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E.WEDEL The Sweet Shark that Survived Communism
Poland’s Economic Transition Uniwesytet Gdaoski MSG SMSU IB 23.04.2012
It is definitely not perceived as a product of those times. They are the most recognizable. Frania became more of a backward relic. we chose this particular one as we found it quite distinctive from the rest. Out of all the other sharks.NTRODUCTION For the purpose of this paper. which produced goods no longer attractive or competitive. is not associated with socialism. . they had nothing more to offer. They still grow to be one of the biggest polish brands. Wedel. This is not an easy task to fulfill. They didn’t live up to the new technology. reminding people of the hard times then an attractive product everyone desired. popular. We tend to seek the grounds for company’s profitability in the company’s profile obtained from the very beginning. new trends or new needs. Colourful commercials advertizing western goods were something that couldn’t be beaten. were they associated with the past. and marketing skills.E. Wedel’s sweets managed to be a part of this new trend. especially in the market flooded with hundreds of competitive wares and constantly emerging new brands. Just regular candies everyone liked that matched every timeperiod. At no point. communistic history of Poland? Or the car Warszawa? Isn’t it inseparable with the period of long queues. but also a new life style . Not only were they promoting new products. we decided to analyze the history of Poland’s sweetest company . and outstanding sweets with tradition that everyone is proud of. the decisions made by the management.something that until that time was unavailable. which managed to survive communism. empty shelves and profound censorship? Those companies either no longer exist or had to redirect their production. They survived the hardest period but when the boom came and brought a vast amount of products from the West. Wedel. with a new life and new colourful products. Everyone wanted to be that new person. Who doesn’t see the washing machine Frania as the synonym of the dark. E. These three basic elements turned out to be the key to success. They are no longer just regular. in contrary to all the other companies.
Wedel”. he decided to introduce an emblem of his own signature on every chocolate label. Afterwards. For this purpose. interned in Germany.WEDEL’S HISTORY The company traces its roots back to 1845 when Charles Ernest Henrik Wedel moved to Warsaw and went into partnership with Charles Grohnert. Emil Wedel. he employed the finest graphic artists in town.68 rubles. company still invested in marketing. an educated in Berlin confectioner. E. became the new owner of the family company. Despite the popularity that Wedel’s products gained right after being released. had a native flair for business and sweets.E. In 1865. which was absolutely revolutionary for that time. England and France. moved to a bigger place. whose estimated value grew up to 5 000 rubles. Charles Wedel’s son. a secessionist tenement house. should be treated as a counterfeit. Wedel. he sent a note to every boutique selling his products both in the country and abroad. In 1852. After quick adaptation. Liquid chocolate was sold in the amount of over 500 cups per day. To protect his products from counterfeiting. designed by famous architect Brauman. There. entered the market. Warsaw Courier wrote -‘Brand new and completely exceptional confectioner’s composition (…)’. That was one of the crucial periods in the history of Wedel. his first product. The company’s production capacity extended in 1855 after importing from Paris a special machine for rolling the filling. Then the next hit came. They did not have to wait long for the results. introduced a variety of cakes which were a total novelty and six years later opened his own steam factory of chocolate called “C. was built in the central part of Warsaw. every chocolate bar without his signature on. educated abroad. Right next to the boutique . informing that from that time on. Wedel started producing several kinds of different chocolate bars with the use of French machinery. The initial capital was not higher than 300 rubles whereas the estimated wealth in 1862 was over 1 071. Emil Wedel. Switzerland. creamy caramel. It received fabulous reviews in the newspapers. Their advertisements appeared constantly in every newspaper.Wedel’s magnificent company boutique called ‘ Old fashioned’ appeared. Two years later. the mushrooming company. Soon after. He also offered a commission from the sale of his goods.
