Knabbernossi, Wojnar

High costs eat away at Vivatis’ earnings

Acquisitions and higher prices increased the turnover of the Upper Austrian food giant Vivatis to almost 1.3 billion euros last year. However, exploding costs make earnings look leaner.

Higher prices bring food giants strong increases in turnover. But earnings are falling due to high costs, according to Gerald Hackl, head of Vivatis, a manufacturer belonging to Raiffeisen Oberösterreich. It owns brands such as KnabberNossi, Wojnar and Inzersdorfer.

Hackl: "Despite a ten percent drop in costs compared to 2022, we are still 40 percent above the 2019 level." Specifically, Hackl mentions the high energy costs (+70% compared to 2019). Raw material prices are also 38% higher than before the pandemic. The brand manufacturer has to spend 20 percent more on packaging. "For 2024, we expect additional costs of 50 million euros again." This year, wage increases will be the main factor. Vivatis will not be able to pass on all of the additional costs, but will have to absorb them itself, according to the company.

Also because profit margins are falling and are even below three percent for some products, Vivatis is concentrating primarily on "healthy" growth from within the business. The last acquisition was the Romanian company Enigma, which complements the Maresi brand portfolio with non-food products. In addition, Austria's largest insect breeding facility was built in Andorf, Burgenland. In future, 2400 tons of fly larvae will be bred for the production of animal feed. The Styrian Vivatis subsidiary Purea will process the larvae into insect meal.

Gourmet subsidiary supplies 300,000 people
However, the Group's most important growth is at its subsidiary GMS Gourmet. Over 300,000 people are supplied here, for example in schools, hospitals and businesses. This is a very crisis-proof business. VIivatis has also founded a subsidiary in Germany. In Vienna, the portfolio also extends to higher levels: the Gerstner brand, known as a traditional coffee house and caterer of the Opera Ball, is flourishing.