AN OVERVIEW OF 2020
The world’s economies were severely impacted by the Covid-19 pandemic during the year, and Turkey was no exception. The global glassware sector, previously at the point of market saturation with only moderate growth, shrank by 25% in 2020 due to the pandemic. In March, the negative effect of the Covid-19 pandemic on global economies began to ease with the start of normalization steps.
The Turkish retail channel was not affected by the pandemic as much as foreign markets. However, Covid-19 case numbers began to rise from October onwards, causing the market to become weighed down by uncertainties and risks once again. Meanwhile, the hard landing in the HoReCa channel still affects the domestic market. A review of its year-end performance reveals that Şişecam Glassware saw the HoReCa channel contract significantly due to anti-pandemic restrictions imposed on the food & beverage sector. However, loss of sales from the HoReCa segment was offset by higher sales in the retail and B2B channels.
As domestic and foreign markets entered a downward trend, risks increased for the glassware sector. Delayed, reduced and/or cancelled customer orders were offset by scheduling furnace repairs (cold repair) to earlier dates and planned production line stoppages. Şişecam Glassware outperformed the sector average by managing the global crisis effectively, taking the right actions and implementing the right strategies. Şişecam Glassware exited fiscal year 2020 with 4% sales growth in Turkish Lira compared to the previous year.
ACHIEVEMENTS IN 2020
Şişecam Glassware focused on boosting operational efficiency and adopting lean business processes in 2020. Digital transformation efforts were prioritized to ensure seamless integration with advanced technologies. During the year, Şişecam Glassware accelerated its digital transformation with SAP S/4HANA in order to achieve more effective and rapid management of its core operations. As a part of its digital transformation drive, Şişecam Glassware moved its Tuzla Showroom, which had been closed for physical visits due to the pandemic, to the digital environment and made it accessible to customers. Road maps began to be developed for the e-commerce channel which grew even more quickly due to the pandemic. Şişecam Glassware aims to increase the sales volume made directly and/or via distributors both in Turkey and abroad.
Şişecam Glassware continued efforts to improve its distribution capabilities in target markets and enhance brand loyalty in Turkey and abroad. Despite limited growth in the market, key customer management and sales and operations planning (S&OP) strategies enable Şişecam Glassware to achieve the optimal balance of production, sales and inventory. Moreover, product price lists were reviewed in both domestic and foreign markets to set country-specific pricing strategies.
Antimicrobial V-Block
During the pandemic year of 2020, Şişecam Glassware aimed to develop innovative value-added products in line with evolving consumer needs and emerging primary trends. As part of these efforts, Şişecam Glassware introduced to the market the world’s first glassware products featuring antimicrobial coating: V-Block Technology. Şişecam’s proprietary V-Block coating can be applied to external surfaces of glass products to prevent harmful organisms that can remain and proliferate on glass surfaces. Providing 24/7 ultra-hygiene, this special formula is 94.1% effective against the Covid-19 virus, as independently confirmed by certified laboratories and the Republic of Turkey Ministry of Health. With the antimicrobial V-Block process, Şişecam aims to accelerate the post-pandemic normalization in the fight against Covid-19 while significantly contributing to the national economy with export sales.
Aware Collection: Made of 100% Recycled Glass
Şişecam’s 100% Recycled Glassware product development initiative is designed to raise awareness on sustainability and the environment. This also incorporates the concept of 100% recycled glass into Şişecam Glassware products. Some 21% less natural gas is consumed while manufacturing the products in this innovative series.
DESIGN ACTIVITIES
In 2020, the Glassware Design Department created 529 automated process products, 555 value added products, 278 hand-made products and 1,948 packaging designs.
Of these, 325 product, accessory and pattern designs have become commercial products. Finesse Rock & Pop products, designed by Umut Karaman for the Nude brand, received the prestigious Archiproducts Design Award 2020.
Ghost Zero designs, featuring the value proposition of being the glass with the world’s lightest grip handle, were presented by the Design Department in two different concepts.
New Stem Zero designs, named “Grace,” were developed to expand the series. Mist Light candle stand designs were developed with Tamer Nakışçı and added to the Mist series.
