With over 14 years of marketing experience in the FMCG, Noemi Varga works now as Head of Marketing at Tchibo, being responsible for both Romanian and Hungarian markets. What are the challenges and the differences between these markets? How does the company manage to profitably integrate the corporate resposnibility initiatives within its operations and both within its marketing strategy? How to win the cautious and price sensitive Romanian customers after recession with premium products? Noemi Varga explains within an interview taken by Cristina Lincu.
What are the differences between the three markets you have worked with as a Marketing Manager at Tchibo? (Romania and Hungary vs Germany)
I believe that we are all the same as human beings with the same universal needs, but because of many reasons we might act differently among different circumstances. If you want to translate it to coffee, then I can say that the reasons why we drink coffee are the same: we want to energize ourselves or get relaxed, we want to have a moment for ourselves or we want to socialize with others and so on. Still, we prepare our coffees differently and we prefer different tastes. This is what makes the markets different and also the cultural context. Working in the headquarter in Germany I had the chance to get in contact with different Eastern-European countries, and now I am fully responsible for Romania & Hungary. The latter two, despite the geographical closeness are different in terms of consumption habits and also brands.
For example, in Romania the majority of people still prepare their coffee in ibrik and they hardly use any coffee machines. In the contrary, in Hungary the most common preparation method is the espresso way, either with the moka pot/ bialetti or with a small espresso machine. As a result we have different taste even from the very same coffee blend. However, in the Western part of Romania we can see the influence coming from the closeness of Hungary.
On the other hand if you take our single portion system, Cafissimo or our Non Food Shop, there is no significant difference.
If you think about cultural differences I could mention, for example, that Romanians are considered more emotional and this I can gladly confirm. This is something what we need to take into consideration when developing our local communication or activations.
Coffee is among the most popular beverages in the world. Where does Romania stand worldwide and how competitive is the Romanian market in this sector?
Romania is in the TOP 30 countries when it comes to coffee consumption, with its annual average of 2.3 kg/capita. This is below the average in the EU, where the Scandinavian countries are taking the lead with more than 8 kg/capita. As a reference, Germany is standing with 6,4 kg while “The coffee country”, Italy with 5,6 kg/ capita.
The Romanian market is highly competitive. Even though the economy is on a rise, after the crisis consumers remained cautious and make thorough purchase decisions, where price is a very important factor.
The Romanian market is highly competitive. Even though the economy is on a rise, after the crisis consumers remained cautious and make thorough purchase decisions, where price is a very important factor.
What are the CSR elements that the company is developing in Romania and what is their impact?
For more than 10 years now sustainability is a key part of Tchibo’s global strategy. As a leading coffee producer we purchase coffee beans from all over the world, and we believe that topics such as environment and climate protection, diversity, clean water or fair working conditions have to be answered in the global context.
For more than 10 years now sustainability is a key part of Tchibo’s global strategy.
Our vision is to offer coffee from sustainable sources only. To achieve this on one hand we work together with international organizations like Rainforest Alliance, UTZ or Fairtrade. On the other hand we have developed our own Tchibo Joint Forces!® program, which gives us the possibility to support directly the smaller farmers. We help them with training programs in order to make their plantations more productive, thus earn more money and have a better living. Beyond this we also have special „help for self-help” projects where we support the farmers to improve their living conditions for example by making them clean water accessible or giving them cows or teaching them to create handycraft products to improve their and theirs families lives in a sustainable way.
We are also very proud of our Children’s Project in Guatemala, which started in 2013 and together with the Save the Children organization we built and run kindergartens in the plantations. Here we take care of children whose parents are working on the plantations. We keep them safe, provide them meals and education, which is a huge support for their parents. The project is very successful and we would like to extend it also to Tansania soon.
Given the importance of online in attracting and retaining the public and clients, do you intent to complete the web page? (the „cafissimo” section is missing entirely).
Digital is an inevitable part of our lives and cannot be ignored. In the past years it became one of the most important communication channels for all of us. Thus, we use our Facebook profile actively where we have the opportunity to talk to more than 85.000 people directly. Of course in case we have a focus topic, such as the newest product launch Tchibo for Black 'N White, we create a dedicated landing page where we can lead the traffic from our online campaigns.
Digital is an inevitable part of our lives and cannot be ignored.
What are the most successful marketing strategies for your sector in Romania?
As in any sector it is key that we understand our consumers and create products which are relevant for them. As the market is very competitive, in the long-term only the brands that answer these needs and manage to build up an emotional bonding with their consumers can be succesful.
To what extent integrating new technologies propelled the brand Tchibo among competitors? Can you give us some examples?
Coffee in general is a very traditional category, where it is rather difficult to find real innovations. The most important development of the past 10 years was the appearance of the first single portion systems. These are coffee machines working with ready-to-use coffee capsules. Our system, Tchibo Cafissimo, is very successful in many European countries. This segment has also further growth potential; therefore, new products are still to be expected here, also from us.
Considering the fact that in your sector there aren’t any „local” producers and the „battle” happens between foreign companies, do Romanian consumers stay loyal to a single coffee brand or do they tend to oscillate between brands?
Romanian consumers are not different from others in this respect. Buying decisions are over 70% made in front of the shelves in the supermarkets. People have usually 2-3 brands in their mind and depending on how attractive the offer at that moment is, they choose. They can be easily seduced by an aggressive promotional price, a gift mug or by the possibility to win something. This is why it is crucial for us to build an emotional bonding between our brand and our consumers as this is the only way to build up loyalty.
Buying decisions are over 70% made in front of the shelves in the supermarkets.
How do you estimate the evolution of the coffee market in the following years? Do you intend to develop new products/services/concepts?
The coffee market overall is rather stable. However we see the difference between the segments. While traditional roasted coffee is slightly declining, single portion is dynamically growing, but of course from a way smaller base.
As mentioned, we always have news around Cafissimo, but we also have to keep in mind that traditional roasted coffee is still appr. 70% of the total coffee market. Having said this, we just have introduced to the newest variant of Tchibo in Romania, Tchibo for Black 'N White. The specialty of this coffee is that the recipe was developed to have the same full-bodied taste, no matter if it is drank as a simple black coffee or with adding milk. The consistent exquisite taste is a result of the unique roasting method used by Tchibo, which in case of Black ‘N White is done three times longer than any of our other coffees.
Noemi Varga, Head of Marketing Hungary & Romania
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