The first years
N00271 Towards the Sustainable Region / DQE Project co-financed by the Structural Funds
KRINOS Case Study Athens University of Economics and Business
N00271 Towards the Sustainable Region / DQE Project co-financed by the Structural Funds
The first years The distillery KRINOS J. ANASTASOPOULOS was founded in 1943 producing ouzo, brandy and liquor with the motto “OUR FIRST CARE IS QUALITY”. The founder of the company John K. Anastasopoulos was born at the foot of the Mount Chelmos in the Peloponese where he learned all about the distillation of aniseed flavored ouzo. His wife Chrisoula came from a family with a long tradition of working the currant and the drink that was extracted from it, the “Raisin Brandy”. The distillery that was created by this man was a combination of the tradition of the two families and the restless mind of its founder. From its early years the company started an other production line, that of soft drinks and juices (orange, lemon, soda, gazoze). For this production sector the company exploits the area where the company is located: an internationally known area for its orange and lemon production.
The new generation In 1971 the son of the founder Konstantinos Anastasopoulos takes over the management of the company and calls it J.K. ANASTASOPOULOS & SON C.O. It was then when a new “era” started for the company as the distillery was modernized. The new owner of the company is committed to keeping the traditional recipes while following all the developments in the sector. In 1971 also started the preparation for a new production line which started producing in 1973: the bottled water. In the 70s the sector of bottled water was completely new in Greece and premature for the Greek market. Without the opportunity of making sufficient sales in Greece the international market was targeted. Bottled water was exported to the Middle East, Saudi Arabia, Australia, South Africa etc. In the late 70s another success came along when the export activity in Europe (Germany and France mainly) started. Ouzo, brandy and liquor were the products
N00271 Towards the Sustainable Region / DQE Project co-financed by the Structural Funds
exported in Europe. KRINOS was also the the first Greek company that exported bottled water to Germany. In 1977 KRINOS launched in the market the bottle of water with screw safety cap. At first the cap was made out of aluminum and then it was plastic(PVC). Today the substance used is still plastic but of an evolved type called PET which was used for the first time by KRINOS. These innovations made by a family managed company meant big investments in order to provide the consumers with the best quality that the technology development can provide. In the past for years both the total turnover of the company and its profits increased impressively. In 2001 the turnover of the company was almost 1.8 millions and its profits 11 thousands, in 2004 the company’s turnover was 3.5 million (50% increase) while its profits 106 thousands (90% increase) (Exhibit 1). Konstantinos Anastasopoulos carries on his family tradition being all these years dedicated to the highest quality of his products. With full technological equipment and specialized workforce a 50 year of constantly successful progress has been achieved and one of the most important companies of its sector has been created.
Current situation Today J.K. ANASTASOPOULOS & SON C.O. employs 24 people committed to the company and its goals. The management has created a family environment. Even though some employees do more than one job depending on the needs of the day, the company’s staff needs consist of three job categories: 1. Workers 2. Technicians 3. Management The company also employs a chemist. The staff’s specialization and practical expertise are crucial factors for the success and the development of the company. The management encourages the staff to participate to external seminars in order to develop their skills.
N00271 Towards the Sustainable Region / DQE Project co-financed by the Structural Funds
The contribution of the staff’s expertise to unique quality of the company’s products is very important. The practical skills along with the experience of the staff are some of the company’s strengths that internal communication in the production procedures is well organised according to the HACCP standard. The company is located in Rododafni area near to the city of Aegion (160 km from Athens) and owns premises of 8.000m (water spring, plant, warehouse, offices). The industry uses five automatic bottling lines with the capability of a 30.000 bottle production. The company uses modern technological equipment, follows the technological development of machinery and the factory is modernized when it’s considered necessary. The company also owns 4 trucks for the delivery of the products to its customers. Lately the company has made investments in order to use energy wisely. In order to achieve energy saving a gas burner is used, which replaced the old oil burner. This kind of burner has higher energy efficiency and is friendlier to the environment. It is obvious that production procedures have to be well designed to assure the reliability both of the company and its products. In order to conform with the product design needs of today’s competitive environment the company takes the necessary actions that its economics permit. Manufacturing processes are stable and constantly controlled. Production, storage, delivery safety and hygiene conditions have to be monitored and controlled. All the products are constantly controlled against strict regulations. The company’s products are partially known by the consumers in western Greece than the other regions(less in the rest of the country). The company is considered to have a good image due to the traditional recipes, the quality of its products, the modern facilities owned and the respected hygiene-safety procedures. Marketing activities that are undertaken include advertisement in newspapers, magazines, brochures and a little in TV, participation in food exhibitions. The company expresses its social responsibility by grants to athletic clubs, festivals and other events. Additionally, the mouth to mouth knowledge and the reasonable prices, lower than the competition help to acquire new customers. The company’s customers are mainly Greek wholesalers and retail shops. The most important customers are the wholesalers with a percentage of more than 75% of
N00271 Towards the Sustainable Region / DQE Project co-financed by the Structural Funds
total sales. For the company’s export activities sales are made through importers (30% of alcoholic drinks) of the importing countries who are in this case the most important customers of the company. KRINOS throughout all of these years has established stable relations based on trust with its suppliers of raw materials. The company’s suppliers are Greek companies and most of them work with company for many years. The quality of the raw materials is a very important factor for the company’s success so the suppliers were chosen mostly based on the quality of their products. Its raw materials needs consist of packaging material (bottles and paper boxes), oranges, and lemons for the juices’ line, grapes and alcohol for the alcoholic beverages’ line. For the supplies of glass bottles and paper boxes, the company collaborates with two Greek companies for many years. For the bottles used for the mineral water the company needs one kind of model (preplasma) which was until recently supplied by an Italian company( Perform) and now by a Greek one located in the area of Petra city. Suppliers of natural raw materials (orange, lemon, grapes) are farmers in the region of Achaia which is widely known for its vineyards, lemon and orange groves. The Alcohol needs are covered by Spiliopoulos industry (Patra) for more than 50 year. Krinos collaborates with a number of external designers in order to create packing and labeling that are both modern and unique. The company makes efforts to follow the current standards of design in the sector of drinks. The consumers expect a packing that is strong, light, and easy to carry, open and use. The company’s packing material needs are supplied by reliable suppliers which guaranty an excellent quality. Although quality control of the incoming raw materials is also essential. KRINOS uses packing material (glass, plastic) that can be recycled which is also appreciated by the consumers. The company has been awarded for the quality of its products. In the 80s KRINOS won for two years a golden and a silver award in London. Additionally last year the company won and international award for quality and prestige. Lately the company has established collaboration with a French company for the production of mineral water in 10 liters PET bottles. KRINOS has undertaken the
N00271 Towards the Sustainable Region / DQE Project co-financed by the Structural Funds
production and the machinenery needed are provided by the French company. The only client of the product is the company’s partner company. The company has also recently collaborated with a widely known international whisky brand (CUTTY SHARK) for the launch of an innovative product. It took KRINOS 15 months of research and 3.000 different recipes to design the new product’s final recipe which is an RTD with low alcohol based on whisky of two kinds(YES, NO). The company now produces successfully the product and CUTTY SHARK takes care of all the marketing activities.
