Hoop takes a hop over the Oder
But while analysts tip the firm for growth, its recent performance seems to have gone a little flat.
"We've previously exported only small volumes of drinks to Germany," says Marek Jutkiewicz, Hoop's vice president, explaining that the firm plans a "very broad expansion this year" on the back of the contract. And the economy segment of the German soft drinks market is certainly growing fast, according to TSI's main shareholder, Kay Gerlach. However, this is not necessarily to the benefit of new EU producers.
"In the soft drinks sector, like many others, cost competitiveness depends most on the level of a company's automation," Gerlach reveals. And while most German producers already boast high levels of automation, the same cannot be said for many firms this side of the old Iron Curtain.
However, Hoop's hopes lie in the fact that big retailers are always looking for new players, since the increasing concentration of old EU producers makes it harder for them to dictate terms.
"Sharp new players are more willing to accept lower margins in return for expansion in volume," Gerlach states. But just how much of the market Hoop can corner is debatable.
Certainly, Iwona Sarachman, Coca Cola's local spokesperson, plays down Hoop's potential impact on its German sales, insisting that Coca Cola's top-shelf status should secure it against competition from less established brands.
Regardless, Hoop's hop west follows its acquisition last fall of Russian distributor DH Megapack, a move that has helped Hoop's sales grow by 29 percent in a market generally growing at rates of 25-30 percent (three times the rate in this country). And back home, where it has captured 10 percent of the market, Hoop has also been busy buying up distributors and producers, as well as developing a new economy bottled water brand.
But despite all this, investors seem less than convinced, with the firm's share price continuing to fall. A 50 percent drop in sales during the first three quarters of 2003 was put down to its failure to spot a new trend for 3-liter bottles in 2002, while unfavorable exchange rates have been blamed for losses accrued over the whole of 2003 and Q1 2004. And with recent low sales volumes being attributed to the cold start to the summer, the question remains whether the firm's future really sparkles or whether it's all just fizz.
"We've previously exported only small volumes of drinks to Germany," says Marek Jutkiewicz, Hoop's vice president, explaining that the firm plans a "very broad expansion this year" on the back of the contract. And the economy segment of the German soft drinks market is certainly growing fast, according to TSI's main shareholder, Kay Gerlach. However, this is not necessarily to the benefit of new EU producers.
"In the soft drinks sector, like many others, cost competitiveness depends most on the level of a company's automation," Gerlach reveals. And while most German producers already boast high levels of automation, the same cannot be said for many firms this side of the old Iron Curtain.
However, Hoop's hopes lie in the fact that big retailers are always looking for new players, since the increasing concentration of old EU producers makes it harder for them to dictate terms.
"Sharp new players are more willing to accept lower margins in return for expansion in volume," Gerlach states. But just how much of the market Hoop can corner is debatable.
Certainly, Iwona Sarachman, Coca Cola's local spokesperson, plays down Hoop's potential impact on its German sales, insisting that Coca Cola's top-shelf status should secure it against competition from less established brands.
Regardless, Hoop's hop west follows its acquisition last fall of Russian distributor DH Megapack, a move that has helped Hoop's sales grow by 29 percent in a market generally growing at rates of 25-30 percent (three times the rate in this country). And back home, where it has captured 10 percent of the market, Hoop has also been busy buying up distributors and producers, as well as developing a new economy bottled water brand.
But despite all this, investors seem less than convinced, with the firm's share price continuing to fall. A 50 percent drop in sales during the first three quarters of 2003 was put down to its failure to spot a new trend for 3-liter bottles in 2002, while unfavorable exchange rates have been blamed for losses accrued over the whole of 2003 and Q1 2004. And with recent low sales volumes being attributed to the cold start to the summer, the question remains whether the firm's future really sparkles or whether it's all just fizz.