Secondary treatment processes continue to be applied to the Mask decorative product, which is designed to create extraordinary parts with an element of surprise.
Joint collaborations and co-designs were made with celebrated African female designers Fatima Ly, Selly Raby Kane and Sindiso Khumalo for the new Nude collection. This collection also serves as a corporate responsibility effort to lead the way for African female designers.
CATEGORY MANAGEMENT ACTIVITIES
The Roots and Wings SAP S/4HANA project pricing module was configured and tested prior to going-live. Price master data has been prepared for transfer to the live process.
Under the Roots and Wings Master Data Governance (MDG) project, Şişecam identified product characteristics and prepared master data for active products. Tests before the go-to-live process were completed for transfer of category management information in the product creation practice.
List prices were systematically studied for the target markets of Turkey and Russia based on product properties and segment information. The list prices were imported to the system based on the new pricing configuration in S4.
Drinkware Category
Şişecam Glassware engaged in further product development efforts in the beverage category, with a focus on developing offerings for the mid- and high-end segments, expanding its well-established series with additional sizes based on market needs, and adding features to existing products.
Product range defining studies were completed for antimicrobial products scheduled for production.
The upmarket series Timeless and Elysia were expanded with six and three new sizes, respectively. The Leafy series in this high-end segment was also launched with three size varieties. The Amber and Iconic series in the mid-segment were expanded with additional size options.
Interest in space-saving stackable products is increasing in the market. In response to this trend, Şişecam Glassware developed and marketed the Hill, Grande-Sunray and Highness series in three sizes in total. Stackable Timeless glasses in three different sizes were also added to the series.
Cold cut glass goblets with thin rims offer a richer tasting experience. The Napa and Veneto series featuring these properties were developed and introduced to the market.
Tableware Category
The Covid-19 pandemic caused people around the world to spend more time at home, fundamentally changing prior habits. This development boosted the share of the tableware category within Glassware’s total sales.
During the year, Şişecam Glassware further improved the footed serving products category – led by Paşabahçe with its rich product range. The “Petite Patisserie” serving platter was introduced featuring a high lid for use with smaller-sized cake and pastry servings in the patisserie household and catering segments. In the household products category, engraved versions were added to offer diversified dome lids for serving platters with standard footing, which recorded higher demand during the pandemic.
For plates and bowls, the largest subcategories of the tableware category, Şişecam Glassware launched the “Estrella” and “Frezya” series in the tableware and small bowl categories, respectively.
The “Timeless” series posted higher growth in the drinkware category. The series was expanded with an ice bucket addition from the tableware category.
The “Tokio” series, featuring products for serving breakfast and snacks, was further expanded with two new plate size options in 2020.
The bottle category, including the “Iconic” bottle with a generic design and watertight screw cap available in half- and one-liter sizes, was further developed in consideration of customers who prefer to store and consume their beverages in a glass bottle. This series was also used in patterned products.
Product development efforts for the upper segment yielded the large-volume, crystalline Pleats and Facade ice cream goblets for a stylish serving solution and the Lavinia oval serving bowl designed for dual use as a decorative object and a food serving bowl.
Kitchenware Category
Demand rose for the cooking and food storage product groups as people spent more time at home during the pandemic. This year, total (foreign-domestic) sales in the cooking (Borcam) category jumped 15% in EUR terms compared to the previous year.
Borcam sets designed in collaboration with Arda Türkmen posted significantly higher domestic sales on online channels. As a result, the collaboration was expanded by adding new Borcam cooking and food storage sets during the year.
For the healthy lifestyle concept, Şişecam Glassware expanded the “Borcam Nonstick” series with non-stick coating developed for use with glass. Three new sizes were added to the series.
Thanks to synergy with Şişecam Glass Packaging, a new product range in the economical segment was created under the Zestglass series in the Paşabahçe distribution channel. New plastic accessories were developed for seven molds included in the packaging group standard under the jar, oil dispenser bottle and vinegar dispenser bottle functions.