Products/ Activities Alcoholic beverage distillers The first production line is that of alcoholic drinks. KRINOS produces ouzo, brandy, liquor and other alcoholic drinks. Ouzo is a 100% Greek product and Greece's National drink. In the traditionally built cooper distillation flasks the excellent aniseed ouzo is produced according to the traditional secret recipes of the Anastasopoulos family. KRINOS produces Ouzo-KRINOS, Ouzo – KEFI and Ouzo-HELLAS. In the production procedure of alcoholic drinks these phases are followed: 1. Collection of marc, 2. storage, 3. mixing, 4. filtering, 5. distillation, 6. bottling, 7. capping, 8. labeling, 9. palletizing, 10. storage.
N00271 Towards the Sustainable Region / DQE Project co-financed by the Structural Funds
For the alcoholic drinks’ line 0, 2 and 0, 7 Litter one way glass bottles are used. The Company exports Ouzo and other alcoholic drinks to Europe. The biggest amount of ouzo sales in Europe is made in Germany where the demand for this traditional Greek drink is quite impressive. KRINOS holds a 13, 5% of Germany’s ouzo market. The volume of total consumption of alcoholic drinks shows low rate of growth. In 1999-2003 the annual rate of growth was 0, 6 %( Exhibit 6). The demand is covered mainly by imported products, with the exceptions of ouzo and brandy. The biggest share in the total domestic consumption of alcoholic drinks is that of whisky with percentage 40, 4% in 2003, second in the list is the ouzo with 25, 7 %( Exhibit 5). During the past three-year period (2001-2003), remarkable is the increase of the consumption of liqueur. The intense competition in the sector, leads the enterprises to the effort of extraction of share from the competitors, which can be achieved with the creation of new products. An important development in sector of drinks is the creation of a new category of products of low alcoholic degree, "ready to drink" drinks (RTD), with high rates of growth. The total domestic consumption of alcoholic drinks is expected to be relatively stable. The mean annual increase rate of consumption is not expected to exceed 1%2%. However, the rates of change differ for the different categories of alcoholic drinks.
Soft drinks Bottlerers The company produces soft drinks and juices exploiting the area’s cultivation of lemons and oranges in order to provide the consumer with the best quality. Its products are: juices (orange and lemon), soda and gazoze. For the production of these products modern production processes are followed using automatic bottling lines. The phases followed are: 1. juice cold storage, 2. mixing,
N00271 Towards the Sustainable Region / DQE Project co-financed by the Structural Funds
3. filtering, 4. carbonizing, 5. bottling in Pet bottles in-house styled, 6. capping, 7. labeling, 8. palletizing, 9. storage For the soft drinks’ line the bottles used are of 0, 25 – 0, 33 – 1, 5 Litters and are either PET (plastic) or one way glass. The market juices in the period 1990 2002 followed a rising course growing at a mean annual rate of 5.6%. During the same period imports of juices, mainly from Cyprus, as well as exports, mainly to Albania, Bulgaria, FYROM and Cyprus, remained at low levels. Their percentage participation as part of total domestic consumption was smaller than 10%. Additionally the average annual rate of increase of apparent domestic consumption of juices was 5.2%. The biggest part of domestic consumption of juices for 2002 involved longlife juices (75.3%), while the remainder (24.7%) involved short-life juices (Exhibit 7). In both categories the 100% natural juices predominate, taking up 49.2% and 86.0% respectively. Furthermore, among the long-life juices, the nectar types made up a 36.1% share in 2002 and fruit drinks a share of 14.7%. Among short-life juices the fruit drinks covered the remaining 14 %.( Exhibit 8) The production of soft drinks during the period 1990 – 2002 showed a mean annual rate of increase of production was 2.6%. In the same time period apparent domestic consumption rose at a mean annual rate of 2.7%. Imports are mainly realized from the United Kingdom and the Scandinavian countries while exports of Greek are destined mainly for Cyprus, Albania, FYROM, Germany, Canada and the USA. The cola types of soft drinks dominate the Greek market with a market share of 56,9% with orangeades following (17.4%), fizzy drinks (11.2%), mixers (6%) and lemon drinks (5.7%), with other-isotonic- athletic drinks making up the difference
N00271 Towards the Sustainable Region / DQE Project co-financed by the Structural Funds
(2.9%).(Exhibit 9)The aim of the companies is to satisfy customer needs and to bolster their market position. A real increase in the consumption of juices is expected by approximately 3% and a small rise in soft drinks of the order of 1% - 2%.
