or fillings.
bbi: Europe’s baked products market – can you define Wolf ButterBack’s position in this respect a) today, and b) your targets for 2025?
Tomasch: We want to define our position in Europe’s baked goods market less in terms of size and much more via our positioning as the best supplier of high-quality butter-based specialties in the viennoiserie and snacks area and, in conjunction with Diversi, in the bread/rolls area as well. If our customers attribute this positioning to us, and this confers on us a place among the Top Ten in the overall European frozen product bake-off sector by 2025, we shall be grateful.