Based on results of competitive analyses, Şişecam Glassware decided to develop square and rectangle, small-volume food storage container products which were missing from the product range. Development of these products was completed. The products were launched at a competitive price level in the economical segment.
In the group of food storage containers with simple lids, Şişecam Glassware addressed consumer complaints related to the quality of plastic lids in the Snow Box and Chefs series. Based on the customer complaints, a material replacement and cost optimization were performed.
A new jar lid was developed for the “Harvest” large-volume pickle jar series, enabling these jars to sell at a lower price point. With this development, Şişecam Glassware achieved its objective of offering different products in national and discount sales channels. For product development purposes, Şişecam Glassware entered into collaboration with plastic suppliers to apply the accessory decoration methods used for cosmetic products to glassware. As a result, “Bella” jar lids can now be produced with different mold labeling even within the same production lot. This capability allows for greater product diversity for the B2B sector by applying customer-specific patterns and branding on jar lids.
Value-Added Products Category
In line with its Care for Next sustainability approach, Şişecam launched the Aware Collection initiative to produce glassware made of 100% recycled glass materials in order to leave a better world for future generations.
Şişecam Glassware enriched the product range featuring glittering gold rims in the Golden Touch Collection. The products were diversified for different segments based on customer demands.
Patterned collections consisting of glassware and tableware designed in line with WGSN trends of 2020 were introduced to global markets with theme-highlighted packaging.
A licensed product portfolio, developed in conjunction with Warner Bros and Disney for both adults and youth, was placed on store shelves to mark special days and periods.
Şişecam Glassware expanded the product range featuring double-layered metallic paint finishing in the Metallic Touch collection with beverage glass alternatives. The options included different colors and new handles.
The amber-colored Linden and Generation series, consisting of plate sets, bowl sets and beverage glasses, were launched with new packaging designs.
MARKETING ACTIVITIES
Due to the impact of the pandemic, sector and consumer needs, trends, sales targets and product launches changed throughout the year. In 2020, Şişecam Glassware’s marketing activities aimed to boost sales and deepen brand loyalty in the domestic market, and improve brand awareness and expand market share in target foreign markets. Marketing efforts during the year also targeted bolstering communication and engagement with channels, customers and end users.
During the early stages of the pandemic, end users spent heavily on food and hygiene products. In April, the “Stay Home, Stay Healthy” promotional campaign was executed in Turkey and Russia to promote Paşabahçe products that offered the best solutions in terms of health and hygiene. The campaign was also designed to boost sales by making glassware one of the first categories that come to the mind of shoppers. Communication campaigns were carried out across TV, radio and digital channels in Turkey. Special campaign communications were conducted in national and local food chains by using promotional materials to attract attention in retail stores where consumers were spending only a limited amount time.
On Mother’s Day, one of the most active periods for retail sales in May, Şişecam Glassware increased its sales volume at online and retail points of sale with the campaign “Best Gifts at Paşabahçe for Our Women with a Beautiful Heart.”
In June, only a limited number of retail points of sale were allowed to be opened due to lockdown restrictions. Şişecam Glassware performed communication campaigns on digital platforms and at retail food chains by highlighting and positioning Paşabahçe products as Father’s Day gifts that people can easily access at stores that remained open.
In 2020, Şişecam Glassware recorded a significant breakthrough by launching the Aware Collection which consists of products made of 100% recycled glass. In September, communication campaigns were carried out to promote this collection in Turkey and target foreign markets. Pursuant to Şişecam’s sustainability strategy, communication campaigns were conducted on digital channels and at points of sale that encouraged consumers to recycle glass and opt for glassware made of recycled glass.
During the Christmas season, one of the peak sales periods in retail, Şişecam Glassware supported sales with a communication campaign that positioned Paşabahçe products as stylish and lasting gifts.
V-Block technology, developed by the Şişecam Science, Technology and Design Centre, was one of Şişecam’s biggest innovations of 2020. Şişecam carried out marketing communication campaigns around Paşabahçe products featuring antimicrobial coating made possible with this advanced technology.
