Coffee producer Chibo SNG LLC changes its name to Tibio and brand to Tibio
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The former division of the German Tchibo GmbH “Tchibo CIS”, which was transferred to local top management in 2022, is changing its name and umbrella brand to Tibio. A renaming could be one of the terms of the deal, although the new brand and packaging design are similar to Tchibo. Updating the brand will lead to a decrease in sales and will require costs for product promotion, market participants warn.
Coffee producer Chibo CIS LLC will change its name to Tibio LLC and launch the umbrella brand Tibio instead of Tchibo. This follows from the company’s letter to retail chains dated November 3 and the Tibio presentation, a copy of which is available to Kommersant. As stated in the materials of “Chibo CIS”, the recipe and technology of coffee production will not change, the packaging design will maintain “maximum continuity”. Chibo CIS registered the Tibio brand in September, according to Rospatent data.
The transition to the Tibio brand will begin at the end of 2023 as the old packaging is phased out, the presentation said. As follows from the materials, the color scheme of the packaging and the names of the Gold Selection and Gold Mokka lines will remain the same, the Tibio logo will retain a similar style to Tchibo, and the Exclusive line will change its name to Arabica Exclusive. At the end of this year, it is also planned to launch Tibio Barista grain coffee in 1 kg packaging in the premium segment. According to a survey, the results of which are presented in the presentation, 88% of consumers have a positive perception of the packaging design with the new name.
Tchibo CIS previously belonged to the German Tchibo GmbH. The company produced coffee under a contract at the facilities of the Grand-NN factory in the Nizhny Novgorod region and imported part of the products. In the summer of 2022, MVK LLC, the general director of Chibo CIS, Mikhail Kovalevsky, became the owner of Tchibo CIS; MVK’s share is pledged to Tchibo GmbH. A Kommersant source familiar with the deal then said that Tchibo CIS could use the Tchibo brand until the end of 2022 (see Kommersant dated August 12, 2022). Chibo CIS, Tchibo GmbH and Grand-NN did not respond to Kommersant.
According to the owner of the Kaufman brand agency Stanislav Kaufman, given the transfer of Tchibo business in the Russian Federation to top management, the German company most likely knows about the name change. According to him, such an adaptation of an already well-known brand will make it possible to maintain the distribution that has been built over the years, excluding the presence of the flagship Tchibo brand on the Russian market.
Roschaykofe CEO Ramaz Chanturia says that any renaming of the product will lead to a decrease in sales, and to return to the performance of a previously well-known brand, marketing support of the new brand will be required. According to him, JDE, having abandoned the Jacobs name in Russia, retained the budget for promoting Monarch coffee (see Kommersant on March 24). MilFoods, which operates the former Paulig plant, also invested in the launch of the Poetti brand, adds Mr. Chanturia. At the same time, he continues, the Tchibo brand has occupied a small share in the Russian market in recent years, so it is unknown how much the company will have enough resources to support the launch of a new brand and how much similarity with Tchibo can help in sales of Tibio.
MilFoods Marketing Director Mikhail Glukhov confirms that changing a brand in the coffee category invariably entails a rollback of market share due to the loss of part of the audience and a decrease in production volumes. Poetti, he said, had a good starting position, and in the first half of 2023, the brand’s Net Promoter Index (NPS) grew by 50%. But, the top manager adds, without the current environment this would have been impossible, and now such a window of opportunity is gradually beginning to close.
NielsenIQ also noted stabilization in the breadth of assortment in food categories in 2023. According to analysts, the average number of hot drinks positions in retail chains in January-August 2023 was 1.4% less year-on-year. Sales of instant coffee in January-October at retail increased by 6% in volume and by 4% in money; bean coffee sales decreased by 15% and 12%, respectively. As Mikhail Glukhov notes, the category remains very competitive, and pressure from chains’ own brands and small suppliers is growing.
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