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Short Schedule Farm/Company

Name: “Lači” Ltd Web site: www.laci.lv E-mail: maize@laci.lv

Place

Country: Latvia Region: Riga City: Babite County

Product Type Bread

Reference year 2009

Completion date 16.03.2010.

2.3.3. Lači Bread

Farm description

Start point/Challange

Successful elements

Output/Effects

Distribution channels

Description

Lāči Bakery, founded in 1993, is the best known producer of superior-quality Latvian rye bread.

Lāči produce is well known as the best quality rye bread, recognized in numerous competitions and highly valued by the customers. The best known Lāči products are the Real rye bread, Carrot bread, Fruit bread, Walnut bread and pastries. 85-95 % of the ingredients used are produced in Latvia.

The bread is baked according to old traditions: from qualitative rye-flour with natural yeast. Dough is raised in timber kneading dough; every little loaf is made by hand of a master and is baked in the hearth, heated with firewood. Such baking process gives Lači bread its particular flavour, odour and the highest nutritive value. Long lasting process of raising dough that depends on the type of bread continues up to 36 hours, developing vitamins of E and B groups, organic acids that strengthen human immune system. Ready bread is cut and pre-wrapped to find the way to its consumers.

- Innovative products – Labeling - Image - Creation - Marketing strategy

Key Words

A bakery has successfully established a brand name of being the producer of the real Latvian rye bread. Production based on old ‘grandmothers’ recipes of the natural ingredients, mainly produced in Latvia.

Why is the topic

interesting?

„Lāči”, Ltd. Bakery

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Lači Bread

Start Point

Farm description 1993: Owner Normunds Skauģis establishes the Lāči Bakery. Skauģis learned the art of baking original Latvian rye bread from his mother. Already at 16, Skauģis was baking bread in his father’s house, "Lāči", and selling his product in the Vidzeme market. The name of the Bakery is given to honour the name of his father’s house. 2001: A new and more spacious retail shop and café open for business next to the Lāči Bakery.

Start point/Challange

Successful elements

Output/Effects

2003: The Bakery employs 160 people. 2005: 200 employees work in the Lāči Bakery. The Bakery makes over 4 tonnes of bread daily. 2006: The Bakery makes over 5 tonnes of bread daily. A modernized facility is added to the Lāči Bakery. 2007: The construction of the new bakery is completed. Lāči begins a new service – recreation opportunities for children and adults (a café and a number of other services). Lāči opens its internet bread shop, selling and shipping its bread to over 200 countries. 2008 Lāči opens a new bakery with a recreational facility in the Cinevilla Backlot.

GLOSSARY:

Dark fruit bread- Specially cherished delicacy made from coarse rye flour, contains 25 % dried fruits and nuts. Light fruit bread Walnut Bread Councillor’s bread Carrot Bread Fine Rye Bread with Seeds

Challenge

Bread with Seeds LIGHT, 190g Bread with Seeds DARK, White bread, 110g

RECALL!

Efficiency in the new

economic conditions!

Real Rye Bread - FROM A BIG LOAF Real Rye Bread Real Fine Rye Bread

The turnover of the company in 2008 was Ls 3,31 million (EUR 4,7 million), which is a 3,9% rise in comparison to 2007. The challenge for the coming years, according to Normunds Skauģis, is to raise the turnover with the help of new services and wider choice of produce.

Light Rye Bread, 480g White Bread, 190g Fine Rye-wheat Bread, 210g

Due to optimization of production and improved planning, in the current period, the Bakery has been keeping its prices constant, irrespective of the rising costs of production.

Linen PackagingLāči has entered the wheat bread market in 2008 with 3

kinds of wheat bread, and some fast food products and pastries. Also, new kinds of rye bread (“Rye Bread of Strong People”) have been started, in the lower price range, in order to meet the customers’ demand for cheaper products in the new economic conditions. The new kinds of bread have the same values for quality as the well established products of Lāči.

“2009 will be a year of challenge”, says Normunds Skauģis. “We have to be more efficient and smart. The decisive factor will be whether we will manage to be clearly different from our competitors.”

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Lači Bread

Farm description

Success elements Start point/Challange

Successful elements Lāči puts a twist in traditional values by adding dried fruits and nuts to introduce a new kind of "Real Rye Bread" and "Real Fine Rye Bread".

Output/Effects Bakery produces various pastries, also cheese, garlic and tomato toasts from freshly baked Lāči bread. an internet bread shop, selling and shipping Latvian bread to over 200 countries.

STRENGTHS A new niche in the bread sector – breads made with walnuts and fruits are sold in special two-slice packs for a quick and easy snack, cakes and pastries, and new kinds of bread – "The Rye Bread of Strong People" and "The Fine Rye Bread of Strong People". The pastries produce has turned out to be the fastest growing commodity. (+19% in 2008)

Diversification of the services based on bread making

At the sales level: cover whole country and exclusive product for abroad. Efficiency in the new economical situation At the product level: high quality Rye bread and all other products.

At the company level: high quality work and good competence in marketing. At an advertising level: Very attractively designed products packaging and web page, marked transport.

Very attractively designed web page

E X E R C I S E S To investing five the most popular bread types for consumers? Name all kind of bread produced by Ltd Laci?

- DIRECT DISTRIBUTION AT THE COMPANY – 1. Why do you distribute at the company? – I lose little time in respect to setting up and displaying products O – So that I can do other things at the same time O – I profit more from my products O – For contact with the customer O – The prices better represent my product O – For other reasons O Explain? ...................................................................................... 2.Where does direct distribution at the company fit in to your method of commercialization? – Less than 20% of total sales O – From 20 to 50% O – More than 50% O 3.Have you equipped any locales specifically for direct distribution? – Yes O – No O 4.At the heart of your company, who takes care of direct distribution? – Mostly the chief of the exploitation O – Mostly his or her spouse O – Both evenly O 5. Do your sales increase? Why? – A real store has been set up O – Effective advertisement O – Consumers want to know where their products come from O – I have amassed a solid clientele O – Other reason O Describe? ........................................................................................... 6. How could you augment sales at the company? – By ameliorating the sales location O – By advertising O – By integrating myself with a single sales location O – By becoming a member of a network O

3/4 – Other methods O Describe? .............................................................................................

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Lači Bread, Latvia Chapter 4 of 4

Output/Effects

Farm description

Start point/Challange

Successful elements

Output/Effects

Over the years, Lāči rye breads have received numerous awards from the Marketing Council, Latvian Merchant Association and various Rye Bread competitions as the customers’ favourite products in Latvia. Lāči Bakery owner and master baker Normunds Skauģis has been awarded a number of honourable titles for his outstanding business success.

Discussion Questions/Remarks How the owner foresees/plans the future development of the company? What kind of products and services could be developed?

Further investigations

www.laci.lv A new niche in the bread sector – breads made with walnuts and fruits are sold in special two-slice packs for a quick and easy snack. http://www.karotite.lv „Genuine Rye Bread” and „Gemuine sour-sweat bread” received the prize „Zaļā Karotīte” as 85-95% of the ingredients used are produced in Latvia.

Expansion of the company. C o n c l u s i o n s

Using all possible distribution channels. High quality products. Product added value. Bakery “Lāči” turnover in 2008 was 3,31 million Lats (LVL), which was about 3,9% more than in 2007, when the figures was 3,19 million Lats. The company concluded the year 2008 with the loss of 375 249 Lats, which is 35,1% more than in 2007, when the company made a loss of 277 673 Lats. The bakery “Lāči”rye bread production in tones in January 2010 has increased by 15,7% compared with January 2009.