Ritter on track in 1999 - Brief Article

Eurofood, Feb 17, 2000

German chocolate producer Ritter said it was satisfied with the development of its sales figures in 1999 but profitability left a lot of room for improvement. Sales director Michael Gahbauer and marketing manager Friedgard Spingler told Lebensmittelzeitung that the key event of the year under review concerned the price of the 100g Ritter Sport bar, which has been sold for DM1 (??0.51) for so many years that a price increase had become almost unthinkable. Eventually, however, the price had to be raised, and it appears that customers have accepted this as inevitable, Gahbauer said. Not that the price hike means Ritter's problems with the Sport brand are over -- the group has been swallowing higher raw material costs for many years and it will be some time before profitability reaches targeted levels. So Ritter is in the black, but the Waldenbuch-based group can only hope to secure its longterm future if profitability improves.

Sales for the year were a little over DM500m, a slight increase on 1998. Most of the improvement came from exports, while domestic turnover was in line with the previous year. In particular, business grew well in Austria, Italy and Scandinavia. Ritter also has a presence in France and Spain -- via a sales partnership with Storck in the latter country. With sales also growing well in the US, the proportion of turnover generated abroad is now approximately 20%, and the company is hoping to grow this side of the business -- where, of course, the DM1 barrier was never an issue.

COMPETITION FROM MARS

At home in Germany the highlights of the year included the strong performance of the new Ritter Cocos coconut variety, as well as the success of the Christmas truffle brands, which were enhanced by two new varieties. Less convincing was the performance of the XXL and Cniss Bits brands, which came under pressure from US competitor Mars' new Amicelli brand. For 2000, Ritter hopes to introduce 40g bars to reinforce its standing in the impulse segment.