Mineral water A general description for bottled water is "a closed container of any kind in which water is sold for human consumption or from which water sold for human consumption is derived." There are three main types of bottled waters: "Natural Mineral Water (NMW)" is a statutory name for a specific type of water. A NMW must come from a specified ground water source which is protected from all kinds of pollution. The water may not be treated in any way to alter its original chemical and microbiological composition. In addition NMWs must provide certain information on their labels such as the typical mineral analysis. "Spring Water (SW)" is a statutory name for water which comes from a single non-polluted ground water source. Unlike NMWs, Spring Waters may undergo permitted treatments but like NMWs must meet microbiological criteria. Table Water (TW) is the trade name applied to other bottled drinking waters. It applies to water which may come from more than one source and may include the public water supply. Treatment is permitted which results in the water achieving the compositional/microbiological requirements of the regulations. Some companies may also add mineral salts to their waters to replace those minerals lost during treatments or to enhance those which already exist. In the sector of bottled water the company produces natural and carbonated water all the sanitary regulations are followed in order to theprovide the consumers with high quality. The company owns the spring Anastasopoulos in the area of Rododafni and its water of excellent quality. The vertical production line ranges from production of bottles to bottling of water. The phases followed are: 1. pumping,
N00271 Towards the Sustainable Region / DQE Project co-financed by the Structural Funds
2. filtering, 3. carbonizing, 4. bottling in Pet bottles in-house styled, 5. capping, 6. labeling, 7. palletizing, 8. storage. For the bottled water line are used also either PET or one way glass bottles of 0, 25 – 0, 5 – 1, 5 Litters. For the past decade a continuous rising in exports of Greek bottled water has been achieved. The exports of Greek bottled water are characterized by great variability regarding the destined countries. The largest importer of the Greek bottled water is Germany. Germany absorbs about 15% of the total exported quantities. The countries where significant amounts of Greek bottled water are exported are Australia, Cyprus, Israel, Russia and the Arab countries as a whole. The rising export trends are expected to continue in the years to come. The possibilities for Greek bottled water penetration to new markets are huge. The quality of Greek water and the new improved packaging can function as an assurance for achieving the best results. The sector of bottled waters presents high rates of growth, because of the prevailing trend of the consumers to a turn towards a healthy way of diet. As result, the bottled water is preferred by the consumers more compared to other drinks. The growth of the sector is related also to a large extent to the climate’s conditions and the development of tourism. During the months of April and October each year the highest sales of bottled water are realized. Moreover, the insufficiency or the doubts for the quality of tab water in certain regions of the country, benefit the demand of bottled waters. The overall size of the domestic market for bottled water followed a rising course during the period 1995-2004, with an average annual rate of increase of approximately of 10% (in volume terms)(Exhibit 10). In 2004 the market rose by 11, 3% approximately, compared with the previous year. The greater share (71, 2%) of
N00271 Towards the Sustainable Region / DQE Project co-financed by the Structural Funds
consumption of bottled water in 2004 was taken up by the category of natural mineral waters, followed by smaller shares in the categories of table water (24, 3%) and carbonated water (4, 5%). (Exhibit 11) Good are also the prospects of the development of sector for the following years. The growth of consumption of bottled water is forecasted to continue in 20052006, with mean annual rate of growth 8%-10%.
Competitors The sector of alcoholic drinks is characterized by a high degree of concentration and intense competition. The sector is dominated by a small number of companies (most of them belong to multinational groups) which launch their products with powerful commercial brands. Another group of competitors in the sector is that of smaller sized enterprises. Their main activity is the production of ouzo, with few exceptions. The large companies have usually established organised networks of distribution that extend in all Greece, while small sized enterprises are limited mainly to the local markets. In the area of Achaia, where KRINOS industry is placed, there are 6 other companies producing ouzo which mainly belong to the second group of competitors. The sector of juices and soft drinks is characterized by a high degree of concentration and intense competition. The top players are a small number of large and medium enterprises, which are also active in the market of refreshments, because of the reduction that presents the total domestic consumption. These companies have developed strong distribution channels throughout the country and are committed to considerable advertising expenditure to promote their products. On the other hand a lot of small sized local businesses (20 of which located in Achaia), such as KRINOS are based on direct sales to local markets, where their products are recognized and preferred by consumers. This fact is due to their lack of resources to expand their distribution networks and to promote their products, making them recognizable and well known to the broader consuming public. The sector of bottled water is characterized by high degree of concentration, because it is dominated by a small number of enterprises and well known brands
N00271 Towards the Sustainable Region / DQE Project co-financed by the Structural Funds
(AVRA, KORPI, IOLI, ZAGORI, VIKOS). As a result the competition in the market is intense. The companies make great efforts to differentiate their products against those of the competitors (innovating packing, and promoting their product in order to attract the interest of consumers).
Attitude towards DQE Design is a crucial factor for any modern company’s success. It is obvious that production procedures have to be well designed to assure the reliability both of the company and its products. In the modern age packing design has gone way beyond its functional use. First and most importantly the packing must attract the consumer’s attention at the point of purchase. One key factor in getting the consumers attention is having recognizable simple icons that stand out using the following tools: •
Shape
•
Name
•
Illustration
•
Color
Quality is the company’s first priority. Quality control procedures drive all production processes. The Quality of the incoming raw materials is guarantied by the company’s suppliers which have established a relation based on trust with the company. Companies take into account many environmental issues when producing products. They will consider the whole life cycle of the pack and the product as part of the new product development process. This involves the life of the product from inception to final use e.g. acquiring raw materials (for use in the drink or in packaging for the drink); energy production and consumption; product production; packaging production; filling of the pack; the addition of transport packaging; storage and distribution; retailing; consumer use and disposal. The company’s production process and the products needs no use of any dangerous substances. Waste is packaging material (paper and plastic) which is
N00271 Towards the Sustainable Region / DQE Project co-financed by the Structural Funds
recycled to respective manufacturers. Customers are also guided to recycle packaging materials. All packaging used by the soft drinks industry can be recycled and/or re-used to make other useful products. For example: •
aluminium cans are recycled and used with raw material to produce new batches of cans;
•
plastic bottles can be used to make fleece textile products, fibre filling and street furniture;
•
glass bottles can be reused or recycled to use in the production of new glass; and
•
Paper and board is recycled to produce tissue, paper bags, chip board, briefcases and office furniture.
Additionally the water which is used for the necessary cleaning it is used by the local farmers to water their fields.
The company’s future The company has always been committed to its tradition. Its focus on the quality of its products and the consumer satisfaction has led the company to create a very good image and prestige. For the future, the company is challenged to face the intense competition of both the national and international market. The management is aware of the difficulty of this task and is committed to a future of continuous effort. Konstantinos Anastasopoulos expresses his goals for the future to be: “Continuous quality improvement along with the improvement of the company’s position among its competitors.” The owner of the company also considers crucial for KRINOS the modernization of its equipment in order to achieve a more efficient production and a better quality and reliability of its products.
