Slavko Ledić, Kraš: The Measure of Success Has Become Maintaining Balance in Business

I believe that many decision-makers in companies have been wondering in recent years whether they can think strategically in a state of permanent uncertainty and how to do so. The strategy is now actually infused with the ability to react as best as possible ad hoc to rapid changes in circumstances, and that is what we have applied in Kraš while facing recent challenges and as we enter the new business year.

Thinking Outside the Box

The complex economic environment makes accurate predictions impossible, so business projections for 2023 must have multiple scenarios. Regarding Kraš’s operations, we are satisfied with the fact that we managed to maintain stable operations in the past year, which was marked by numerous market turbulences.

The enormous jump in energy prices, rising costs, and reduced availability of raw materials, consequently high inflation threatening new consumer behavior changes, forced us to invest increased effort to protect all key stakeholders affected by our business – employees, shareholders, customers, and consumers.

All of these circumstances are still current, so their full effects will only be visible in the upcoming period. Due to the significant increase in input costs, the entire food sector, including the confectionery industry, is facing increasing pressures, and the room for rebalancing is becoming smaller.

Throughout this challenging period, Kraš has strived to ensure that increased production and operational costs are mitigated by adjusting internal processes so that the final product for consumers is as affordable as possible. Such a business decision is correct as long as the company can meet its obligations to employees and shareholders.

We are not in times when rising product prices mean additional profit for producers; rather, it is a result of more expensive operations. The formula for sustainable business has become achieving balance among all components, which requires constant reflection on possible optimizations in production, placement, and finance.

We have heard many times that crises are also opportunities. This is true because unknown situations and the necessity to keep our company afloat push us to think outside standard patterns and thus arrive at solutions that will ultimately contribute to business development. I always like to say that Kraš, with its more than 111 years of existence, has gone through various historical and thus economic changes. We view this episode in the same light.

Consumers Are Our Compass

Guided by a century of experience, we know that quality is our most recognizable trait and that it is precisely the guarantor of consumer loyalty. This is the foundation; the rest are added values. The confectionery sector is very dynamic, requiring constant creativity, which is why it is so inspiring. When you place products on the market that are not part of the basic basket, you must always be ready to offer something different and be very skilled at recognizing consumer trends.

Consumers are indeed our compass when it comes to new trends, and it is actually about detecting their needs, new habits, and desires that guide our assortment decisions. This approach is correct because it is solid material for building consumer trust, which has always been important to Kraš.

While there is an inseparable bond between Kraš and domestic consumers, export is no less a focus of our business, as Kraš is one of Croatia’s largest exporters, placing its products in over 40 countries. It is important for us to maintain this export continuity because every second kuna of revenue in Kraš is generated in foreign markets, so the next year will be marked by additional adjustments to the domestic market, as well as nurturing existing activities and striving to create new opportunities abroad.

The question of whether a recession will occur and slow economic growth remains open and current, and only with a deeper entry into the winter period will it be clearer how much energy prices have affected operational costs and how we will manage energy resources in the future, given that alternative solutions require time. Market changes are frequent and rapid, so we closely monitor all events that may impact Kraš’s operations.

We Have Developed Shock-Absorbing Tools

Operating in challenging circumstances in recent years, we have developed numerous tools that help us cope better with challenges that have often represented a shock to the business. Although we optimistically hope that there will be no more significant unpredictabilities, we are ready to enter 2023 boldly, keeping in mind that many indicators suggest that next year will not be easy either.

To navigate it, mutual understanding among companies, employees, and consumers will be crucial, as well as among the relevant institutions that care about creating a favorable business framework.

Kraš has accumulated knowledge, tradition, and recognition and has not stopped for more than a hundred years. This is our way of thinking: not to stop even when it is difficult, to be immensely persistent. Acting this way is easier when you know you are fighting for the right value, and it is undeniable that Kraš, not only as a business entity but also as a Croatian brand, is indeed valuable.