Hiestand sales thriving on innovation and efficiency

- Last updated on GMT

Related tags: Hiestand, Baker, Baking, Marketing

New products, a promising joint venture and rapid distribution have
put Swiss baker Hiestand in a commanding position at the end of the
year, and the good times are set to continue, according to market
analysts.

Hiestand has announced a rise in sales of more than 20 per cent for both the third quarter of 2004 and the first nine months of the year, with all of the group's businesses reporting higher sales revenue compared to the same periods in 2003.

The outstanding performer was Hiestand Germany, which managed to increase sales by 42 per cent, almost as much as all four of Hiestand's other businesses put together.

The company said in a statement that three new production lines, one for Danish pastry and two for filled croissants, had enabled Hiestand Germany to double its production capacity since the start of July and that had pushed sales forward.

Hiestand Germany has also greatly benefited from an excellent distribution network after buying German distribution company Back and Friends in February this year.

Indeed, market analyst René Weber, of Switzerland-based Equity Research, said that Hiestand was now the only baker in Germany which could rapidly supply and fulfil the needs of retailers, from shops to petrol stations, across the whole country. Weber said distribution was just as important as increased production in driving Hiestand's sales growth.

And Weber predicts a rosy future for Hiestand, citing the start of a joint venture with Switzerland's second biggest retailer, Coop, next year - something which should secure sales increases in the country for the next two years.

Hiestand will own 60 per cent of the venture and Coop 40 per cent, with both companies making a combined investment of CHF50 million (€32.7 million). Weber said that the move suited both companies well because Coop wanted more frozen baked goods on its shelves and nearly all of Hiestand's new products in 2004 were in its frozen bakery sector.

"In Germany, Hiestand's frozen bakery sector is growing ahead of the market level,"​ said Weber who added that he did not have the exact figures but expected further growth in the next few years.

"The group is well-known for being very innovative and we believe they will continue to show that,"​ said Weber.

The company as a whole currently looks likely to equal or even beat its 2004 sales growth target of 18 per cent, having previously managed a 10 per cent increase in 2003.

Weber said Hiestand was performing well overall, its share price doubling in 2004 and profit margins increasing. The company has also undertaken a cost savings review called Fit for the Future in which it hopes to achieve more efficient production, though Weber said he was not expecting the company to start closing facilities.

Hiestand focuses on premium bakery products, claiming to use "high quality, wholesome ingredients",​ in a product range including bread, pretzels, snacks and croissants. Examples include six-grain bread and a croissant-shaped snack called a Rustico Gipfel with seeds. The company also has some organic products, such as its Organic Twist bread.

Irish food producer IAWS has a 22 per cent stake in Hiestand and also owns Hiestand's UK-based business. In addition to those mentioned, the company has businesses in Poland, Southeast Asia and Japan.

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