N00271 Towards the Sustainable Region / DQE Project co-financed by the Structural Funds
Exhibits Exhibit1: Economic results of KRINOS Year
SALES
2001
2002
2003
2004
815.546
923.816
137.640
2.106.293
Total b.Sales abroad EU countries Non-EU countries
815.546
923.816
137.640
2.106.293
638.788 46.995
601.888 9.583
672.092 182.837
690.963 38.870
Total sales
685.783
611.471
854.929
729.833
1.501.329
153.287
2.222.569
2.746.126
287.241
397.386 396.725 1.932.673
463.750
794.340
2.686.319
3.540.466
a.Sales in Greece Total sales in Greece
TOTAL SALES Remaining Income Stock Packaging material
1.788.570
4.000.000 3.500.000 3.000.000 2.500.000 Σειρά1
2.000.000 1.500.000 1.000.000 500.000 0 1
2
3
4
N00271 Towards the Sustainable Region / DQE Project co-financed by the Structural Funds
Total Turnover
Year Total Turnover cost sold
Plus mixed cost of exploitation Management Expences Research Expences functional result Minus result pre interest and dampings Minus interest of long-term loans interest of short-term loans result pre dampings and taxes Dampings result pre taxes disposal of net profits mixed dividend
2001 1.788.491 1.673.489 110.109
2002 1.932.014 1.673.139 50.103
2003 2.686.310 91.498 510.293
2004 3.540.467 3.153.890 120.873
225.111
305.978
69.931
507.450
21.872
47.495
131.052
106.188
143.513
155.452
131.052
173.935
59.726 4.933
103.031 39.797
309.310 37.288
227.327 28.072
54.793
63.234
272.022
199.255
43.385
39.797
11.409 0
23.437 0
272.022 0
175.242 0
11409
23.437
272.022
175.242
11.269
50.208
69.576
105.500
24.013
N00271 Towards the Sustainable Region / DQE Project co-financed by the Structural Funds
Exhibit 2: Greek Exports by Commodity Source: Greek National Statistical Service
Categories Items
December 2000
December 2001
December 2002
1,2
1,3
5,1
887,2
1016,9
976,1
1072,9
1206,5
1115,2
123,6 404,8
129,2 388,6
119,6 380,6
26,6
31,6
31,1
Raw Memi Finished Products
386,3
380,2
292,1
Raw Hides Leather Lumber Other
20,8 7,5 358
32,3 7,9 340
25,9 6,6 259,6
214,4 0,5 213,9
214,2 0,4 213,8
225,9 2,1 223,8
Petroleum Products
1687,4
1298,4
922,5
Industrial Products Textile
5862,8 423,8
6298,6 439,3
6877,4 492,6
Chemicals
443
408,3
448,1
253,2 270,6
352,6 309,9
274 382,4
1077,4
1325,2
1261,6
Machinery & Equipment
359,2
405,3
512,1
Appliances & Instruments
895,4
859
805,2
190,3 52,5 1493,1 31,2 42,2 330,9
192,7 52,6 1528,9 35,3 52,9 336,6
249 59,9 1450,8 35,8 34,3 282,4
Other Items
474,9
714,6
589,2
Grand Total
11142,1
11680,1
10945,6
Livestock Food Products Fruits & Vegetables Beverages Tobacco Livestock Feeds
Ores & Minerals Coal Other
Pharmaceuticals Plastics Metals & Products
Transportation Furniture Garments Shoes Fur Other
N00271 Towards the Sustainable Region / DQE Project co-financed by the Structural Funds
Exhibit 3: Greek Exports by Country Source: Greek National Statistical Service
Country OECD Countries E.U France Belgium & Luxembourg Netherlands Germany Italy U.Kingdom Ireland Denmark Portugal Spain Sweden Finland Austria Non defined countries Other European OECD Countries Other OECD Countries East Europe OPEC Countries Other Countries
December 2000
December 2001
December 2002
6579,4 5004,8 382,7
6327,6 4882,1 428,3
6240,5 4963,6 390,8
153 327,3 1411,4 1049 732,6 38,4 79,4 71,8 348 143,5 176,2 91,6
122,9 286 1313,8 978,1 9221 40,1 94,7 78,6 374,3 110,6 55,6 77
119,1 429,7 1141,8 929,1 681,2 27,4 72,2 67,1 274,8 98,8 37,4 79,3
-
-
614,9
720,8
577,6
499,8
853,8
867,9
777,1
1716,6
2121,7
1890,4
300
384,6
385,8
2913,4
2846,2
2428,9
N00271 Towards the Sustainable Region / DQE Project co-financed by the Structural Funds
Exhibit 4: The main importers of distilled alcoholic beverages from Greece
Country Germany Fmr Macedonia Belgium Netherlands SerbiaMontenegro Croatia United Kingdom Bulgaria Cyprus USA
Tons % of Total 3746 457 195 177
32.6 7 4.9 4.9
191 198
4.8 4,7
300 64 210 283
4.3 4.1 3.5 3.5
Alcoholic Drinks Market Exhibit 5 Structure of alcoholic drinks market by category
Whisky Vodka Ouzo Gin Rum Brandy
Source: ICAP
N00271 Towards the Sustainable Region / DQE Project co-financed by the Structural Funds
Exhibit 6
Source: ICAP
Soft Drinks and Juices Market Exhibit 7: Structure of apperent consuption of long-life juices
100% Fruit juice Fruit-drink
Source: ICAP
N00271 Towards the Sustainable Region / DQE Project co-financed by the Structural Funds
Exhibit 8: Structure of apparent consuption of short-life juices
100% Fruit juice Fruit-drink Nectar
Exhibit 9:
Structure of apparent cosuption of soft drinks Cola Orange Fizzy Mixers Lemon Other Athletic Isotonic
Source: ICAP
N00271 Towards the Sustainable Region / DQE Project co-financed by the Structural Funds
Bottled water Market Exhibit 10: Structure of the market of bottled water
Table water Corbonated water Natural mineral water
Source: ICAP
Exhibit 11:
N00271 Towards the Sustainable Region / DQE Project co-financed by the Structural Funds
Exhibit 12:
Political –Leagal factors The common (euro) Liberasation of the European markets Hygiene and safety standards
Economic trends Globalization and Regionalization Competition and Consolidation GDP per capita New delivery methods
Social trends Population dynamics Health nutrition and safety concerns Environmental and ethical concerns Migration and demand for “ethnic drinks” Unemployment
Technological trends Application of ICT Development packing materials Development of production equipment
Safety and environmental trends Food safety Green Procurement Recycling methods
KRINOS Case Study Athens University of Economics and Business
N00271 Towards the Sustainable Region / DQE Project co-financed by the Structural Funds
The first years The distillery KRINOS J. ANASTASOPOULOS was founded in 1943 producing ouzo, brandy and liquor with the motto “OUR FIRST CARE IS QUALITY”. The founder of the company John K. Anastasopoulos was born at the foot of the Mount Chelmos in the Peloponese where he learned all about the distillation of aniseed flavored ouzo. His wife Chrisoula came from a family with a long tradition of working the currant and the drink that was extracted from it, the “Raisin Brandy”. The distillery that was created by this man was a combination of the tradition of the two families and the restless mind of its founder. From its early years the company started an other production line, that of soft drinks and juices (orange, lemon, soda, gazoze). For this production sector the company exploits the area where the company is located: an internationally known area for its orange and lemon production.
