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| Official Newsletter of the 5th FMCG, Retail & Agribusiness Arena 2014 | November 2014 | No. 04 |

The Agro Sector In Perspective he Fifth Conference of the FMCG, Retail & Agribusiness ARENA 2014, under the auspices of the French Ministry of Agriculture and Organised by Infoarena and the European Bank for Reconstruction and Development, encompassed 150 participants from 15 countries. The conference was dedicated to relationships in the food sector, the consumer goods sector and trade relations across the region.

Eventually they accepted the conclusions we make in full. FMCG, Retail & Agribusiness ARENA 2014 was completed with success. SEE YOU AT THE NEXT INFOARENA CONFERENCE!

Conference conclusions Global perspective, communication and collaboration - Integrated regional approach between private, public and international financial sector to improve transport and logistic infrastructure, linking Danube culture region with Black Sea and Adriatic ports. Overall consensus of participants from corporate advisory and financial sector is that consolidation and M&A activities in FMCG and retail sector is expected to accelerate, focus on market niches (investment/ acquisitions of products/companies with export potential beyond SE region) Continued investment in product and process innovation (latest IT solutions in retail, PL development and young and professional management will be driver of growth) EBRD and other private sector financial providers expressed readiness to support the previously mentioned trends. A platform of dialogue of the whole industry, public and private sectors to increase investment and trade in the region as well as to third markets.

<p.02> MINISTERIAL MEETING

<p.03> ROUND PANEL

<p.09> PAPARAZZO CORNER

Agricultural and food sectors have an important role

How to achieve organic growth

We are grateful to all participants, partners and sponsors

Business Journal • page 02

Ministerial meeting of regional countries relating to Agribusiness held In Dubrovnik

Agricultural and food sectors have an important role in the economies of all countries in the region

he six regional countries of Croatian, Bosnia and Herzegovina, Serbia, Montenegro, Hungary and Slovenia, and before the start of the “FMCG, Retail & Agribusiness ARENA 2014”, held Ministerial meetings where the main topic was the development of agribusiness in the region, improving foreign trade in agri-food products in the region, and the opportunities and arrangements for joint trade to third markets. Following presentations and exchanges of views on the possibilities of greater regional co-operation in agriculture and food industries, participants at the Ministerial meeting adopted resolutions to recognise the diverse and complex challenges faced by both agriculture and food industry sectors both across Europe and globally. This requires a serious and coordinated response by the relevant institutions. Ministers of the six states agreed that the agricultural and food sectors have an important role in the economies of all countries in the region and that joint efforts can increase this concurrency. They also agree that the process of integration within EU provides a good opportunity for the agri-food sector of member countries and candidate countries. However, other forms of regional co-operation can be beneficial and should be supported. Ministers welcome the achieved current level of regional co-operation amongst the countries of Central and Southeast

Europe. They also believe that economic interests and mutual understanding are an important advantage for encouraging future activities. They also consider that some of areas for future closer co-operation include - but are not limited to - an increase in mutual trade, joint efforts to overcoming barriers to third markets and joint projects related to basic infrastructure, such as irrigation and transport. The keys are to confirm the readiness of the participating countries to consider these and other ways to encourage future cooperation for the benefit of agriculture and food sectors in the region. “In this way we have shown the honesty of our government to intensify cooperation and to solve problems” said Tihomir Jakovina, Croatian Minister of Agriculture. Dejan Zidan, Minister of Agriculture, Forestry and Food for Slovenia, pointed out that this meeting comes at a favourable time as country regions face major challenges. “The first crisis was due to the Russian embargo on food products from the European Union, which is very unfavourable for farmers and the food production industry. Another challenge is climate change, and the disasters this year have been really felt across the region. For this reason, we must together find solutions to ease the situation for farmers and the entire sector. We must find common mechanisms, and one of these mechanisms is better co-operation and a common way of

dealing with these challenges. A specific solution is shared with third markets; immediately I think of the markets of China and the Arab market. A few days prior to a conference in Slovenia came a large Chinese delegation to open the door to their market”. Zoran Rajić, State Secretary, Ministry of Agriculture and Environment (Serbia), noted with satisfaction that the countries of this region, although small, have great possibilities for joint use their advantages. “Croatia and Slovenia are members of the European Union; Serbia has special trade relations with Russia and China, as well as Bosnia and Herzegovina and Turkey. All these are our strengths - and that co-operation we can use “, he stressed. With the host Minister of Agriculture, RH Tihomir Jakovina, the meeting was attended by Dejan Zidan, Minister, Ministry of Agriculture, Forestry and Food, Slovenia, Zoran Rajic, Secretary of State, Ministry of Agriculture, Forestry and Environmental Protection, Serbia, Milos Jovanovic, director of Foreign Investment Promotion, Montenegro, Dusan Neskovic, Assistant Minister, Ministry of Foreign Trade and Economic Relations, Bosnia and Herzegovina, and Milán Radacsi, Secretary of Economic Affairs, Embassy of The Republic of Hungary. 

