A C T a U N I V E R S I T a T I S N I C O L a I C O P E R N I
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a c t a u n i v e r s i t a t i s n i c o l a i c o p e r n i c i DOI : http://dx.doi.org/10.12775/AUNC_ZARZ.2019.019 ZARZĄDZANIE XLVI – NR 4 (2019) Pierwsza wersja złożona 21.12.2019 ISSN (print) 1689-8966 Ostatnia wersja zaakceptowana 20.05.2020 ISSN (online) 2450-7040 Marta Wiącek*1 BOTTLING INDUSTRY IN POLAND – THE PRESENT CONDITION AND PERSPECTIVES FOR DEVELOPMENT A b s t r a c t: The aim of this article is an attempt to identify potential perspectives for a devel- opment of the bottling sector in Poland under the conditions of changing market economy. The article’s character is strictly theoretical. The basis for analysis consist of statistical market data of marketing nature and internal materials of entities operating in the sector. Different trends that shape social and global consumer behaviors on market, such as care for a healthy lifestyle, respect for the environment, sustainable development, health-focused activity - these are needs that consumers will tend to satisfy in the near future, buying various items, including beverages. K e y w o r d s: bottling industry in Poland, determinants of development, development perspec- tives JEL Code: L160; O1; M1 INTRODUCTION The bottling industry in Central and Eastern Europe has been developed and existed for centuries. It has been changing, forced to modernizations and evolving with historical events and social changes of populations. It’s constant development is strictly ingrained and related to natural resources specially wa- ter. Fast development and investments in national economy bring this industry in Poland for operating in the highly multidimensional market. In order to meet the requirements of customers, market and to achieve growth organizations in this sector are forced to create added value using not only external finance cap- ital or imitating others but first of all by creating and implementing innova- tive products. The market data and customers decisions and behaviors shows * Contact information: Marta Wiącek, ul. Stanisława Augusta 12 m.3, 03-847 Warszawa, email: [email protected] 36 Marta Wiącek that those are main forces that affect on beverage and food industry in Poland. Customers are looking for a products that contain and provide all necessary nu- trients and ingredients good for health. Result of this tendency is enhanced com- petitiveness in this sector and implementing of different innovative technological changes that allow producers to cope with the customers’ expectations. Those relations made the bottling sector the object of interesting observations and re- searches. However because of its multidimensional complexity and many inner segments they are exceptionally multi-leveled and not straightforward. That is why this article is a trial of general outline, characteristic of the bottling sector in Poland, identifying of its condition and further perspectives. 1. GENERAL OUTLINE OF BOTTLING INDUSTRY IN POLAND The bottling industry in Central and Eastern Europe consists of three lead- ing segments: alcoholic beverages, non-alcoholic beverages and waters. In each of these segments, there are sub-segments of characteristic beverage types. A detailed structure has been provided in figure 1. The sub-segment of alcoholic beverages had existed and developed, in fact, long before the birth of the modern civilization. In Poland the basic beverage, since the Middle Ages, was beer. It was made of cereals - mainly barley [Curry, 2017, s.31–36]. Various kinds of beer were produced - starting from light “home-made” beers with a short fer- mentation process, to those containing more alcohol, made of hops [Fałat, 2005, s.21]. Small quantities of vines were grown, brought by monks from western and southern Europe. Regular import of wines from abroad started in the late 14th/ early 15th century. However, due to high costs, it was very limited and was only aimed at satisfying the demand of the court. The 1990s had brought a revival mainly in beer production. It was the period of privatization of breweries, nation- alized during the communist times [Fałat, 2005]. As the free market economy developed, interest in the Polish brewing market grew among the biggest global players on the market. This led, on the one hand, to fall of many small and medium-sized breweries, on the other - to consolidation and development of the biggest domestic compa- nies on this market. The largest beer producers, with the total market share of 81%, are at present three corporations belonging to the Union of Brewing Indus- try Employers [www.browary-polskie.pl, 2018]: - Kompania Piwowarska with its three breweries: Browar Dojlidy (Bia- łystok), Lech Browary Wielkopolskie (Poznań) and Tyskie Browary Książęce (Tychy); - Żywiec Group, which has seven breweries: Browar Żywiec, Browar El- bląg, Browar Leżajsk, Browar Warka , Browar Namysłów, Browar Bra- niewo and Browar Zamkowy Cieszyn as a separate enterprise; Bottling industry in Poland – the present condition and perspectives 37 - Carlsberg Polska – belonging to the