The new generation In 1971 the son of the founder Konstantinos Anastasopoulos takes over the management of the company and calls it J.K. ANASTASOPOULOS & SON C.O. It was then when a new “era” started for the company as the distillery was modernized. The new owner of the company is committed to keeping the traditional recipes while following all the developments in the sector. In 1971 also started the preparation for a new production line which started producing in 1973: the bottled water. In the 70s the sector of bottled water was completely new in Greece and premature for the Greek market. Without the opportunity of making sufficient sales in Greece the international market was targeted. Bottled water was exported to the Middle East, Saudi Arabia, Australia, South Africa etc. In the late 70s another success came along when the export activity in Europe (Germany and France mainly) started. Ouzo, brandy and liquor were the products
N00271 Towards the Sustainable Region / DQE Project co-financed by the Structural Funds
exported in Europe. KRINOS was also the the first Greek company that exported bottled water to Germany. In 1977 KRINOS launched in the market the bottle of water with screw safety cap. At first the cap was made out of aluminum and then it was plastic(PVC). Today the substance used is still plastic but of an evolved type called PET which was used for the first time by KRINOS. These innovations made by a family managed company meant big investments in order to provide the consumers with the best quality that the technology development can provide. In the past for years both the total turnover of the company and its profits increased impressively. In 2001 the turnover of the company was almost 1.8 millions and its profits 11 thousands, in 2004 the company’s turnover was 3.5 million (50% increase) while its profits 106 thousands (90% increase) (Exhibit 1). Konstantinos Anastasopoulos carries on his family tradition being all these years dedicated to the highest quality of his products. With full technological equipment and specialized workforce a 50 year of constantly successful progress has been achieved and one of the most important companies of its sector has been created.
Current situation Today J.K. ANASTASOPOULOS & SON C.O. employs 24 people committed to the company and its goals. The management has created a family environment. Even though some employees do more than one job depending on the needs of the day, the company’s staff needs consist of three job categories: 1. Workers 2. Technicians 3. Management The company also employs a chemist. The staff’s specialization and practical expertise are crucial factors for the success and the development of the company. The management encourages the staff to participate to external seminars in order to develop their skills.
N00271 Towards the Sustainable Region / DQE Project co-financed by the Structural Funds
The contribution of the staff’s expertise to unique quality of the company’s products is very important. The practical skills along with the experience of the staff are some of the company’s strengths that internal communication in the production procedures is well organised according to the HACCP standard. The company is located in Rododafni area near to the city of Aegion (160 km from Athens) and owns premises of 8.000m (water spring, plant, warehouse, offices). The industry uses five automatic bottling lines with the capability of a 30.000 bottle production. The company uses modern technological equipment, follows the technological development of machinery and the factory is modernized when it’s considered necessary. The company also owns 4 trucks for the delivery of the products to its customers. Lately the company has made investments in order to use energy wisely. In order to achieve energy saving a gas burner is used, which replaced the old oil burner. This kind of burner has higher energy efficiency and is friendlier to the environment. It is obvious that production procedures have to be well designed to assure the reliability both of the company and its products. In order to conform with the product design needs of today’s competitive environment the company takes the necessary actions that its economics permit. Manufacturing processes are stable and constantly controlled. Production, storage, delivery safety and hygiene conditions have to be monitored and controlled. All the products are constantly controlled against strict regulations. The company’s products are partially known by the consumers in western Greece than the other regions(less in the rest of the country). The company is considered to have a good image due to the traditional recipes, the quality of its products, the modern facilities owned and the respected hygiene-safety procedures. Marketing activities that are undertaken include advertisement in newspapers, magazines, brochures and a little in TV, participation in food exhibitions. The company expresses its social responsibility by grants to athletic clubs, festivals and other events. Additionally, the mouth to mouth knowledge and the reasonable prices, lower than the competition help to acquire new customers. The company’s customers are mainly Greek wholesalers and retail shops. The most important customers are the wholesalers with a percentage of more than 75% of
N00271 Towards the Sustainable Region / DQE Project co-financed by the Structural Funds
total sales. For the company’s export activities sales are made through importers (30% of alcoholic drinks) of the importing countries who are in this case the most important customers of the company. KRINOS throughout all of these years has established stable relations based on trust with its suppliers of raw materials. The company’s suppliers are Greek companies and most of them work with company for many years. The quality of the raw materials is a very important factor for the company’s success so the suppliers were chosen mostly based on the quality of their products. Its raw materials needs consist of packaging material (bottles and paper boxes), oranges, and lemons for the juices’ line, grapes and alcohol for the alcoholic beverages’ line. For the supplies of glass bottles and paper boxes, the company collaborates with two Greek companies for many years. For the bottles used for the mineral water the company needs one kind of model (preplasma) which was until recently supplied by an Italian company( Perform) and now by a Greek one located in the area of Petra city. Suppliers of natural raw materials (orange, lemon, grapes) are farmers in the region of Achaia which is widely known for its vineyards, lemon and orange groves. The Alcohol needs are covered by Spiliopoulos industry (Patra) for more than 50 year. Krinos collaborates with a number of external designers in order to create packing and labeling that are both modern and unique. The company makes efforts to follow the current standards of design in the sector of drinks. The consumers expect a packing that is strong, light, and easy to carry, open and use. The company’s packing material needs are supplied by reliable suppliers which guaranty an excellent quality. Although quality control of the incoming raw materials is also essential. KRINOS uses packing material (glass, plastic) that can be recycled which is also appreciated by the consumers. The company has been awarded for the quality of its products. In the 80s KRINOS won for two years a golden and a silver award in London. Additionally last year the company won and international award for quality and prestige. Lately the company has established collaboration with a French company for the production of mineral water in 10 liters PET bottles. KRINOS has undertaken the
N00271 Towards the Sustainable Region / DQE Project co-financed by the Structural Funds
production and the machinenery needed are provided by the French company. The only client of the product is the company’s partner company. The company has also recently collaborated with a widely known international whisky brand (CUTTY SHARK) for the launch of an innovative product. It took KRINOS 15 months of research and 3.000 different recipes to design the new product’s final recipe which is an RTD with low alcohol based on whisky of two kinds(YES, NO). The company now produces successfully the product and CUTTY SHARK takes care of all the marketing activities.
