Finspot has studied the financial performance of three companies operating in the Georgian chocolate and candy industry.
The main activity of Barambo LLC, Tkbili Qvekana LLC and Vasadze Puri LLC (Sandomi) is the production of confectionery products. The products are sold on the local market through retail chains. Exports account for 4% of Barambo's revenue.
Barambo is engaged in the production of chocolate, ice cream and waffles, while Tkbili Qvekana and Sandomi mainly produce various types of cookies and crackers. Barambo produces more than 200 types of products, Tkbili Qvekana produces 180, Sandomi presents about 100 types of products on the market.
Imports are the main rival for local producers, since almost all famous global brands are represented on the Georgian market. In a highly competitive business environment, Georgian candy manufacturers remain competitive due to a relatively low pricing policy. “Tkbili Qvekana” has the fastest growth rates and the highest profits. In the last 5 years, Barambo poured the largest investment in the enterprise, Finspot notes.
In 2021 Barambo's revenues stood at ₾48 million, the revenues of "Tkbili Qvekana" and "Sandomi" amounted to ₾32 and ₾22 million, respectively. "Tkbili Qvekana" saw the highest growth among competitors, in 2018-2021 the company grew by 15% annually, while "Sandomi"- by 9%, "Barambos" - by only 2%.
In 2018, Tkbili Qvekana's revenues were 24% higher than Sandomi's, in 2021 Tkbili Qvekana's turnover was 48% higher than its competitor’s.
"Sandomi" has the highest gross margin of 48% in the sector. Tkbili Qvekana operates with a gross profit margin of 37%, Barambo's margin is only 17%.
Sandomi is the highest leveraged companies among its competitors. The company has a loan of GEL 10 million (69% of total assets), which exceeds the total book value of fixed assets (GEL 8 million).
"Tkbili Qvekana" has the highest marketing expenses both in absolute and percentage terms. The companies' marketing expenses in 2021 were as follows: Barambo- GEL 0.5 million (1% of revenue); “Tkbili Qvekana”- GEL 3.4 million (11% of revenue); Sandomi- GEL 2.0 million (9% of revenue), as per Finspot review.
