Toms Group, Denmark’s premier confectionery manufacturer, is undergoing a significant operational shift by reducing its presence in the Danish market while simultaneously expanding its Polish facility.
The company, known for its branded sweets and pick-and-mix offerings, will cease chocolate production at its longstanding Ballerup location, established in 1962, but plans to maintain its headquarters there. Following this transition, Toms will operate only one sweets production site in Denmark—the Helseholmen factory—dedicated to confectioneries like liquorice and wine gums. The Nowa Sól plant, situated in Poland’s Lubusz Voivodeship, is set to receive substantial investment for its expansion.
A significant investment, reportedly a “nine-figure” sum, is slated for the Nowa Sól facility over the coming years, aimed at creating additional capacity to offset the reduction at Ballerup. Although Toms has not disclosed the precise investment amount, a company spokesperson said that enhancements at the Polish site are expected to conclude by 2028.
The staff change at Ballerup is projected to impact “less than” 100 positions, though some employees might transition to the Helseholmen facility. Conversely, the Nowa Sól expansion is anticipated to generate approximately 90-100 new jobs once fully operational.
“The transformation is an impactful strategic action to support our vision of creating a profitable, growing, and competitive Toms,” stated CEO Annette Zeipel.
She emphasized that this reorganization will enhance Toms’ profitability, streamline operations, and bolster strategic sourcing initiatives, aligning with food and beverage industry trends.
Notably, Toms’ net profit for the 2023 fiscal year plummeted 25% to DKr54.3m ($7.6m), while EBIT fell by 1.5% to DKr97.6m. Conversely, revenues rose by 3.1% to DKr1.7bn, as reported in the company’s April annual results covering its brands like Toms Guld Barre, Anthon Berg, and Hachez.
The company’s operations span across Europe, with Denmark being its largest revenue source. Additionally, Toms exports to North America, China, Australia, and the Middle East. Despite this, 2023 proved to be “challenging,” with rising raw material costs, currency fluctuations, and increasing consumer demand for promotions and private-label products during inflationary times.
Looking ahead, Zeipel conveyed that Toms’s outlook for 2024 indicates ongoing margin challenges due to rising raw material costs, especially for cocoa, paired with consumer behavior stabilizing from last year’s inflationary shifts.
The gross margin decreased by 170 basis points to 27.5%. In the statement regarding operational changes, Zeipel affirmed, “This is an investment in the future of building a stronger Toms Group.” She highlighted that improved profitability would facilitate further investments in cherished brands, innovative products, international expansion, sustainability commitments, and talent development.
Zeipel noted that the transition from Ballerup could span three to four years, yet no immediate job impacts for Ballerup staff are expected in the next two years. She asserted, “This transition is a necessary part of our efforts to strengthen Toms Group’s position as a modern and profitable company.”
In summary, as Toms Group realigns its production strategy, it emphasizes resilience and adaptability in a fluctuating market. The reorganization promises to enhance operational efficiency and address evolving food and drink consumer trends, reaffirming Toms’s commitment to its long-term growth trajectory in the food and beverage industry.