Products/ Activities Alcoholic beverage distillers The first production line is that of alcoholic drinks. KRINOS produces ouzo, brandy, liquor and other alcoholic drinks. Ouzo is a 100% Greek product and Greece's National drink. In the traditionally built cooper distillation flasks the excellent aniseed ouzo is produced according to the traditional secret recipes of the Anastasopoulos family. KRINOS produces Ouzo-KRINOS, Ouzo – KEFI and Ouzo-HELLAS. In the production procedure of alcoholic drinks these phases are followed: 1. Collection of marc, 2. storage, 3. mixing, 4. filtering, 5. distillation, 6. bottling, 7. capping, 8. labeling, 9. palletizing, 10. storage.
N00271 Towards the Sustainable Region / DQE Project co-financed by the Structural Funds
For the alcoholic drinks’ line 0, 2 and 0, 7 Litter one way glass bottles are used. The Company exports Ouzo and other alcoholic drinks to Europe. The biggest amount of ouzo sales in Europe is made in Germany where the demand for this traditional Greek drink is quite impressive. KRINOS holds a 13, 5% of Germany’s ouzo market. The volume of total consumption of alcoholic drinks shows low rate of growth. In 1999-2003 the annual rate of growth was 0, 6 %( Exhibit 6). The demand is covered mainly by imported products, with the exceptions of ouzo and brandy. The biggest share in the total domestic consumption of alcoholic drinks is that of whisky with percentage 40, 4% in 2003, second in the list is the ouzo with 25, 7 %( Exhibit 5). During the past three-year period (2001-2003), remarkable is the increase of the consumption of liqueur. The intense competition in the sector, leads the enterprises to the effort of extraction of share from the competitors, which can be achieved with the creation of new products. An important development in sector of drinks is the creation of a new category of products of low alcoholic degree, "ready to drink" drinks (RTD), with high rates of growth. The total domestic consumption of alcoholic drinks is expected to be relatively stable. The mean annual increase rate of consumption is not expected to exceed 1%2%. However, the rates of change differ for the different categories of alcoholic drinks.
Soft drinks Bottlerers The company produces soft drinks and juices exploiting the area’s cultivation of lemons and oranges in order to provide the consumer with the best quality. Its products are: juices (orange and lemon), soda and gazoze. For the production of these products modern production processes are followed using automatic bottling lines. The phases followed are: 1. juice cold storage, 2. mixing,
N00271 Towards the Sustainable Region / DQE Project co-financed by the Structural Funds
3. filtering, 4. carbonizing, 5. bottling in Pet bottles in-house styled, 6. capping, 7. labeling, 8. palletizing, 9. storage For the soft drinks’ line the bottles used are of 0, 25 – 0, 33 – 1, 5 Litters and are either PET (plastic) or one way glass. The market juices in the period 1990 2002 followed a rising course growing at a mean annual rate of 5.6%. During the same period imports of juices, mainly from Cyprus, as well as exports, mainly to Albania, Bulgaria, FYROM and Cyprus, remained at low levels. Their percentage participation as part of total domestic consumption was smaller than 10%. Additionally the average annual rate of increase of apparent domestic consumption of juices was 5.2%. The biggest part of domestic consumption of juices for 2002 involved longlife juices (75.3%), while the remainder (24.7%) involved short-life juices (Exhibit 7). In both categories the 100% natural juices predominate, taking up 49.2% and 86.0% respectively. Furthermore, among the long-life juices, the nectar types made up a 36.1% share in 2002 and fruit drinks a share of 14.7%. Among short-life juices the fruit drinks covered the remaining 14 %.( Exhibit 8) The production of soft drinks during the period 1990 – 2002 showed a mean annual rate of increase of production was 2.6%. In the same time period apparent domestic consumption rose at a mean annual rate of 2.7%. Imports are mainly realized from the United Kingdom and the Scandinavian countries while exports of Greek are destined mainly for Cyprus, Albania, FYROM, Germany, Canada and the USA. The cola types of soft drinks dominate the Greek market with a market share of 56,9% with orangeades following (17.4%), fizzy drinks (11.2%), mixers (6%) and lemon drinks (5.7%), with other-isotonic- athletic drinks making up the difference
N00271 Towards the Sustainable Region / DQE Project co-financed by the Structural Funds
(2.9%).(Exhibit 9)The aim of the companies is to satisfy customer needs and to bolster their market position. A real increase in the consumption of juices is expected by approximately 3% and a small rise in soft drinks of the order of 1% - 2%.
