08 Apr Interview with George Kostianis, CEO and Giannis Markantes, Commercial Director of America Paliria, Greece
Greece’s agrifoods sector employs around 400,000 people, representing around 10% of employment. In 2021, the food and beverage sector hit revenues of €17.7 billion. How would you assess the performance of the sector what are some major milestones has Greece’s agrifoods industry passed in the last few years in terms assets, and capabilities?
Greece is famous for ingredients like olive oil, feta, and wine. However, consumer trends are changing and while consumers don’t forget about the deliciously nutritious Mediterranean ingredients, they are increasingly interested in ready-to-eat products. Paliria over the last few years has had growing sales numbers because this is where we consider ourselves experts. The Mediterranean diet is one of the most famous and healthy in the world and Paliria offers a wide range of ready-to-eat meal products. We may be the only company in Greece that does 80% of its business in international exports. We understand and cater for the Greek consumer and our products are in the supermarkets, but our main focus is international business. Our challenge is to understand the international consumer in the American, British, Australian and French markets. Our food is delicious and healthy, unprocessed, with legumes and greens without being plant based, ready-to-eat high-quality food.
We are interested in what is trending with consumers. We are developing a lot of ready-to-eat recipes and chilled meals. This concept of healthier and convenient is where we are meeting the consumer’s needs now and will be for the next several years. We have received very positive feedback from our American customers, with whom we work closely. They are trendsetters for the American market, always bringing innovative, new ideas to the table. Recently we have expanded our distribution around the US, currently making 30% of our total company turnover from the US, and we are still growing. We have more opportunities there and more projects in the pipeline.
80 per cent of our turnover comes from international business. We have a presence in worldwide retailers like Kroger, Whole Foods, Market Basket and many grocery chains in the US. Sometimes the products are under Paliria with Greek origin labels, sometimes under private label brands.
In 1957 the company started manufacturing Dolma, which still requires rolling by hand to this day, due to its fragile leaves. We have two large factories in Greece, as well as in Bulgaria, China, and Jordan. We spread ourselves around to maintain proximity to the customer and proximity to the supplier. We manufacture Dolma in Jordan because Dolma and vine leaves are consumed a lot in Arabic countries. As we expand, we learn more about our international consumers and this strengthens us as a company.
We do a lot of customization and are now close to introducing our ready-to-eat meals to Tesco, which is a huge supermarket chain; #1 in the UK market, so this is an important project for us. As of May, we will be distributing a range of famous ready-to-eat Greek recipes like moussaka, dolmas, and giant beans with tomato sauce that the Tesco consumer will find in the chiller, ready to “reheat and eat.”
Greek recipes and Greek Cuisine are the next big thing. Previously, Italian food became mainstream, now everybody is looking at Greek food, not only in the UK but also the US and the French markets are showing great interest. It began with Greek yogurt, mainly in the US and the UK. Now we are bringing a whole range of recipes from the Greek table for the whole family with options for everybody. There needs to be a seamless value chain and a certain level of trust with our distributors. Therefore, working with world-class retailers for us is a huge responsibility. Expanding puts pressure on the quality of our people, our teams, our equipment, and our know-how, but we look at that as a learning experience and an opportunity to improve.
Ready-to-eat food is now a big trend. People want to warm something up or eat it raw, but they believe there is a healthy, fresh connotation which is undisputable. One of the reasons that retailers trust us with their brands, is certainly the taste. We are also exporting to Costco now, which is in 5 countries, as well as with Marks & Spencer, who have the highest standards in the world with regards to quality, supply, and continuity. We distribute under our own brand, Paliria but we also do premium private labels. Authenticity and taste are the most important characteristics of our food. You expect Greek food to be authentic and tasty.
How do you manage the equation of growing your production and distribution market while maintaining the Greek authenticity and the quality and freshness of the products?
As we are growing into the ready-to-eat menus, we are very specialized in our production premises. For pies, we have a factory outside Athens, where we do all the customization, like blending the spinach with the cheese depending on the taste of the customer. In Jordan we recruited an all-female workforce who understand Dolma. We set up a state-of-the-art factory with the highest hygiene standards, and we found out that local women were wrapping dolma perfectly.
These Centers of Excellence at our factories allow us to produce with consistency on a higher scale. We invest in relevant technology without losing the craftmanship. We care about consistency and how we make the product, so the product we serve in the UK is the same quality as the product we serve in France and the same in Greece unless there is a request for customization beforehand.
