Sausages, Bockwurst sausages, Vienna sausages, deli meat, convenience meat products, dumplings and pancakes – a total of more than 140 items under the “OKRAINA” brand are well known in the Northwestern region and far outside it. Over the 18 years of its existence, this small meat processing plant became one of the most advanced food production companies in Murmansk Oblast. Anton Kazinov, CEO of the company, told us about the sector’s current condition, about how the customer loyalty is earned and how sustainable development is achieved.
What do you think about the meat production market in your region? What is missing in your opinion? What trends do you see in Russian market?
– The regional markets sometimes seem to be less active, but it is far from true. After the entry of retail chains, our Murmansk market became highly competitive, with supply surpassing the demand. This is also true for the Russian market as a whole. One of the interesting trends is the shifting of the consumer demand towards fresh products.
Russian meat processing is reportedly 15 years behind Europe. Do you agree with this statement?
– To say that we are 15 years behind would be incorrect. Europe has a different culture of consumption and demand structure. Our markets are very different, and different products are demanded. I guess we are behind them in terms of processing equipment and spices. However, I can argue about the product quality.
As far as I understand, you were focused on the quality from the very beginning.
– Yes, we decided to produce expensive and high quality products which can be presented to our families without being ashamed of it. The first small batch of products was intended to be sold in our own retail chain. The price of our sausages was higher compared to the other manufacturers, but they went off like hot cakes. We started with a tonne of products per day, and in the first three years increased the production to 7–8 tonnes. This was a success! After that we expanded establishing a convenience product plant, a confectionery production facility, a salad and deli production facility, our own food supply chain… Today “OKRAINA” has three production sites in Murmansk: a meat processing plant, a dry sausage plant and a convenience product plant.
Did the economic events from the last few years make you reconsider your approaches to the product quality?
– The crisis affected our company, of course. However, quality reduction was never considered. We took a harder road instead – product range optimization, reduction of profitability and costs.
Can the deli meat products produced by “OKRAINA” be found in other regions of Russia?
– Murmansk market is limited. It has a negative growth due to the fact that people are constantly leaving the Extreme North. That’s why in 2013, we decided to expand to the Leningrad Oblast market which is close to us not only by distance but by heart too. The other reason was that many people from Murmansk going to Saint Petersburg took our products with them. In 2014, we launched our products in “O’KEY” hypermarkets, and after that in other retail chains of Saint Petersburg. Currently, “OKRAINA” holds a prominent position in the Northwestern region of Russia: Leningrad Oblast, Petrozavodsk, Veliky Novgorod, Pskov. Through the “Metro Cash & Carry” hypermarket chain, our products are present in over 40 regions of Russia: from Kaliningrad to Vladivostok. Surprisingly enough, the products of “OKRAINA” are in good demand even in the “meat” regions with their own production and strong players!
What other retailers do you cooperate with, besides the ones mentioned above?
– Almost with all of them. We work with the largest federal chains “Magnet”, “Х5 Retail Group”, “Lenta”, “Intertorg”, “Dixie”, “Prizma”, “LAND”, “Azbuka Vkusa”, etc. We are actively working with an international store chain and “Circle Key” shops. We work with all local retail chains in our region and with the large local chains in Saint Petersburg oriented on the consumer level of our price segment. The market is moving towards consolidation, and we often have to work with distribution centers (DC).
Which business development trends are the most promising in your opinion?
– We are currently examining the practicability of building a new plant in Leningrad Oblast because we are very much interested in Saint Petersburg market. One of our key tasks today, of course, is the development of our own online stores in the big cities of the Northwestern Federal District. We are also actively working with the HoReCa segment, and we have developed a unique product range for this channel.
Have you thought of exporting your products?
– Let me tell you a little secret: yes, we are planning to expand to European markets because of the requests by our partners from Finland and Norway for product supply. Particularly, they want to buy our dry and hard smoked sausages which are one of our highly effective projects. However, it’s too early to speak about this in details.
Have you participated in any municipal or national business support programs?
– No, we haven’t. We are depending only on our own abilities, knowledge and professionalism.