Mineral water A general description for bottled water is "a closed container of any kind in which water is sold for human consumption or from which water sold for human consumption is derived." There are three main types of bottled waters: "Natural Mineral Water (NMW)" is a statutory name for a specific type of water. A NMW must come from a specified ground water source which is protected from all kinds of pollution. The water may not be treated in any way to alter its original chemical and microbiological composition. In addition NMWs must provide certain information on their labels such as the typical mineral analysis. "Spring Water (SW)" is a statutory name for water which comes from a single non-polluted ground water source. Unlike NMWs, Spring Waters may undergo permitted treatments but like NMWs must meet microbiological criteria. Table Water (TW) is the trade name applied to other bottled drinking waters. It applies to water which may come from more than one source and may include the public water supply. Treatment is permitted which results in the water achieving the compositional/microbiological requirements of the regulations. Some companies may also add mineral salts to their waters to replace those minerals lost during treatments or to enhance those which already exist. In the sector of bottled water the company produces natural and carbonated water all the sanitary regulations are followed in order to theprovide the consumers with high quality. The company owns the spring Anastasopoulos in the area of Rododafni and its water of excellent quality. The vertical production line ranges from production of bottles to bottling of water. The phases followed are: 1. pumping,
N00271 Towards the Sustainable Region / DQE Project co-financed by the Structural Funds
2. filtering, 3. carbonizing, 4. bottling in Pet bottles in-house styled, 5. capping, 6. labeling, 7. palletizing, 8. storage. For the bottled water line are used also either PET or one way glass bottles of 0, 25 – 0, 5 – 1, 5 Litters. For the past decade a continuous rising in exports of Greek bottled water has been achieved. The exports of Greek bottled water are characterized by great variability regarding the destined countries. The largest importer of the Greek bottled water is Germany. Germany absorbs about 15% of the total exported quantities. The countries where significant amounts of Greek bottled water are exported are Australia, Cyprus, Israel, Russia and the Arab countries as a whole. The rising export trends are expected to continue in the years to come. The possibilities for Greek bottled water penetration to new markets are huge. The quality of Greek water and the new improved packaging can function as an assurance for achieving the best results. The sector of bottled waters presents high rates of growth, because of the prevailing trend of the consumers to a turn towards a healthy way of diet. As result, the bottled water is preferred by the consumers more compared to other drinks. The growth of the sector is related also to a large extent to the climate’s conditions and the development of tourism. During the months of April and October each year the highest sales of bottled water are realized. Moreover, the insufficiency or the doubts for the quality of tab water in certain regions of the country, benefit the demand of bottled waters. The overall size of the domestic market for bottled water followed a rising course during the period 1995-2004, with an average annual rate of increase of approximately of 10% (in volume terms)(Exhibit 10). In 2004 the market rose by 11, 3% approximately, compared with the previous year. The greater share (71, 2%) of
N00271 Towards the Sustainable Region / DQE Project co-financed by the Structural Funds
consumption of bottled water in 2004 was taken up by the category of natural mineral waters, followed by smaller shares in the categories of table water (24, 3%) and carbonated water (4, 5%). (Exhibit 11) Good are also the prospects of the development of sector for the following years. The growth of consumption of bottled water is forecasted to continue in 20052006, with mean annual rate of growth 8%-10%.
Competitors The sector of alcoholic drinks is characterized by a high degree of concentration and intense competition. The sector is dominated by a small number of companies (most of them belong to multinational groups) which launch their products with powerful commercial brands. Another group of competitors in the sector is that of smaller sized enterprises. Their main activity is the production of ouzo, with few exceptions. The large companies have usually established organised networks of distribution that extend in all Greece, while small sized enterprises are limited mainly to the local markets. In the area of Achaia, where KRINOS industry is placed, there are 6 other companies producing ouzo which mainly belong to the second group of competitors. The sector of juices and soft drinks is characterized by a high degree of concentration and intense competition. The top players are a small number of large and medium enterprises, which are also active in the market of refreshments, because of the reduction that presents the total domestic consumption. These companies have developed strong distribution channels throughout the country and are committed to considerable advertising expenditure to promote their products. On the other hand a lot of small sized local businesses (20 of which located in Achaia), such as KRINOS are based on direct sales to local markets, where their products are recognized and preferred by consumers. This fact is due to their lack of resources to expand their distribution networks and to promote their products, making them recognizable and well known to the broader consuming public. The sector of bottled water is characterized by high degree of concentration, because it is dominated by a small number of enterprises and well known brands
N00271 Towards the Sustainable Region / DQE Project co-financed by the Structural Funds
(AVRA, KORPI, IOLI, ZAGORI, VIKOS). As a result the competition in the market is intense. The companies make great efforts to differentiate their products against those of the competitors (innovating packing, and promoting their product in order to attract the interest of consumers).
Attitude towards DQE Design is a crucial factor for any modern company’s success. It is obvious that production procedures have to be well designed to assure the reliability both of the company and its products. In the modern age packing design has gone way beyond its functional use. First and most importantly the packing must attract the consumer’s attention at the point of purchase. One key factor in getting the consumers attention is having recognizable simple icons that stand out using the following tools: •
Shape
•
Name
•
Illustration
•
Color
Quality is the company’s first priority. Quality control procedures drive all production processes. The Quality of the incoming raw materials is guarantied by the company’s suppliers which have established a relation based on trust with the company. Companies take into account many environmental issues when producing products. They will consider the whole life cycle of the pack and the product as part of the new product development process. This involves the life of the product from inception to final use e.g. acquiring raw materials (for use in the drink or in packaging for the drink); energy production and consumption; product production; packaging production; filling of the pack; the addition of transport packaging; storage and distribution; retailing; consumer use and disposal. The company’s production process and the products needs no use of any dangerous substances. Waste is packaging material (paper and plastic) which is
N00271 Towards the Sustainable Region / DQE Project co-financed by the Structural Funds
recycled to respective manufacturers. Customers are also guided to recycle packaging materials. All packaging used by the soft drinks industry can be recycled and/or re-used to make other useful products. For example: •
aluminium cans are recycled and used with raw material to produce new batches of cans;
•
plastic bottles can be used to make fleece textile products, fibre filling and street furniture;
•
glass bottles can be reused or recycled to use in the production of new glass; and
•
Paper and board is recycled to produce tissue, paper bags, chip board, briefcases and office furniture.
Additionally the water which is used for the necessary cleaning it is used by the local farmers to water their fields.
The company’s future The company has always been committed to its tradition. Its focus on the quality of its products and the consumer satisfaction has led the company to create a very good image and prestige. For the future, the company is challenged to face the intense competition of both the national and international market. The management is aware of the difficulty of this task and is committed to a future of continuous effort. Konstantinos Anastasopoulos expresses his goals for the future to be: “Continuous quality improvement along with the improvement of the company’s position among its competitors.” The owner of the company also considers crucial for KRINOS the modernization of its equipment in order to achieve a more efficient production and a better quality and reliability of its products.