Business Journal • page 03

Panel: Trends in Retail

How to achieve organic growth

ound Table Trends in retail was moderated by Melanie Seier Larsen, Director, Boston Consulting Group Croatia, a very effective presentation evoking the trends in Retail. Speaking about the possible preparation of the retail industry for future growth, Andrey Dvoychenkov, director of Nielsen for the Adriatic region, pointed out how the latest trends in the industry focused on customer satisfaction. In this section, it is possible see an increase as consumers want to find everything they need in one place, and that their purchases are appropriate. “It is therefore necessary to adapt services to enthusiastic customers, with the obvious focus on private brands, along with promotional activities based on customer behaviour,” says Dvoychenkov. High quality fresh food is the top line that always attracts customers. Realistically, customers like promotions and discounted rates. Interestingly, promo price is more successful for food categories rather than for nonfood e.g. laundry detergents, which are purchased infrequently and consumers often don’t remember a regular price. In addition, innovation as well as growth is very important,” stated Dvoychenkov. PRIVATE LABELS Most private label goods in the region are purchased in Slovenia, Croatia,

Serbia and Bosnia. “There is no fear from big brands, as private labels may threaten some local produce rather than big brands. The consumer is an important factor in the price and/or quality of it, and we must be aware it not good to compromise between these two factors,” explains Dvoychenkov. Katarina Jaksic, Regional Marketing Director for Ipsos Adria (Serbia), assesses how private brands are growing and that they have the highest share in developed countries. “Consider the United Kingdom; that is so developed that consumers are buying more than 50% private branded goods. The share of private labels in the region is associated with the share of the five leading chains in each country. Private labels have an advantage as far as the relationship between price and quality, whilst the dominant brands are in packaging and innovation. Brands emerged from the needs of consumers to save money. Offers from private labels have changed and enriched the scene. Today, brands are moving towards innovation and creating a quality brand. The main disadvantage is the poor customer loyalty, as opposed to brands that have loyal customers, “said Katarina Jakšić. For Krešimir Dominić, Planning &

Development Director for Abrakadabra (Croatia), brands have a beautiful story to a wider area and there is an aggravating factor that cannot be controlled in retail. “They have the potential for growth in promotions in conjunction with retailers,” says Dominic. Jelena Doko Cetina, retail manager at Nielsen, noted that private label manufacturers invest more in research and development. “It is wrong to understand that private labels are copies of a brand,” says Doko Cetina. Maria Anargyrou Nikolic, commercial director of Coca-Cola HBC Serbia, added that manufacturers are increasingly associated with the brand, and that brands and retailers are increasingly working on mutual trust. “In private label, retail has to be careful in the case of local products in that in many cases they do not have the standards required by developed markets”, warns Anargyrou Nikolic. Private labels, opines Helmut Fenzl, CEO of Spar International Croatia, have several dimensions. “With an affordable price - an already known - its specificity is differentiation”, quotes Fenzl. (continued on next page)

Business Journal • page 04

(continued from previous page) Martin Elling, director of Lenta and a member of the Council of Agribusiness at EBRD Switzerland, also pointed to some of the risks associated with private labels. “If Coca-Cola has a problem with the quality then it is their problem, and if a private brand has quality problems, then it is a problem throughout the chain. Also, traders are constantly thinking about margins and they more focus on brands at the lower range”, says Martin Elling. CREDIT CARD AND IT SERVICES Catalin Cretu, sub-manager of Visa Europe for Romania, Croatia and Slovenia, stressed the importance of a database within credit card companies. “Security, control and convenience of payment are very important to the customer, and that we can, based on evidence, differentiate bonus rewards. Because of the database we have, our retailers can implement a marketing campaign. We can see how consumers behave in-store and what happens in the store and outside it. We can see a portfo-

lio of the consumer and where they buy, while in the case of cash payment you cannot see the cocoa buyer behaviour. It is on the basis of consumer behaviour that credit card companies can analyse purchases, and can lead to very good cooperation between retail and credit card companies”, suggested Catalin Cretu.

any time on the shelf”, questions Guzej. Dragan Munjiza, Foudner & Owner of Viktor Jakov (Croatia), found that a large retail chain for 15 years in Croatian and Serbian markets is planning to enter the markets of the region. As a good example, he noted that DM in their range, incorporates organic products from local manufacturers.