According to Enterprise Greece, there have recently been several shifts in the Greek food market that have opened the market to the growth of significant R&D clusters, including the move towards organic products and other dietary trends. What kind of effort does the company put into R&D for new products and better food innovations for the consumer?
We work with a lot of agricultural products, so we greatly value our relationships with farmers. As part of our recently launched ESG program, we have implemented contract farming. We work with large cooperatives in Greece, Bulgaria and Italy, or wherever we operate because we require agricultural products of honest quality as we scale up. We need to think long term. With contract farming, we use eggplant, for example, it is a fantastic product, vine leaves, or Greek herbs.
We were only a Dolma company before and everything had to be handmade, so when producing food on a bigger scale, the question is how do we incorporate technology? We combine the formulation technology with the packaging technology. In our packaging technology, we strive for reusability and all the ESG goals of environmental protection. When it comes to formulation, we have our own way of doing things, for example how we blend our herbs with chickpeas. We’re investing in R&D, in people, relations and technology.
What impact have the growing trends of organic food sources and vegan options had on the company?
While we do offer an organic range, our range of food is more about the variants of taste, such as the spicy Dolma. The British market wanted moussaka with feta cheese. On one hand, we don’t want to alter the core elements of Greek food or lose the authenticity of Greek cuisine. It can’t be moussaka with lamb for example as moussaka doesn’t have lamb in it. We don’t want to alter the core ingredients too much to customize the products. We have ranges like dolma sweet or pies with which we can do different Greek herbs but it must be authentically Greek. The pies need Greek phyllo dough for example. The consumer wants a Greek recipe, and they want to find the food that they tasted in Greece. For us, this is a big challenge to make sure that what they eat here, they eat wherever they are. That is a big challenge in terms of product consistency, value chain, and marketing activation. We are doing a lot of research right now to understand the consumer locally. For example, the Spanish speaking community in America want extra spicy Dolma. In the UK, they want moussaka with feta. We want to stay with the consumer and understand what is authentic, what is tasty, and how we need to communicate.
How do you go about finding other partnerships in a big market like the US market?
Paliria started exporting to the US market in 1974, 50 years ago. The company has been dormant for around 30-40 years, not challenging the status quo. We assumed that, as Greeks, our products would be embraced by the Greek community and hopefully some others. Currently, however, we are changing this, moving forward with local players like Walmart, Costco, Kroger’s and Whole Foods. For us, this addition of new working partners is very important. We need to have the right distributors and the right partners, who understand Greek food. In the US now we are “pushing” our products on the market by participating in a lot of exhibitions like the Fancy Food Show, Expo East, Expo West. PMA, etc. We are everywhere and have had very positive results from attending these exhibitions.
We directly supply five supermarkets in the US. We have distributors that do traditional Paliria products in the ethnic markets and some other supermarkets. We also have distributors that have their own private labels. It is a huge market and right now they are pulling. It’s an evolution, or rather a revolution. The senior agents like Costco are also thinking about trends and long-term partnerships. Supply chain management and food confidence is something that you need to consider in the long term, so picking partners is as important for us as it is for them. One of the challenges to for us is to find the right people to work with for the long term.
Can you give me some key facts and figures about the company?
In 2023, we exceeded €100 million turnover for the first time ever. Our EBITDA margins are at approximately 20% which is reasonably high for food companies. We employ about 1,700 people across the world. We are a mini multinational, as we operate 5-6 locations worldwide. In terms of structure ownership, 2/3 of the company is owned by the Souliotis Family and 35% by VNK Capital which is a Greek fund started by Katsos family.
We firmly believe we are at the beginning of something very positive. One major advantage we have is that we are able to think both locally and globally simultaneously. We learn continually and reapply. We are not afraid of failure; if we fail, we reassess and take another approach to the challenge, working on enlarging our global footprint. From our portfolio, 80% of the recipes are authentic Greek recipes for ready-to-eat meals. There may be a “global” recipe in there, but our motto is “Taste the Best of Greece”. We are the best of Greece in ready-to-eat food. Nobody else does what we do in Greece because it is a difficult business, so there is no competition for us. Currently our R&D department are also considering regional cuisine with, perhaps, the “Best of Santorini”. We are looking to further develop our recipes without losing or diluting their authenticity.
What is your final message to the readers of USA Today?
We believe we can represent Greece and provide authentic ready-to-eat Greek food overseas. We have the vision, and we are very serious about executing it. We have long term vision with a short-term execution intelligence horizon, and we are committed to delivering our vision of Greek food overseas. We are making it happen, we believe our vision and we have the right resources to accomplish it. Individually, and as Greeks, it is a vision that we are proud to deliver.