Schwälbchen struggles with costs but holds firm
Image: Schwälbchen Dairy
German dairy Schwälbchen is struggling with high cost pressure and is looking to 2023 with subdued expectations, the company says. “It was the third very difficult year in a row for the entire Schwälbchen Group,” says CEO Günter Berz-List on economic developments in 2022.
The company has, despite circumstances, held its ground overall on the market.
Berz-List emphasised that Schwälbchen’s two business areas, dairy and the fresh food service, are absolutely future-proof. However, they have each developed differently in the past year 2022. Demand for out-of-home items from the fresh food segment to hotels, gastronomy, canteens and canteens increased noticeably after the end of the strict Covid-19 measures last spring.
However, compared to previous years, sales and earnings are still at a relatively low level. In terms of revenue, the CEO expects €110 million in 2022. Berz-List expects the fresh service to have a balanced result and a “black zero after two previous years with heavy losses.”
In 2021, the deficit in the business area was still €1.5 million.
“The fresh service has come out of the valley. We still have to work on the dairy,” he says.
Last year, retailers paid significantly higher prices for milk, cream, quark and yogurt from the dairy. Extremely high energy costs, such as for cooling the products in the hot summer, significantly increased expenses for transporting the goods and enormously higher packaging costs completely offset this effect. The same applies to raw material costs, with prices paid to farmers reaching new record highs.
A drop of 7% to around 130 million kilograms was seen for milk processing.
The Schwälbchen Group CEO says sales have increased by around one-third to over €200 million for 2022. The group result will be negative again, but the loss of is half that of the €1.2 million seen in 2021.
A concrete outlook for the next few months is currently not possible, because there are extreme fluctuations in the markets. “Of course I hope that we will get back on track in the dairy business over the course of the next year,” says Berz-List.