London. yearly stay at one the summer resorts and membership at a sports club. was forbidden to visit and manage the factory. In addition to this whole social package. clinic. Sweets with Wedel’s signature were available in almost every city in Poland. Most of the money received by Wedel’s family as a form of compensation for the illegal use of the brand name by a national establishment. In comparison. Jan Wedel. the state decided to change the name to something more familiar to the customers. A special truck with the company’s logo was distributing the goods in the country. A new factory in Praga came into being.a lovely café opened. ‘D. Jan Wedel. People who worked in Wedel were covered by broad social care . Unknown brand was badly sold on the market.22 of July used to be the most important national holiday commemorating signing the PKWN Manifest in 1944.’ stating for former. This tradition died when golden coins stopped being produced. Wedel became a joint-stock company. The new owner. Right before denationalizing.day nursery. kindergarten.RWD-13 was bought with the ability to fly for 600km without stopping. drinking hot chocolate. New York. the next manager of the company. ¼ was meant for sale. every fat Thursday was celebrated by Wedel by baking donuts stuffed with golden rubbles. Wedel’s products were delivered to France without charging clients for transport costs. In 1945. In 1932. An airplane . Wedel was building houses for his employees. 40% of its shares were bought by PepsiCo for 25 million of dollars. the company was nationalized. were spent on charity. ‘22 lipca d. the process of denationalizing of the company began. Up until 1968. Vilnius and Lvov. THE HUGE TURNOVER In 1989. . He set up a vending machine selling his sweets next to the entrance to Skaryszewski Park. Even despite the idea of the name. The name was changed to ‘Zakłady 22 lipca’. the state came back to the old brand name. Straight after the state decided to denationalize the company. Wedel didn’t have to struggle with economical problems. It was a perfect place for meetings. The Wedel Company kept on growing.Wedel’ appeared. and eating Wedel’s sweets. Facing a failure. Most of the shares were kept in the hands of the family. E. was a creative person.
fruit drops. According to the agreement signed between the state and PepsiCo. whereas ‘Jedynka’ (chocolate) to the British Cadbury. American Pepsi giant was allowed buy more shares only if the 3-years agreement is fulfilled.11. This capital was spent on a new production center. producing halvah. At the end of 2010. all rights were . European Commission requested the sale of Wedel’s logo. and peppermints was bought by finish Leaf. During the years 1992 -1995. the latter was allowed to sell its products under Wedel’s label. which refused to pay for the right to Wedel’s signature and started producing its products under its own label.reaching the status of the leader on 50 local markets by 1998 and doubling the company’s income every five years. ‘Syrena’. Soon after the company was transformed into a holdning of four companies.taxes paid by the state for Wedel in 1991 reached 15 million of dollars. It turned pretty fast that PepsiCo was interested in only one of then. Wedel made its first appearance on the stock exchange on the 26. which significantly lowered the costs and risk of introducing a new brand onto the market. Shares were priced for 18 PLN. ‘Delicje’ (cookies) were sold to Danone Group. and stream factory. It was also in possession of professional production technology. Wedel’s central location in Europe was to provide PepsiCo with an ideal distribution center for its salty snacks. Fearing that Kraft Food might monopolize the Polish chocolate market. Americans invested 971 000 USD in protecting the environment. The last company registered production under the name ‘Cadbury-Wedel’. new owner invested 51 994 000 USD (39 700 000 USD) required in the development of the company. PepsiCo got released from paying taxes for the next three years. new technology. both inside the country and abroad. The company was divided and Wedel’s four daughters got into different hands. What appealed to this American company was the fact that Wedel had good reputation. In 1998. The value increased significantly during the next years. That was the main stream of the production and all the investments. PepsiCo decided to sell Wedel and concentrate on salty snacks. boutiques.1991. Cadbury was overtaken by an American company – Kraft Foods. modernization and sustaining the employment level. In addition to those expenses. The new owner’s goal was simple . In 2010.Frito Lay producing chips and salty snacks.
got its advertisements in every newspaper. It did not have to fear the flood of new products or the new lifestyle. and trust Wedel had. Nevertheless. That it was overtaken by foreign consortiums. and opened a café where people could eat their sweets and relax. It was not the ghost of the past. People love novelties and the Wedel family knew that. people still love novelties and still fall for them. They cared for their customers and employees. SUMMARY One can say that Wedel did not make it till our times. the new lifestyle. It was associated with high-life. A random customer is not even aware of this fact. baked donuts with golden coins. They introduced new technological solutions. only one company decided not to buy the rights for Wedel sign. But on what grounds would one claim that? Almost all companies are now in the hands of huge. . changed. Both. new kinds of sweets. and we believe that it still is. They lived abroad and saw ‘how they were doing it over there’. The company invested in public relations. They came back to Poland with open minds and a vast amount of ideas.bought by LOTTE Group. Although. tradition. Wedel still produces under its brand name proves its power. Who would read the labels? We tend to believe that despite being overtaken several times. Because it was always. the founder and his son were well educated and imaginative. international conglomerates. Famous signature turned to be a well-recognizable sign with great reputation and millions of clients. it is risky to introduce a new brand. western customs. The rest realized what power comes with the long history. Wedel is a leader setting the new trends with a sweet little hint. played and used. Wedel’s success lies mainly in the people who established it. and new-age solutions. which appeared under a brand new name ‘Lotte Wedel’ a year later. and new types of marketing. That it is no longer the Wedel that it used to be. Considering all that. it appears clear why Wedel did not struggle during the transformation and why it did not go bankrupt.
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