The Bulgarians became increasingly unhappy about the
situation. In the end, in January 1997, that feeling of
discontent amongst the Bulgarian people culminated
in large-scale demonstrations which brought down the
government. A new democratic government took over the
helm and is currently working to improve the image of
Bulgaria and attract more foreign investors. Anna Milosh
Potzkova of Famous Beers sketches the new situation:
"Bulgaria was formerly very isolated and was focused on
the Soviet Union. Today, the government is actively seeking
to attract inward investment from foreign companies.
Big oil companies like Shell and BP have already started
operations in Bulgaria and that's a good sign." The
Bulgarian currency has also moved into calmer waters
thanks to intervention by the International Monetary Fund.
Since July 1997 the Lev has been tightly linked to the
Deutschmark. At the moment the standard exchange rate is
1000 Lev to one German mark.
For Famous Beers the recession was a very deep chasm that
even threatened to swallow the firm up. "I thought, we're
all dead. We were in the position where you can no longer
take decisions about your future; the situation takes the
decisions for you. We had high levels of stocks, as business
had been going very well just before the recession struck.
Luckily we had a lot of help from Heineken to pull us
through that difficult period."
In the end Mr Todorov hit upon an unconventional escape
route out of the recession. He took an unusual decision: he
would sell Heineken to his customers at a lower price. Yet
at the same time he urged those customers to make sure
that the consumer retail price for Heineken Beer was main
tained at its customary level. What this meant, therefore,
was a reduced profit margin for Famous Beers and a wider
margin for the distributors and the customers who were
supplied directly. For the end-consumer, however, nothing
changed. "Because they received a higher margin on the
product, our customers decided to buy in bigger stocks. As
a result, the competition - in so far as there was any - was
totally wiped out."
As the recession dragged on, the number of imported beers
in Bulgaria fell sharply. Many businesses decided to wait
until the storm had blown over. But not so Famous Beers.
And, says Iavor Todorov, that decision was the crucial factor
behind Heineken Beer's present-day success in Bulgaria.
Whilst other companies (temporarily) pulled out of the
market, Famous Beers kept on working hard to strengthen
the image of Heineken and expand awareness of the brand.
DIFFERENT STRUCTURE
Last summer Famous Beers employed a staff of 21, twelve
of whom worked in Sofia. Besides Sofia, Famous Beers has
area managers in cities such as Varna, Burgas, Plovdiv, Ruse,
Veliko Tornovó, Pleven, Sandanski, Vraca and Sunny Beach.
In the meantime the sales force has been expanded by four
new employees and the organisation has been given a
different structure. "We as a company have to move with
our times. The world around us is changing, so we have to
change with it. Now is the time to invest. We have now
separated the Heineken import activities from the sales and
distribution operations. The sales organisation is today
subdivided into on premise and supermarkets, plus a new
department to handle promotions. TWo of our people
concentrate solely on organising promotions in the outlets
and on advertising."
