Tuesday, January 24, 2006

On a recent factoid-finding mission to Sofia, the Bulgarian capital, I discovered that Bulgarians are very keen on their yogurt. The secret of long life and happiness, they claim, is yogurt.

I learned, in an interview with the local country manager of Danone, that today’s Bulgarians consume about 20 kilos of yogurt per capital annually. That doesn’t really seem like a lot when you think about it: If I’m doing my math right, it’s less than half a 125-gram standard serving per day for every man, woman and child.

Compared to 15-20 years ago, yogurt consumption has roughly halved. Bulgarians have been lured away from the one-time staple by newly introduced Western snack foods and cereals. Under communism, Bulgarians were among the world’s biggest yogurt eaters.

The annual yogurt consumption rate in Bulgaria has bottomed out and is now slowly increasing.

And 20 kilos is in fact already quite high compared to other countries in the region. The Romanians, for instance, consume only about 3-4 kilos annually.

The real problem for dairy companies such as Danone – which is the market leader with a 35% market share – is that retails prices of yogurt, on a per-kilo basis, are lowest in the world in Bulgaria. That’s right, lowest in the world. And Bulgarians are really set in their ways when it comes to how they buy yogurt, with 90% of the market in standard plain “set” yogurt as opposed to the kind with fruit mixed in, drinkable kinds, dessert products, and that one brand that supposedly has extra-special bacteria.

All of these are so-called value-added products, which translates into bigger margins for producers – all of which is to say that it’s actually damn hard to make money selling yogurt in Bulgaria, despite the fondness of the local populace for the curdled stuff.

Moreover, raw milk production and collection remains rustic and rudimentary in Bulgaria. About 80% of all the milk in the country is produced from people in villages with one or two cows, with some estimates of the value of production in the untaxed grey economy in the 30-40% range.

All this is set to change this year as the country clamps down on unregulated dairy production in its bid to join the EU in 2007. Estimates of the number of dairy producers on the market now range from 180 (the official figure) to 400. About half are likely to be shut down due to non-compliance with EU production and processing norms.

The trend in recent years toward market consolidation will therefore continue. Today, about 60% of dairy production is in the hands of the top five firms (only one of which is fully foreign-owned). Five years ago this figure was 35-40%.

Here are a few other factoids gathered on my recent travels. I'll be posting more of them as they emerge from the haze.

It is already well-known that in Bulgaria, people shake their head when they mean yes, and nod when they mean no. I’d just to report that this is still true, and while I’m a big proponent of preserving cultural differences, it is bizarre and it is disturbing and it must cease.

In Sicily, drivers in the right lane of the highway keep their right turning indicator flashing, long after they’re done changing lanes. This is not the case in the rest of southern Italy, only Sicily. We noticed the trend as soon as we got off the Messina ferry, and not just with a few cars, but many. It’s true. I’m not making this up.

Not so much a factoid, but a recommendation: When an Egyptian or a Syrian asks you to “wait five minutes,” you’d best have brought a book to read. God forbid, if an Egyptian asks you to “wait twenty minutes,” you should think immediately about food delivery options, because at least one mealtime will come and go before the wait is over.


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