Paşabahçe’s Turkey and Global Instagram accounts were launched and began to be actively used to improve engagement with domestic and foreign customers and communicate campaigns more effectively via digital marketing. The Instagram Professional account was also actively managed to boost brand awareness and promote products in foreign markets for the HoReCa sector.
Şişecam Glassware performed marketing campaigns taking the form of social media activities, digital marketing, magazine advertisements, sponsorships and point of sale activities. These efforts aimed to increase brand awareness and support sales in Russia, Italy, England, Germany and Spain throughout the year.
In February, Şişecam Glassware participated in Ambiente, the leading consumer goods trade fair, held in Frankfurt, Germany. New Şişecam products were introduced at the trade show, and sales contacts were made with business partners, distributors and potential customers from across the world. In September, Şişecam Glassware participated in the Household trade fair in Moscow, one of the most important trade shows in the region. Şişecam received new orders and onboarded new customers at this major event.
Due to pandemic related restrictions, physical meetings, activities and trade fairs were cancelled starting from the second half of 2020. As an alternative, Şişecam Glassware participated in online trade shows and moved its showroom located at Tuzla headquarters to a digital platform. With this approach, Şişecam was able to engage with customers who could not visit the showroom due to pandemic lockdowns.
Şişecam Glassware provided marketing support to its domestic and foreign distributors to gain a bigger share of e-commerce sales volume, which rose significantly during the pandemic. As a result, Şişecam was able to boost its sales in this key channel.
NUDE
In 2020, total global sales revenue of Nude-branded products, including sales revenue in the Turkish market, decreased to USD 10.6 million. Nude worldwide sales were down 30% compared to the previous year due to the negative impact of the pandemic.
Target market sales in the retail and HoReCa channels rose 15% in China. Meanwhile, Nude product sales remained flat in Italy and the USA year-on-year. As a result of lockdown restrictions imposed due to the pandemic, total sales declined by 32% and 77% (in USD terms) in the USA and UK markets, respectively. Sales fell 25% (in Turkish Lira terms) in Turkey. During the year, the number of export markets for Nude products jumped by 18%, climbing to 82 countries in total.
Export turnover of Nude-branded products in the household sector went up 17% (in USD terms) compared to the previous year. Sales recorded on Nudeglass.com soared by 162% year-on-year.
In 2020, Şişecam Glassware launched three new Nude collections and 13 gift sets. Six Nude collections were expanded with new products.
Şişecam Glassware developed a Strategic Business Plan and Development Roadmap for the Nude brand as a result of a performance evaluation and submitted it to the Ministry under the Turquality program. The plan and roadmap were approved during the year. Thanks to this effort, Nude is now eligible to receive support payments for expenditures in target market countries approved by the Ministry.
“Finesse” glasses in the Rock & Pop Artist collection that launched in 2020 were presented with the Design award in the “Tableware” category by Archiproducts, the world’s largest online community of architects, designers and design fanatics.
During the year, Şişecam Glassware worked to support the HoReCa sector, which was experiencing one of its worst periods in modern times due to the pandemic. Through two different auctions, Şişecam Glassware contributed to the “Recovery Fund” of the World’s 50 Best Restaurants organization which aimed to provide substantial financial relief and assistance to the sector. In Turkey, all proceeds from the sales of the food and culinary arts author Cemre Torun’s book-magazine titled “Restoranlar Evde,” a compilation of Istanbul’s special meal recipes and food related stories, were distributed to people in need as identified by TURYID, a restaurant industry association. The Nude brand supported this effort by purchasing 100 magazines.
Şişecam Glassware Online conducted cocktail workshops, press conferences, digital launch and PR activities out as part of the launch of the new cocktail collection designed in collaboration with Remy Savage, an award-winning mixologist.
RETAIL STORE ACTIVITIES
2020 was a year marked by the unforeseen and widespread impact of the global pandemic. The retail industry was hit especially hard by this far-reaching crisis. However, Şişecam Glassware exited 2020 by outperforming the retail sector thanks to its successful business management practices.
