FOOD & AGRICULTURE - ICE CREAM. Premia Starts Production for Laima and Kalev

08 Jun 2011 • by Natalie Aster

The Tallinn-listed frozen food producer Premia Foods launched a production of sweets-like ice cream for the Latvian candy manufacturer Laima (see news2biz LATVIA no 316 page 5) and its Estonian peer Kalev.

For Laima, Premia produces three flavours, two of which are ice cream versions of Laima's popular candy bars Serenade and Vaverite, and the third is simply named Laima. Laima ice cream is also pitched as an all-dairy ice cream – aiming at the premium segment.

In turn, Kalev contracted Premia to produce the ice cream called Mesikapp (Honey-paw, the diminutive name for bear in Estonian) to supplement its popular Mesikapp series, consisting of chocolate bars and candy.

"Of course, we also spoke with the local ice cream producers," says Dace Kokina, marketing manager for AS Laima, to news2biz. "We chose Premia Foods because their offer was cost-effective and their production facilities allowed more opportunities for our products (for example, we can include more additives or create multi-layer ice creams)."

"Production for other brands is not a new business line for us, we have done this for a while," says Kuldar Leis, CEO of Premia Foods, to news2biz. "We already produce ice cream for popular Limpa and Lotte brands, and cooperate with the milk processor Tere – we do ice cream for their Hellus brand while they produce yoghurt for our Vaike Tom brand. Strong brands can be used beyond their niche."

According to Leis, the share of production of brands other than those of Premia's own still comprises only a fraction of the total output volume.

"Of course, producing ice cream for other brands somewhat eats up the 40% of the market share we currently have in Estonia – but not much, as the volume is small," he says.

Leis notes that the ice cream market is very open to innovations: "One has to introduce new products every year in order to keep up with the market."

Premia Foods posted a turnover of EUR 77.3m in 2010, an increase by 12.5% compared to the previous year. The company's profit reached EUR 1.3m, growing by 89% y-o-y. The share of ice cream comprised 34.2% of the sales, while 38.5% originated from the production and sales of fish and fish products, and 25.7% from the sales of frozen vegetables.

The above news abstract has been taken from a bi-weekly newsletter to professionals doing business in Eastern Europe "news2biz – Food and Agriculture".

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