Michał Zajezierski, Vice-President of the Management Board of the Polish bakery Nowel Sp. z o.o., spoke with Editor-in-Chief Bastian Borchfeld about the challenges facing the bakery industry and how the family-owned company intends to continue to grow.
Borchfeld: How do you assess the current economic situation?
Zajezierski: In recent years, the economic situation has certainly been favourable for us, and Poland, in economic terms, was in an upward trend. The standard of living of Polish families, according to the Central Statistical Office, has remained stable and the assessment was clearly positive. Optimistic moods in the society and a good economic situation (Poland’s GDP increased by 3.8% last year) translate into economic growth and greater consumption – including bread. However, the constant cost increase, which we have been dealing with for several years, is a considerable challenge for manufacturing companies, especially in connection with still low prices of bread in Poland, when we compared them with neighbouring countries.
Borchfeld: What are the biggest challenges for the baking industry, especially for NOWEL?
Zajezierski: The increase in production costs is certainly one of the biggest challenges for the baking industry now. It concerns energy or labour costs, as well as raw materials prices – which means for bakery products mainly flour, the price of which, according to the latest data, increased by 7% last year in Poland. However, the problem is global; although climate change affects many industries, it plays a special role in the food sector. It even creates a new reality to which all food producers must adjust.
Borchfeld: In 2019, you took part in various fairs.
Zajezierski: In 2019 we made our debut as an exhibitor at the biggest and most important event in the food industry – Anuga Food Fair. Up until then, we have been present in Cologne for many years as visitors. Earlier, in May, we had presented our products at the PLMA in Amsterdam, so we dare say that we have marked our presence at the two most important events for the baking industry in Europe. Given our growing position in Poland and our ambitions, it is almost certain that we will attend these and other industry events in Europe and beyond on a regular basis. Currently, Nowel is present on 15 foreign markets, including non-European countries such as South Korea and the United States, and 30 percent of our products go to stores outside Poland. This percentage will grow from year to year. We focus on strengthening our position on European markets and on expanding our product offer. And from this perspective, these meetings, discussions, exchange of experience with industry representatives from almost all over Europe were invaluable. Some of the visitors knew us from previous professional exchanges, for others we were an interesting and inspiring example of a company that for almost 100 years of its activity had undergone all development levels – from a small local bakery to an international producer of frozen bakery products. I am convinced that some of the relations established during these meetings will result in cooperation and the ever stronger brand of Polish bread will win lovers among the next European consumers.
Borchfeld: Who buys your products?
Zajezierski: In short, conscious consumers who are looking for healthy products of high quality. Although Europeans, including Poles, consume less bread than they used to, their decisions concerning the choice of bakery products are more thoughtful and their expectations of quality and offer are higher. They choose natural sourdough bread, enriched with seeds or other nutritionally valuable additives. Bioproducts, manufactured on the basis of raw materials from organic farming, are also becoming more and more popular. It has become a standard among customers to pay attention to whether the bread has the so-called “clean label”, i.e. whether it contains only natural ingredients, without preservatives or dough enhancers. We try to react to the consumers’ changing needs on an ongoing basis, so we are constantly developing our offer, while maintaining traditional production recipes. That is why, among other things, in autumn 2019 we launched one of the most modern Research and Development Centres in Poland, which will allow us to optimise production processes and introduce innovative bread of the highest quality even more effectively. The work in the Centre is carried out by our outstanding specialists, supported by scientists from prestigious Polish universities who are patrons of our activities.
Another trend that we notice in our customer’s choices is the interest in snacks, including hot dogs. The dynamic development of the “convenience” sector has been the most important trend from the point of view of all food producers for several years. Europeans want to have quick and comfortable access to tasty, good quality snacks wherever they are, e.g. on their way to work, to a meeting, during shopping or business trips.
Borchfeld: How high is the export quota?
Zajezierski: The export quota amounts to 30 % of our sales. This percentage has been growing steadily in recent years and we hope that this trend will continue in the future.
Borchfeld: In 2019, you were planning to increase your production capacity. Did you manage to achieve this plan and what is your production capacity now?
Zajezierski: Constant and cyclical production increase is our priority. In 2014, in Legionowo, we launched one of the most modern lines for the production of Kaiser rolls, in 2016 – a line for the production of mixed breads, and in 2017 – a fully automated line for the production of baguettes and rustic bread and Europe’s largest line for country bread rolls, called rosenbrotchen. In 2019, as I have already mentioned, we launched a line for the production of breakfast rolls and of hot dog bread. For this year, we planned new investments, which will allow us to further develop our product range.
Borchfeld: Can you share the information about the amounts the company invests annually in production? What are these areas?
Zajezierski: Since 2013, we have allocated more than 50 million EUR for the development of the machinery. Many stages of production are currently performed by robots. Modern technologies and innovative solutions are the most important areas for us; their aim is to streamline production, constantly improve the quality and nutritional properties of the produced bread. Quality is our priority, therefore the opening of the Research and Development Centre was such an important event for us. In accordance with the investment plan adopted by us, we focus on work optimisation and constant introduction of innovations. Such a strategy aims not only at offering our customers the best possible products but also at improving the processes from the point of view of employees.
Borchfeld: NOWEL is a family business. Should it remain so?
Zajezierski: The history of our company dates back to the mid-1920s. Exactly in 1925, Antoni Nowakowski founded an artisan bakery, which for many years produced bakery products for inhabitants of a village near Warsaw. With time, this small bakery turned into a family business, which is passed on from generation to generation. Currently, the fourth generation – me and my sister Karolina Zajezierska, with the support of our mother, Elżbieta Zajezierska – co-decide on the development of the bakery. We focus our attention on further development of the company in two areas – on innovations in the product range and export. The new product has always been a family business, a part of our life and definitely should remain so. We do not think about other solutions.
Borchfeld: If we could look to the future… What will the situation of the company look like in 5 years?
Zajezierski: We certainly think about increasing our presence on foreign markets, we want to send our bread to new countries, also outside Europe. Thanks to constant innovation in technology and very close partner relationships with customers and partners around the world, we can respond quickly to the needs of consumers almost all over the world. I am convinced that it is precisely this flexibility and the anticipation of trends that is our strength and a feature that is appreciated by an increasing number of our customers. We also want to build a brand that recognisable, liked and respected by the end-customer, i.e. the consumer. We want our company’s DNA to be preserved along with the technological development and expansion of NOWEL’s scope of activity. We believe that the bakery’s dynamic business development can go hand in hand with those values to which our family has been faithful for 100 years and which successive generations of bakery employees believe in.
Borchfeld: Thank you for the Interview.
