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A look into Poland's largest roaster: Posti.

Posti is Poland's largest roaster and tea packer. It was the only tea and coffee purchasing, packing and roasting company in Poland for 38 years (since 1953). Just two years ago, Poland's government changed, becoming a true democracy. With the Soviet withdrawal, Lech Walesa's arrival, and policy changes, the economy became free. People are now allowed to import freely; of course the proper taxes and duties must be paid, but there no longer exists a monopoly in the tea and coffee industries. And now Posti has become a privatized company, but its shares are all held by the state. Foreign investors are very welcome and major manufacturers of both tea and coffee are slowly testing the waters.

Posti has also entered into the private side of importers --the company now imports both tea and coffee, where they previously used the services of Agros. The company has five factories dotted throughout the Polish countryside--two tea and coffee facilities in Warsaw and Gdynia, and three other coffee plants in near Karerskv and also in Karczew (near Warsaw).

In January 1991, Posti became an enterprise, separated from big enterprise, and will eventually become a total private company. They may join a foreign firm for guidance and to be updated to present working economic conditions. The Government doesn't pressure any firm to go private or not. The nation is burgeoning with many entrepreneurs who are trying their hand at the tea and coffee industry. Since the privatization began, Posti lost 50% of their market share to Western firms coming in, as well as smaller private companies entering the market. Posti is still counting on its tie with tradition that will cause people to continue buying their products.

"We are open for any cooperatives with any firms," says Zenon Suchanski, commercial director, and Jacek Pawlik, quality supervisor.

Tea is imported straight from the origin countries with a preference for India, Indonesia and Kenya. The company recently started importing whole leaf tea from China. Loose tea accounts for 75% of the company's production and tea bags, without any strings or tags, account for the remainder. Of the total tea production in Poland, says Suchanski, tea bags account for only 7% of the market.

After years of being the only company in Poland offering tea and coffee products, both packaging and varieties do not have the nuances of high gloss. Brand names are Posti, Indian tea and Yunnan tea. Posti intends to install a vacuum packaging line next year and also has soft packs in aluminum foil in 50 g, 100g, 120 g, and 250 g size. Tea either comes in poly soft bags or grey carton boxes.

Poland in previous years, enjoyed a very favorable exchange rate with India and prices were 20% lower than any other countries. About two years ago, the government urged its people to drink more tea-a natural beverage, and thus taxed coffee imports more heavily.

The Poles are an economical group of people--sadly more by necessity than desire. Tea bags and tea leaves are preferred because you are able to stretch more cups out of a lb., kilo, or a single tea bag than one can stretch from coffee.

Posti sells tea to hand packers in the countryside, and wholesalers who in turn sell it to retailers. Coffee is purchased from the European brokers.

Posti has five brands-Orient, Super, Extra Select, Arabica, and Selecta. The Orient blend consists of pure unwashed Robusta. Super is a blend of washed Robusta with a minute percentage of Arabica. Extra Select is both Robusta and Arabica from South America and Africa. While Posti may be the largest roaster, the company told me there are several smaller roasters, often some with only one roaster (usually a small Probat that is popular with the specialty coffee roaster/retailers in the States).

Filters are not popular in Poland, as I noticed when I drank my first cup of coffee in an office and found the coffee grounds sticking to my teeth. Ground coffee is placed in the bottom of a cup, hot water added, coffee is stirred and then the consumer waits for the grinds to settle on the bottom. I didn't know that at the time and spent a good half hour spitting out the grinds in between interviews. There are no convenience machines or items or brewing coffee in homes and offices. The hotels, Austrian, German and U.S. owned have the usual coffee brewing services, but there are no conveniences incorporated into the Poles' lives.

Poland is not a member of the ICO. The country received coffee at very low prices compared to the ICO members but they also purchased the lowest grade of coffee. Since the collapse of the ICO quota system, green coffee prices have gone up in the last three years. But while prices are rising for green coffee, the market prices for consumers are remaining the same. The Poles can't afford to pay any more than what they are already paying. The country's economy is so low, it wouldn't seem that any movement surely would be in a positive mode. The country is trying to build itself up--it takes time and the Poles and their companies are willing to build.