Speaking of loyalty, Dejan Damnjanović, Head of Sales Manufacturing, Retail and Services, Atos (Serbia), believes it is crucial to have personalised offers. “Whatever channel you use, you always get the same information. The IT sector brings a wide range of novelty and innovation and to retailers the decision is how to use them“, said Damjanovic.

Initiatives for e-commerce in the EU will make it a lot easier to supply and facilitate the work of retail chains, says Damir Plejić, director Respons Digitus. “The main challenge for retailers is how to create the experience and use information in order to maintain position”, says Plejić.

Ivan Guzelj, Sales SE Europe, SymphonyEYC, pointed out the problem that the leading retail chains in the region have unique shopping centres. All sales of one chain are different as they were taken and not built. “The customer was so confused and did not know where anything was. Can their solutions help customers know where that product is at

Tone Stanovnik, General Manager of Špica International (Slovenia), pointed out that some funds should be directed towards young people who have no money but have time to develop creative solutions to improve the business. “Young people know how to use new technologies and have the opportunity to work on innovation”, pronounced Stanovnik. 

Sponsors of the 5th FMCG, Retail & Agribusiness Arene 2014. Organizer

Co-organizer

Infoarena

Under the auspicies of

EBRD

Ministarstvo poljoprivrede

Sponsors and Partners

Agrokor

Atlantic Group

Atos

Bingo

Chep

Coca-Cola Hellenic

Delta agrar

Eos Matrix

Erste Group

E&Y

IFCO Systems

MK Group

Podravka

STUDEN & CO

Symphony EYC

Špica International

Visa Europe

Žito Group

Business Journal â&#x20AC;˘ page 05

Slide from PP of Nielsen at FMCG Arena 2014

Source: Nielen, PLMA, IRI

Slide from PP of Ipsos at FMCG Arena 2014

Business Journal • page 06

The list of participants at the FMCG, Retail & Agribusiness Arena 2014 Last name

First name

Company

Country

Function

Dominić

Krešimir

Abrakadabra integrirane komunikacije

Croatia

Planning & Development Director

Doko Cetina

Jelena

ACNielsen d.o.o.

Croatia

Retailer Services Manager

Galić

Mislav

Agrokor d.d.

Croatia

Executive Vice President for the Business Group Food

Bogdanić

Marta

Agrokor d.d.

Croatia

Director of Projects, Investments Division

Benić

Anita

Agrokor d.d.

Croatia

Kuštrak

Damir

Agrokor d.d.

Croatia

Executive Vice President

Mizo

Nikola

Alkaloid AD Skopje

Macedonia

Director proﬁt center Chemistry , Cosmetics , Herbs

Nanov

Darko

Alkaloid AD Skopje

Macedonia

Head of Export Cosmetics and Herbs

Hrvić

Rusmir

AS GROUP-KLAS D.D. SARAJEVO

Bosnia & Herzegovina

Director

Kostić

Dragomir

Atlantic Brands d.o.o.

Serbia

Director General

Marković

Aleksandar

Atlantic Brands d.o.o.

