Heidi: Gap between cheap and premium segments will further widen

2009 is a year with two major unknown quantities for the Heidi chocolate business, according to Erwin Vondenhoff, the company’s general manager: “What will happen with the exchange rate?” and “How will consumers react to the crisis?” The manager says that, judging by the company’s RON sales dynamics in the last quarter of 2008 (a 9% rise against Q4 of 2007), the market’s premium segment is not expected to see a decline. “In the context of a difficult economic environment, I think the mainstream segment will suffer to the benefit of the lower-price segment, with the gap between the cheap and the premium segment expected to widen. Brands lacking a strong presence on the market have reasons for concern,” Vondenhoff says. He expects sales of Heidi Chocolat company to rise by 17-18% this year on 2008, to around 53 million RON (12 million euros). As for the risk that the RON will continue to depreciate, the manager says the most affected could be the company’s profit, because raw material accounts for over 50% of the producer’s overall costs, and it is largely imported.