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Branding puts Serbia's Grand Coffee ahead of multinationals

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Momo Vucicevic tastes the product before anyone else can

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In a logo-laden global marketplace dominated by multinationals, what's the best known brand name in Serbia? Is it Coca-Cola, or Nike? No, according to Belgrade's Politika newspaper, a consumer survey has shown that locally-owned Grand coffee beats those two international labels hands down as the best-loved brand in the land.

"More than two million people in Serbia and Montenegro drink our coffee every day," says Momo Vucicevic, general manager of the family-owned coffee company which has expanded regionally with €7 million from the EBRD. "Our advertising campaigns are very, very local so people identify strongly with the product."

In Serbia, Grand's local focus has produced some very funny television ads starring the Serbian acting team of 'Handsome Gaga' (otherwise known as Dragan Nikolic) and his wife, Milena Dravic. So successful has the company's marketing been that sales in Serbia-Montenegro grew from 20 tonnes per year in 1998, when Grand started, to about 15,000 tonnes in 2004.

When Grand branched out into the neighbouring Bosnian market in early 2004, it used local singers in its TV ads and in just four months had captured 15 per cent of the market. "And Croatia, if we decide to start selling there, will require yet another advertising strategy specifically tailored to the country," says Mr Vucicevic.

Cross-border brew

Grand is an example of a private sector company that is expanding across borders, a main element of the EBRD's investment strategy for the Balkan region. Doing so is not easy, given the still-fresh memories of war after Yugoslavia split up, but the situation seems to be improving.

"In Bosnia Grand is a local brand because of our local ad campaign, and locally tailored coffee taste. We opened a factory there and our packages say, 'Made in Bosnia'," says Mr Vucicevic. "They see it as a Bosnian product. That was very important in the past, is still somewhat important now, but in two years I would say it won't be very important at all."

"The EBRD is happy to finance companies such as Grand that form the backbone of a robust local economy while promoting regional trade," says Hans Christian Jacobsen, EBRD's Director of Agribusiness. In 2004, to finance its Bosnian factory and related marketing activities, Grand borrowed €7 million from the EBRD of which €1.5 million was financed under the Italian risk-sharing facility operated with the EBRD.

A taste for the market

Mr Vucicevic's brother Slobodan had worked in various jobs in the coffee industry in the USA before starting up Grand with Momo, an accountant, back home in Belgrade in 1998. One of the Vucicevic team's strengths is its in-depth understanding of its market, country by country. "Every country in the region has its own preferences in terms of the types of beans, the level of roasting, the blends and mode of brewing," says Momo Vucicevic.

But, as with many consumer products, it all comes back to advertising. The image Grand develops to go along with each of its coffees is at least as important as its actual flavour and caffeine punch. Grand spent €3 million on advertising in 2003 in Serbia-Montenegro and last year invested just under €1 million on publicity in the relatively smaller Bosnian market.

In Serbia, the old standby is strong, Turkish-style coffee under the Grand label, promoted by the middle-aged Handsome Gaga team. In one hugely popular ad the couple is in a café in Florence, Italy, incredulous that their waiter doesn't have any Grand coffee to offer along with all the cappuccini, caffè lunghi, macchiati and ristrettissimi. Although he's seen it before, photographer Aleksandr Andjic hoots with laughter as he watches the ad in the company's conference room – and asks to see it again.

At the other end of the demographic spectrum, younger Serbs told Grand's marketers they wanted lighter coffees "that would be easier on their stomachs and have a more modern, European feel," says Mr Vucicevic. So Grand produced 'Aroma lite' coffee in fresh green packaging. The TV ads featured a slender, blonde Kim Basinger look-alike living the life of the healthy and wealthy beside her swimming pool; 'Morning Has Broken' is the soothing background music.

Revolutionising the ad scene

"We absolutely changed Serbian marketing which was very staid, very stodgy before," says Mr Vucicevic. "Maybe that's why people love our brand. When we did our first TV ad we didn't know how it would turn out but it was fun and people picked up on that. It was the beginning of a new marketing era in Serbia. In 1998, when we started, there were 200 advertising billboards in Belgrade and our ads covered 150 of them. Now there are thousands of billboards."

Mr Vucicevic anticipates the arrival very shortly of leading international coffee brands in Serbia but professes not to be worried about the competition. "We are prepared for them," says the general manager. "The global brands are just that – they're not local. We know the Balkan markets, the people, their tastes and the images to which they aspire. We have the advantage."

30 March 2005