Vladislav Cheburashkin: The growth in the cost of the finished product is most affected by the increase in the price of raw milk

Источник: The DairyNews
CEO and founder of the family farm Cheburashkin Brothers Vladislav Cheburashkin believes that production can be optimized by replacing non-profitable product lines, reducing logistics costs, improving construction and workflow, writes The DairyNews.

The expert noted that there are not so many effective mechanisms for reducing costs.

Vladislav Cheburashkin believes that cost reduction is a constant process in a developing enterprise. According to him, there are two main tasks - to increase sales and reduce costs.

‘We consider a standard set - to optimize the product matrix, that is, to replace non-profitable products; to reduce logistics costs; to create and execute work schedules better, in order to avoid working overtime. We will not do anything that can negatively affect the quality of products,’ the expert noted.

In his opinion, the increase in prices for raw milk, packaging, logistics, jam and starter cultures, spare parts are the most important current factors that increase the cost of the finished product. According to the expert, if the feed components become more expensive, and the ruble loses value, you can see an increase in the cost of the product.

‘Mandatory labeling also requires significant investments in equipment and support for this project. We estimate the increase in the cost price at 1-2 rubles per a standard bottle of milk. The policy of retail chains may change, for example, in the frequency of using discounts, and this affects the profitability of sales,’ said Vladislav Cheburashkin.

He added that with the increase in prices for the finished product, sales volumes are reduced.

‘I think that the general confidence in the future, the personal income and costs of our consumers, the importance of a healthy diet and trust in the brand - this is what determines the demand for our products. However, it is also important how the whole market and the premium segment behave, in which we work in particular. We can only produce as much as we can sell,’ said the expert.

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