Danish Carlsberg corporation, which has three breweries: Browar Okocim (Brzesko), Browar Kasz- telan (Sierpc) and Browar Szczecin (Szczecin). Figure 1. Bottling industry - segments Source: Own compilation based on KPMG analysis [KPMG, 2014; 2020]. Medium-sized producers, most of them members of the Union of Regional Po- lish Breweries, include [www.browary-polskie.pl, 2018]: - Van Pur S.A. - a Polish company with breweries in Rakszawa, Łomża, Zabrze, Koszalin and Jędrzejów; - Browary Regionalne Jakubiak – a Polish company with breweries in Ciechanów, Lwówek Śląski, Bojanów, Tenczynek, Biskupiec; - Perła Browary Lubelskie, which has breweries in Lublin and Zwie- rzyniec; Browar Namysłów with breweries in Namysłów and Braniewo; - IBG DWA – a Polish-Belgian company, which is the owner of Browar Fortuna, the Brewery in Grodzisk Wielkopolski and in Trzemeszno; - Sulimar, which is the owner of Cornelius Brewery; - Browar Amber; - Browar Jabłonowo. The brewing market in Poland, as a sub-segment of the bottling sector, is among the fastest-growing sectors of economy based on processing of agricul- tural products. This has been possible thanks to successive increase in beer con- sumption, changes in consumer preferences, who tend increasingly to choose weaker alcoholic beverages and raising of the technological level of produc- tion, which is now considered to be one of the highest in the world [https:// www.browary-polskie.pl/opinie, 2018]. The Polish brewing industry, as a part of 38 Marta Wiącek the bottling industry, is very dynamic. It is in the state of permanent innovative changes [www.browary-polskie.pl, 2018]. It should be strongly underlined that small breweries emerge, which are often family businesses, craft, contractual and restaurant-based breweries. Vodka is the second significant alcoholic be- verage, representing a sub-segment of the bottling industry. It is made by mixing spirit and water in adequate proportions. It may not have any additives - in which case we refer to it as the so-called pure alcohol, or it may be aromatized. It is assumed that the percentage of ethyl alcohol should amount to at least 37.5% vol. Traditionally, this alcohol is made of cereals or potatoes. In the 1990s, as the economy was demonopolized, the National Spirits Industry Enterprise was defined in 25 enterprises, located in different cities. Along with increase of con- sumption and export of vodka, it became the biggest category of distilled beve- rages in the world. It has left rum, whiskey, gin and tequila behind [Łazarowicz, 2017]. The highest consumption levels are recorded by the markets of: Rus- sia, Ukraine, the USA, Poland, Uzbekistan, Belarus, Kazakhstan [Polish Vodka Museum, 2016]. The next sub-segments of the bottling industry - sub-segment of waters and non-alcoholic beverages started to develop in Poland and Europe in the 18th century. The first water bottling plants were established in the 19th century [Mirek, 2007]. The beginnings of water bottling were associated with the presence of underground healing springs in Poland. Underground healing waters refer to underground waters, which are not contaminated by chemical or microbiological factors, characterized by natural variability of their physical and chemical features, containing no less than 1000 mg/dm3 of dissolved solid min- erals, or the respective amount of one of the following: ferrous ion, fluoride ion, iodine ion, divalent sulfur, metasilicic acid, radon or uncombined carbon dioxide [Dz.U.2019.0.868, 2011]. Rapid expansion of this sub-segment took place in the early1990s. Private bottling plants started to emerge during this period. Most of these were equipped with modern bottling lines, as well as the so-called PET bottles, gradually replacing the glass packaging, used previously [https://miner- alne.pgi.gov.pl/rozlewnictwo, Naturalne wody źródlane, naturalne wody miner- alne]. As a result of the economic transformation in 1990s, only 7 bottling plants have survived: Busko-Zdrój, Ciechocinek, Krynica-Zdrój, Polanica-Zdrój, Ry- manów-Zdrój, Wieniec-Zdrój (bottling of ordinary water), Wysowa-Zdrój, and out of these, only the bottling plant in Polanica-Zdrój classifies as a large one. At present, the bottling industry is represented by the Polish Chamber of Commerce of the Bottling Industry, which integrates the entire community of entrepreneurs, engaged in bottled water production, including both underground healing waters and ordinary waters. Non-alcoholic carbonated or non-carbonated beverages are made of treated water, possibly with addition of fruit juice concentrates, sugar, citric acid and trisodium citrate (acidity stabilizers), ascorbic acid, natural colo- rants and/or nature-identical colorants, saturated or non-saturated with carbon Bottling industry in Poland – the present condition and perspectives 39 dioxide. The market of private brands has been growing systematically, encom- passing at present around 34% of the entire Polish market of non-alcoholic be- verages and still increasing. In the European Union, the total value of the market of non-alcoholic beverages is estimated to amount to EUR 134 billion.