Please tell us about the choice of equipment and raw materials for your production. Do you prefer foreign or domestic brands?
– Regarding raw materials, we focus on the quality, as I already said. And I must say that the import substitution task here has been almost accomplished. Pork and chicken meat is supplied from Central Russia, Kaliningrad, while beef is supplied from Russia and Belarus. During the raw material acceptance on a continuous basis, we carry out quality control. Moreover, we implemented the Hazard Analysis and Critical Control Point system which is mandatory in many countries around the world.
We use mostly foreign equipment for sausage production: from cutters and smoke ovens to packing lines. However, the convenience product plant uses Russian equipment: dumpling production machines and packing lines. It must be said that Russian manufacturers have already achieved a decent quality of their equipment.
Regarding the production spices, the main types are supplied from Germany, Italy and Austria. We also buy Russian spices, mainly mono spices.
Your company uses PIC Identification to monitor products and raw materials. How and when has this system been implemented, and how demanded is it by your customers?
– PIC (Product Individual Code) is a product quality control tool developed by “OKRAINA”. It was implemented in 2012 in order to make meat production more transparent for the end consumer. PIC is a part of the WMS automated control system. Each product manufactured by our company has a unique PIC. This code can be used to trace the whole history of the corresponding product: the source, time and batch of raw materials used for that product, who worked on it at each production stage, when and to which store has this product been shipped. By using the PIC system, each customer can also get full information about the purchased product. PIC is also a unique system for customer feedback. After entering PIC on our website and getting information about the product, customers can rate the purchased item, and submit their questions or comments. We review every question and comment. Our customers are already used to it, they know about PIC and often use it for feedback.
A new electronic system is currently implemented in the market. Will it complicate your work with suppliers? What do you think about this project? Is it necessary and relevant? Will it change your approach to the PIC system?
– Regarding “Mercury”, it is difficult to give a straight answer to that question right now. Being an innovative company, we performed a preliminary preparation to work with the system. The “Mercury” system still has many “blank spots” and inconsistencies. However, we understand that changes are needed, and time will set the record straight. As a part of WMS, the PIC system, on the other hand, helps working with “Mercury”.
How are your meat product formulations developed and who works on them? Which of your items are the most popular and why?
– The product range development, as well as the formulation preparation and approval are done mostly by the process department, quality department, marketing and sales departments, and, of course, the company management. We constantly come up with new ideas, analyze the markets and review our items on a quarterly basis.
“OKRAINA” established the practice of organizing tasting events in the retail chains with technologists and marketing specialists. Customers taste and rate our products, and at the same time they can speak with the leading technologist who has worked on the product. I think that it’s great because the customers give the company a chance to understand their needs.
“OKRAINA’s” product range includes more than 140 names, and many of them are just “hits”. One of the latest developments that we are proud of is the “Ideal Sandwich” sliceable sausage. Our sausages for hotdogs are highly demanded by the HoReCa segment. Our Swiss hard smoked sausage is also very popular. It is made by using a unique technology which is one of a kind in Russian market. This item was awarded a gold medal at IFFA international trade fair in 2016. Developed in cooperation with our Austrian colleagues, this product is our pride and highlight.
Have you had any personnel problems?
– I think that almost all companies have personnel problems. They are typical. The main problem is the shortage of qualified personnel. The reason for that is the lack of professional educational institutions with trade programs, including those that are needed for our industry sector. I hope that the changes are right around the corner. However, many graduates strive to get a job in our company because “OKRAINA” has a reputation of a reliable employer, and it is pleasing. Actually, the people who try to get a job in our company have different goals: some of them need a stable income, some need an interesting job, and others see in our company the opportunity to achieve their full potential. We teach them to understand that success depends on the teamwork, not on an individual. If the specialist understands and accepts it, then he will succeed.
Which product promotion methods do you use? Which one of them is the most effective in your opinion?