N00271 Towards the Sustainable Region / DQE Project co-financed by the Structural Funds
Exhibits Exhibit1: Economic results of KRINOS Year
SALES
2001
2002
2003
2004
815.546
923.816
137.640
2.106.293
Total b.Sales abroad EU countries Non-EU countries
815.546
923.816
137.640
2.106.293
638.788 46.995
601.888 9.583
672.092 182.837
690.963 38.870
Total sales
685.783
611.471
854.929
729.833
1.501.329
153.287
2.222.569
2.746.126
287.241
397.386 396.725 1.932.673
463.750
794.340
2.686.319
3.540.466
a.Sales in Greece Total sales in Greece
TOTAL SALES Remaining Income Stock Packaging material
1.788.570
4.000.000 3.500.000 3.000.000 2.500.000 Σειρά1
2.000.000 1.500.000 1.000.000 500.000 0 1
2
3
4
N00271 Towards the Sustainable Region / DQE Project co-financed by the Structural Funds
Total Turnover
Year Total Turnover cost sold
Plus mixed cost of exploitation Management Expences Research Expences functional result Minus result pre interest and dampings Minus interest of long-term loans interest of short-term loans result pre dampings and taxes Dampings result pre taxes disposal of net profits mixed dividend
2001 1.788.491 1.673.489 110.109
2002 1.932.014 1.673.139 50.103
2003 2.686.310 91.498 510.293
2004 3.540.467 3.153.890 120.873
225.111
305.978
69.931
507.450
21.872
47.495
131.052
106.188
143.513
155.452
131.052
173.935
59.726 4.933
103.031 39.797
309.310 37.288
227.327 28.072
54.793
63.234
272.022
199.255
43.385
39.797
11.409 0
23.437 0
272.022 0
175.242 0
11409
23.437
272.022
175.242
11.269
50.208
69.576
105.500
24.013
N00271 Towards the Sustainable Region / DQE Project co-financed by the Structural Funds
Exhibit 2: Greek Exports by Commodity Source: Greek National Statistical Service
Categories Items
December 2000
December 2001
December 2002
1,2
1,3
5,1
887,2
1016,9
976,1
1072,9
1206,5
1115,2
123,6 404,8
129,2 388,6
119,6 380,6
26,6
31,6
31,1
Raw Memi Finished Products
386,3
380,2
292,1
Raw Hides Leather Lumber Other
20,8 7,5 358
32,3 7,9 340
25,9 6,6 259,6
214,4 0,5 213,9
214,2 0,4 213,8
225,9 2,1 223,8
Petroleum Products
1687,4
1298,4
922,5
Industrial Products Textile
5862,8 423,8
6298,6 439,3
6877,4 492,6
Chemicals
443
408,3
448,1
253,2 270,6
352,6 309,9
274 382,4
1077,4
1325,2
1261,6
Machinery & Equipment
359,2
405,3
512,1
Appliances & Instruments
895,4
859
805,2
190,3 52,5 1493,1 31,2 42,2 330,9
192,7 52,6 1528,9 35,3 52,9 336,6
249 59,9 1450,8 35,8 34,3 282,4
Other Items
474,9
714,6
589,2
Grand Total
11142,1
11680,1
10945,6
Livestock Food Products Fruits & Vegetables Beverages Tobacco Livestock Feeds
Ores & Minerals Coal Other
Pharmaceuticals Plastics Metals & Products
Transportation Furniture Garments Shoes Fur Other
N00271 Towards the Sustainable Region / DQE Project co-financed by the Structural Funds
Exhibit 3: Greek Exports by Country Source: Greek National Statistical Service
Country OECD Countries E.U France Belgium & Luxembourg Netherlands Germany Italy U.Kingdom Ireland Denmark Portugal Spain Sweden Finland Austria Non defined countries Other European OECD Countries Other OECD Countries East Europe OPEC Countries Other Countries
December 2000
December 2001
December 2002
6579,4 5004,8 382,7
6327,6 4882,1 428,3
6240,5 4963,6 390,8
153 327,3 1411,4 1049 732,6 38,4 79,4 71,8 348 143,5 176,2 91,6
122,9 286 1313,8 978,1 9221 40,1 94,7 78,6 374,3 110,6 55,6 77
119,1 429,7 1141,8 929,1 681,2 27,4 72,2 67,1 274,8 98,8 37,4 79,3
-
-
614,9
720,8
577,6
499,8
853,8
867,9
777,1
1716,6
2121,7
1890,4
300
384,6
385,8
2913,4
2846,2
2428,9
N00271 Towards the Sustainable Region / DQE Project co-financed by the Structural Funds
Exhibit 4: The main importers of distilled alcoholic beverages from Greece
Country Germany Fmr Macedonia Belgium Netherlands SerbiaMontenegro Croatia United Kingdom Bulgaria Cyprus USA
Tons % of Total 3746 457 195 177
32.6 7 4.9 4.9
191 198
4.8 4,7
300 64 210 283
4.3 4.1 3.5 3.5
Alcoholic Drinks Market Exhibit 5 Structure of alcoholic drinks market by category
Whisky Vodka Ouzo Gin Rum Brandy
Source: ICAP
N00271 Towards the Sustainable Region / DQE Project co-financed by the Structural Funds
Exhibit 6
Source: ICAP
Soft Drinks and Juices Market Exhibit 7: Structure of apperent consuption of long-life juices
100% Fruit juice Fruit-drink
Source: ICAP
N00271 Towards the Sustainable Region / DQE Project co-financed by the Structural Funds
Exhibit 8: Structure of apparent consuption of short-life juices
100% Fruit juice Fruit-drink Nectar
Exhibit 9:
Structure of apparent cosuption of soft drinks Cola Orange Fizzy Mixers Lemon Other Athletic Isotonic
Source: ICAP
N00271 Towards the Sustainable Region / DQE Project co-financed by the Structural Funds
Bottled water Market Exhibit 10: Structure of the market of bottled water
Table water Corbonated water Natural mineral water
Source: ICAP
Exhibit 11:
N00271 Towards the Sustainable Region / DQE Project co-financed by the Structural Funds
Exhibit 12:
Political –Leagal factors The common (euro) Liberasation of the European markets Hygiene and safety standards
Economic trends Globalization and Regionalization Competition and Consolidation GDP per capita New delivery methods
Social trends Population dynamics Health nutrition and safety concerns Environmental and ethical concerns Migration and demand for “ethnic drinks” Unemployment
Technological trends Application of ICT Development packing materials Development of production equipment
Safety and environmental trends Food safety Green Procurement Recycling methods
