ECONOMY

Delta: We lead, not follow the market

Dimitris Daskalopoulos, president and managing director of Delta Holdings, sees an increasing trend of concentration in the foodstuffs industry but doesn’t see any substantial merger in the next two years. He says this is either because of the fact that the large Greek groups in this sector are few or that they have major differences in business practice and mentality. Nevertheless, he says he can rule out nothing as the future is unpredictable. «A few years ago, I could not have imagined that the Goody’s fast-food chain would now be a strong link in Delta’s chain,» he notes. Daskalopoulos says forging closer links with FAGE, the other big Greek dairy company is not under consideration, but «of course, if FAGE decided to come up for sale, we would be open for a discussion.» After the Goody’s acquisition, alliances and partnerships are a basic, rather than an alternative, strategy. Besides, the Delta group is the only one in the sector which has three important multinational partners in various branches of activity. France’s Danone was first, then came Arla, Europe’s largest dairy industry, and recently Sodexho, a global leader in catering services. «The catering sector will see significant growth as a result of the 2004 Olympic Games. It was in this context that Sodexho developed an interest in the Greek market, judging that Goody’s and its affiliation with Delta is better suited to its portfolio.» In the long run, he does not rule out similar strategic partnerships to that with Sodexho in other areas where Goody’s is active, but makes it clear that this is not a main strategy. «Goody’s has its own plans and a great growth potential. But if there are opportunities for maximizing benefits through partnerships, why not tap them? We have already drawn up a very aggressive action program for Goody’s and Flocafe in 2002, and are busy streamlining the group in order to make it more profitable,» Daskalopoulos says. Success requires study and detailed planning. «We are about to make serious decisions regarding which activities of Hellenic Catering to invest in. We must then see what to do with Floca patisseries, which is a loss-maker. And the Planet Hollywood restaurant must close as soon as possible – it should already have done so; it was a bad choice and has not done well as a concept abroad, either.» Daskalopoulos is pleased with the results of cooperation with Danone since 1993 and does not rule out its expansion to markets outside Greece, but says Delta is not considering selling any greater stake to Danone. «Our relationship has improved since Danone acquired a 30-percent stake in Delta Milk Industry and now there are good prospects for a joint venture in Serbia. I think it is inevitable that they will wish to acquire the majority at some point. But what they want is one thing and what we want another,» he says. About a month ago and after experiments lasting many years, Delta feta cheese hit the store shelves. This is the first product of the partnership with Arla and a further two projects in cheese are nearing completion. «The feta we produce will also be distributed abroad – not necessarily under the Delta name – by Arla. We are soon beginning exports and the joint venture with Arla estimates a turnover of more than 20 billion drachmas.» He is not at all concerned about the intensification of competition projected as a result of the introduction of the euro. «The core issue for enterprises is whether they can approach the realities of competition, that is, flexibility, fundamentals, innovation, etc. Personally, I am not concerned. The group is a strong leader and market shares have hit the ceiling in certain branches.» According to Daskalopoulos, Greek enterprises today are adopting modern organizational methods without abandoning their «family» character and the more they remain in this intermediate situation the better. «I believe there must be a personality behind an enterprise, setting the tone, the vision and creativity. In recent years, with the dominance of analysis and numbers, we have rather lost the point of entrepreneurial activity, which is boldness and long-term prospects.»