– A good product always finds its buyer. “OKRAINA” uses all possible methods of product promotion: from TV commercials to exhibitions. We actively participate in promotion campaigns at the points of sale, communicate with the customers in social networks, quickly respond to feedback through available channels – PIC, quality control, and organize tasting events at the points of sale. We use the newsworthy information, and luckily, there is no shortage of positive events.
There are various food festivals, exhibitions and other events held in the city. Do you participate in those events?
– Yes, we actively participate in all important events in our city, such as regional trade fairs and the annual quality competition “Top 100 Goods of Murmansk Oblast.” We also participate in federal and international exhibitions. We recently participated in the industry exhibition for HoReCa – PIR–2017, held in Moscow in the autumn, where we showcased our convenience products, dry sausages and seasonal sausages. We regularly visit industry exhibitions, trainings, supplier seminars, and we also carry out presentations and training in our plant. We regularly participate in Russian trade fairs, such as “Agroprodmash”, “Rosupak”, “Prodexpo”. We also showcase our products at foreign exhibitions, such as IFFA, Interpack and China International Packaging & Materials Expo (CIPPME).
Does “OKRAINA” support social projects?
– All the time. But we don’t make unnecessary fuss about it, we just help disadvantaged social groups, non-profit organizations and on a one-time basis. I would also like to mention that we support sports and especially children’s sports. The hash tag #SportOkraina became a sort of a trademark for such events.
You organize regular factory tours. Please tell us what this project means to you.
– “OKRAINA’s” tours are not a PR move but a chance to brag about our production, process attitude and product range. Guests must be 12 years or older to participate in the tour. This tour is a serious organizational process which involves many people. Before the tour, the guests must provide a health declaration. During the tour they wear protective clothing and boots, and they are briefed on appropriate behaviour at the place of production. The guests also pass a sanitary protection area with a mandatory disinfection of hands and shoes.
The tours are usually conducted by the leading technologist or the director of operations, i.e. high profile specialists. The guests can see for themselves that we use quality cooled raw materials in production and that we don’t use artificial substitutes. We use natural milk, onions, garlic and eggs, and keep our production facilities clean and tidy. After the tour, the guests are asked to taste our products and provide their expert evaluation. People who participated in our tours become loyal customers of “OKRAINA”. We are the only meat processing company in the region that conducts tours on a continuous basis. Our regular visitors are universities, colleges, whole high school classes and even corporate teams. We have a constant flow of people who wish to take part in our tours.
How did you create your own online store and web application?
– Almost no one believed in the successful sales of sausages in the World Wide Web. People asked me: “Who is going to buy sausages through Internet?” Three years after establishing the “First Meat Online Store”, however, even the most sceptical people changed their minds. We ship around 40 t of products per month, which is around 14,000 online orders. And this is only in Murmansk Oblast!
I believe that the proper logistics are one of the keys to the success of the online platform. We have our own delivery service with many refrigerated cars. The delivery is free of charge, no matter how many products you buy: a can of paste or five kilograms of dumplings. The freshness of our products is an important factor. In fact, we produce the goods in the morning and deliver them in the evening. The prices are also very important. The prices in our online store are by 20–25% lower than in the stores of the city. You obviously save a lot of money this way. In addition, we have a bonus system for buyers, a call center for orders and a 24 hour quality control service with a free phone line.
Besides the adapted version of the website for smartphones, we also launched “OKRAINA” mobile application which is constantly updated.
You are active in social networks. How do you work with them?
– Social networks are effective communication tools not only in terms of product advertising, but also in terms of customer feedback. There are “OKRAINA” groups in all popular social networks, and we are trying to post an interesting content online. The average response time to messages is less than 30 minutes. We personally communicate with the users.
Please share your development plans for the near future. What are your long-term plans for the next 5 or 10 years?
– Our short-term plans include production modernization, new equipment purchase, MES system implementation and process improvements. We also have long-term plans but I don’t want to talk about them right now.
What do you think is the main secret to the success of your company?
– The success of “OKRAINA’s” product range is based on the fact that customers are confident in the quality of our products.
Prepared by: Polina Makarenko, Editor, “Sfera”. Anton Kazinov, CEO OF ООО “MPZ OKRAINA”