Due to uncertainties in the retail environment, Şişecam Glassware suspended new investments, except for the Erenköy store. Meanwhile, the Ataköy and Brandium stores were closed as scheduled on August 31, 2020. The “Life” and “Boutique” concept stores at Kanyon shopping centre were merged to operate as a single retail store on September 18, 2020 in order to create synergies and improve commercial conditions. In parallel to the course of the global pandemic in Italy, the Milan store was closed on March 11, 2020. Şişecam Glassware ended fiscal year 2020 with 49 stores in Turkey. Two stores in Qatar and one franchise store in Saudi Arabia continued to operate despite being negatively affected by the pandemic.
The Şişecam Antique Glass Works Collection consists of glassware discovered in the Anatolia region. This special collection reflects a nearly 3,500-year history of glass, dating back to the Ottoman era, the Byzantine and Roman Empires and other ancient civilizations. During the year, Şişecam Glassware created special handcrafted glassware products as part this collection that reflects the time of the Roman Empire. On December 12, a selection of these unique commemorative items was offered to customers as a special offering at a limited number of retail stores with the Antique Glass Works Collection.
In 2020, Paşabahçe Mağazaları website recorded over 4 million visitors, up 33% year-on-year. Sales via this e-commerce channel tripled compared to the previous year. Launched in 2017, the Paşabahçe Club Card program member base jumped to 235 thousand persons in 2020. In addition, Paşabahçe Mağazaları Instagram account had over 1 million followers. A total of 600 thousand communications were sent to Paşabahçe Mağazaları loyalty card program members with their consent during the year. The “Life Is the Most Beautiful Gift” digital communication campaign attracted more than 500 thousand views this year.
In 2020, Paşabahçe Mağazaları reviewed its plans and strategies for the future. A new channel development strategy for the new normal was formulated by considering recent developments, such as growing demand for better customer experience, more services and omni-channels and integration of the physical world with the digital. Paşabahçe Mağazaları aims to boost retail sales and obtain a stronger portfolio structure against risks associated with the pandemic environment by diversifying its customer access channels.
CAMİŞ AMBALAJ SAN. A.Ş.
Camiş Ambalaj is an integrated concern capable of responding to its customers’ needs in every field, from marketing to creative design, production, after-sales services and packaging engineering. Thanks to its integrated structure, Camiş Ambalaj increased its sales revenue by 4% in 2020 despite the pandemic and challenging economic conditions.
Besides serving the glassware industry, Camiş Ambalaj provides services to the beverage and food sectors. The company is committed to expanding its market share with modernization-related investments.
EXPECTATIONS AND OBJECTIVES FOR 2021
As the glassware market shrank by 25% in 2020, global revenues for the sector also dropped significantly for the year. With normalization steps now underway, the glassware industry is expected to recover and offset its losses to a degree in 2021. Şişecam Glassware’s main objectives for the short-term include effectively managing the production, sales and inventory balance with current capacities; boosting exports and maintaining its current market position in Turkey by improving its level of services; and achieving sustainable profitability.
Şişecam Glassware is committed to achieving end-to-end operational excellence throughout the supply chain, from production to sales, while budgeting its investments accordingly. Accelerating its digital transformation with a focus on operational excellence, Şişecam Glassware plans to maintain its lean management approach and continue its automation and Industry 4.0 related efforts at full speed.
Şişecam Glassware prioritizes investments in product development processes that are aligned with consumer needs and primary trends. This approach to capital investment will continue.
Today, glassware market players are facing major financial challenges. As a result, opportunities for new acquisitions and business partnerships may arise in the market. Şişecam Glassware aims to evaluate opportunities for partnerships and other acquisitions by closely monitoring the course of the market in the coming year and beyond.
With steps toward normalization underway, sectors that directly impact glassware sales –travel-tourism, food & beverage and retail – are reviving, with European and American markets forecast to grow more quickly. Şişecam Glassware expects to rebound in the HoReCa channel in parallel with the recovery in the European tourism industry. The retail channel is also projected to improve with higher demand in discount stores. The USA is expected to be one of Şişecam’s leading glassware markets once people resume their former habit of dining out regularly. On the other hand, Şişecam Glassware maintains its leadership in the domestic market and plans to further enhance its brand loyalty through customer-oriented sales strategies.