Posti holds a 30% share of the total coffee production in Poland. Again, the amount of tiny, regional roasters are numerous and every Pole I spoke with told me a number which ranged between 100-1,000. Posti, does enjoy 40% of the market's share and claimed they lost their #1 position of supplying all the coffee to the Poles to the Western European companies. Alvorado in Austria is the #1 importer of roasted coffee into Poland. Jacobs Suchard holds the #2 position and Tchibo and Eduscho follow. It is estimated that Poland imports approximately 50,000 tons of green coffee of which some is re-exported. With tea, imports amount to 25,000 tons for 1990, with many smaller companies importing perhaps one container load.

Now due to privatization, Posti has to advertise in order to keep ahead of the new competitors. The mediums considered are newspapers, magazines, calendars, pens and posters. They intend to broadcast on radio and then maybe branch into television advertising, but Pawlik tells me that TV advertising is more expensive in Poland than in the States. During their monopolistic reign, they had an 80% share of the market. When their new packaging comes on line, the company is considering re-exports into Russia.

A 100 gram package of coffee is 30 [cents]-affordable to the Poles, but not cheap.

A look into the Warsaw facility

The Posti plant in Warsaw has a roasting capacity of 500 tons per month. Their busiest time is the Christmas season. Christmas has proved to be a good time for showing new products. People are willing to purchase something special during that time and to also receive/purchase gifts. Holiday gatherings and the extreme cold weather are the factors here. (At the time of my visit at the end of October, temperatures didn't vary from 0 [degree] C [32 [degrees] F].)

There are three Probat roasters and Posti tells me this is considered the largest facility for them; the smallest facility may include a 180 kg roaster Probat. In the past, the plant did some private label, but for now, they prefer to pack only for themselves. Posti feels it's better to reduce the number of machines and people than do competitor's work.

Again and again the Poles keep telling me the market is crazy because anyone can sell coffee. Posti was and is used to being the sole provider of tea and coffee products. Only one company produces soluble coffee and it is packed in tins.

Posti has 1,200 employees of which 50 work in the Warsaw plant. In the plant, I saw two men, the rest were women. Plant manager is Mrs. Kazimierz Chustecki. The plant can accommodate three shifts at full capacity, at least they did during the monopolistic times. Christmas season, with the plant at its busiest works two shifts, but generally there is only one shift.

Roasted coffee stands for six hours in order for a complete degassing process to transpire, says the company, in order for the pillow pack of the coffee not to puff out and possibly break. Tea packing equipment is purchased from IMA, Soteco and a new teabag machine is expected shortly. At the time of my visit, the men were cleaning away old storage bins in order to fit in the new equipment. The plants include warehouse facilities for green and roasted coffee--approximately 12,000 sq. meters for the warehouse and 30,000 for the building.

Decaf coffees are not popular in Poland. There is no concern over health versus Western Europe and the U.S. There is a small quantity available in Poland, nevertheless, for a decaf audience Posti is currently researching and developing a coffee specifically blended for people with health problems.

Posti explains that there is a hard system of inflation, especially for new investments; the economy requires much more than money to sell than a company usually has. In order for a company such as Posti to sell their shares, they themselves must have money available for all the legal ramifications.

Competition in the market is forcing Posti and other companies to present their products in more attractive packages and plans are underway for a major cosmetic overhaul.

The Rovema coffee packaging machines pack 350 kg/hour, three machines pack 100 gram packs and one machine packs 250 grams. The other Posti plants have machinery that can pack in the 200 gram size.

Flavored tea is not popular in Poland. A flavor like cherry mango would be ignored as the Poles prefer a juice to a flavored tea. They insist on drinking tea like tea. The Poles want quality and Posti claims they are responding. If you sell bad quality--you sell it only once--you never get the consumer back--she's lost to you forever, they stated.

The most popular tea in Poland is tea from the Yunnan province. It was so cheap in Poland that people paid 50 [cents] for a 100 gm pack. For years now the Poles have drank Yunnan and even though Darjeeling has entered the country; Yunnan is preferred as people are used to it.

PHOTO : Probat roasters are popular throughout Eastern Europe and Posti has used Probat throughout its history.

PHOTO : Rovema machines are used for form, fill and seal coffee pillow pouches.

PHOTO : Quality control is acessed at the laboratory where moisture, weight and other factors are analyzed.
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Title Annotation:privatization of government coffee roaster
Author:McCabe, Jane
Publication:Tea & Coffee Trade Journal
Date:Jan 1, 1992
Previous Article:Poland: nation struggles to privatize in a difficult economy.
Next Article:Interview with Michael Neumann.

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