Serbia

Director of sales

Vranković

Neven

Atlantic group

Croatia

Group Vice President for Corporate Activities

Mišetić

Ivan

Atlantic Grupa dd

Croatia

Secretary General

Idžojtić

Miroslav

Atos Hrvatska

Croatia

Head of SAP Practice

Damnjanović

Dejan

Atos IT Solutions and Services d.o.o. Beograd

Serbia

Head of Sales Manufacturing, Retail and Services, Atos SouthEast Europe

Krpina

Ljerka

BADEL 1862

Croatia

Senior coordinator for a production function

Kulišić

Dalibor

BADEL 1862

Croatia

Senior Coordinator for market activities

Poznić

Dalibor

Belje dd

Croatia

CEO

Paunovski

Tatjana

Bingo Tuzla

Bosnia & Herzegovina

Kunosić

Ljiljana

Bingo Tuzla

Bosnia & Herzegovina

Executive Director

Zubak

Matea

Business Conferences

Croatia

Project manager

Gavazzi

Tomislav

Business Conferences

Croatia

Founder&owner

Majetić Pavić

Carmen

Business Conferences

Croatia

Program Director

Pavlović

Ana

Business Conferences

Croatia

Bešenić

Ivana

Business Conferences

Croatia

Key account manager

Knezević

Predrag

CHEP

Croatia

Business development representative Croatia

Šamu

Karlo

CHEP

Croatia

Field Service Executive

Zindović

Branka

CHEP Serbia

Serbia

Sales representative Serbia

Fiser

Dragan

CHEP Serbia

Serbia

Asset Menagement

Raguž

Željko

City of Dubrovnik

Croatia

Deputy mayor

Anargyrou Nikolic

Maria

Coca Cola HBC Srbija

Serbia

Comercial director

Draja

Mircea

Coca-Cola HBC

Slovenia

General manager of Croatia, Coca-Cola HBC B-H Sarajevo and Coca-Cola HBC

Veselinović

Igor

CocaCola Hellenic HBC Srbija

Serbia

Customer Development Director

Milinčić

Predrag

Coca-Cola Hellenic HBC Srbija

Serbia

National Field Sales Manager

Holik

Alica

Časopis PROFESSIONAL

Croatia

Marketing Director

Gaftea

Diana

DARBY Private Equity

Hungary

CFA Associate

Brozović

Ivan

Degordian

Croatia

Account Manager

Radivojević

Spomenka

Delta Agrar

Serbia

Director of export-import

Keranović

Sanja

Delta Agrar

Serbia

CFO

Kaličanin

Vladan

Delta Agrar

Serbia

Manager

Desivojević Cvetković

Marija

Delta group

Serbia

Vice President for Strategy and Development of Delta Holding

Abaker

Adam

Zeituna

Germay

Budiana

Mioara

E&Y (Ernst & Young)

Romania

Indermuhle

Urs

E&Y (Ernst & Young)

Serbia

Partner, Transaction Advisory Services, Adriatic region

Mostarac

Tamir

EBRD

Bosnia & Herzegovina

Principal Banker

Jelušić-Kašić

Vedrana

EBRD

Croatia

EBRD Director for Croatia

Ždrale

Miljan

EBRD

United Kingdom

Senior Banker, Head of Agribusiness, South- Eastern Europe

Oona

Schneider

EBRD

Croatia

Principal Banker

Christoph

Saenger

EBRD

United Kingdom

Economist, Project and Sector Assessment

Cvirn

Ana

EOS Matrix

Croatia

Head of Operations Department

Franulić Šarić

Diana

EOS Matrix

Croatia

Head of Corporate Communications and Marketing

Cerinski

Barbara

EOS Matrix

Croatia

General Manager

Ibrahim

Suhair

EPH

Croatia

Director B2B tourism

Glasnović

Marta

Ernst & Young d.o.o.

Croatia

Senior Manager, Tax

Habuš

Lena

Ernst & Young d.o.o.

Croatia

Director, Transaction Advisory Services

Šarić

Maša

Ernst & Young d.o.o.

Croatia

Executive Director, Tax

Radak

Stevan

Erste Bank a.d. Novi Sad

Serbia

Director M&A

Bleier

Ingo

Erste group

Austria

Head of Erste Group Investment Banking

Gyuracz

Attila

Erste Group Bank AG

Austria

Director Merchant Banking

Milovanović

Miloš

FAO/EBRD projects in Serbia

Italy

Coordinator of FAO/EBRD projects in Serbia

Artuković

Dubravko

FRANCK dd

Croatia

CEO

Executive Director for Investments

Manager

Business Journal • page 07 Last name Orešković

First name Luka

Company Harvard University

Country Croatia

Function Co-Chair, Emerging Europe Business and Government

Isoski

Andrej

HL Display

Slovenia

Country Manager

Radácsi

Milán

Hungarian Embassy in Zagreb, Croatia

Hungary

Secretary for economy

Thaler

Heimo

IFCO SYSTEMS Austria GmbH

Austria

Managing Director

Vrcan

Irena

IFCO SYSTEMS Croatia d.o.o.

Croatia

Director

Jovanović

Miloš

Investment Promotion Agency

Montenegro

Director

Jakšić

Katarina

Ipsos Adria

Serbia

Regional Marketing Director

Jovanović

Aleksandra

Ipsos Strategic Marketing

Serbia

Project Manager

Sabljić

Maroje

JaTrgovac

Croatia

Editor in chief

Milošević

Boris

KPMG d.o.o. Beograd

Serbia

Partner in the Department of advisory services

Trivić

Saša

Krajina klas

Bosnia & Herzegovina

Director

Trivić

Nemanja

Krajina Klas

Bosnia & Herzegovina

Marketing Director

Ković

Zoran

La Log

Croatia

Managing Director

Elling

Martin

Lenta

Switzerland

Member of the Board

Kruhek

Ivica

MARKER d.o.o.

Croatia

Co-founder and CEO

Krosnar

Katka

Mergermarket

United Kingdom

Journalist

Babache

Andrej

Mid Europa Partners

United Kingdom

Director

Nešković

Dušan

Ministry for Foreign Trade and Economic Relations

Bosnia and Herzegovina

Assistant Minister

Badovinac

Petra