When Panayiotis Papaphilippou started his small confectionery business forty years ago, little did he know that it would be transformed into the ice cream giant we know today and a symbol of determination for local industry, accounting for one in every three ice creams sold in Cyprus.
Papafilipou Ice Cream, as it is commonly known, prides itself in using only fresh ingredients, even though fresh milk in Cyprus is also the most expensive in Europe, an obstacle that has not prevented the company from becoming the leader with a 32% share of the EUR 20 mln market. Imports account for about 45% of the market.
“The Cypriot consumer recognises and appreciates quality,” Panayiotis Papaphilippou told the Financial Mirror in an interview. “Ours is an all-natural ice cream and the consumer rewards us by remaining loyal to our brand.”
This is evident in the 5-10% increase the company enjoys in annual sales, with new export prospects in the pipeline this year for Bulgaria, Kuwait and the Gulf countries, as 90% of all production is sold locally.
“We have not been dependent on tourism for the past three years, focusing more on Cypriots and in 2009 we are increasing our production,” Papaphilippou said. The company has invested in a new fleet, is constantly hiring more people and will be extending its storage facilities and fridges over the next two years.
“Even in times of crisis, the consumer looks for good value for money,” he said, adding that the consumer will never stop to eat or drink.
However, Papaphilippou and his namesake partner, Panayiotis Christoforou, who also had a confectionery until the two merged their businesses in 1973, have never rested on their laurels and have instilled a philosophy of caring for the 120-strong workforce and reinvesting earnings back into the company. This helped Papaphilippou & Patisserie Panayiotis Ice Cream Ltd. overcome all the difficulties in the market and the seven members of the founders’ next generation that have taken over the day-to-day management of the company, continue along these same principles.
“In 1999-2000, when the boom of the imports started, we took the risk of reinvesting our earnings and we built our new factory at a cost of about CYP 7 mln (EUR 12 mln),” Papaphilippou said.
This is also the only ice cream maker licensed to produce the real ‘masticha’ flavour from Chios, and together with pistachio are the two flavours very popular in the Arab Gulf states.
The company’s premium brand is the Nostalgia range, while its most popular pre-packed product is the mini sandwich now available in a new family-pack and by 2010 there are plans to introduce a number of new products.
But nothing beats the trip to the flagship ice cream store in Makedonitissa where hundreds of people flock all year round, almost like a pilgrimage, to get their favourite flavours in a cone or a cup.
Panayiotis Papaphilippou wants to see a revival of the ‘pagotaria’ stores where people can sit and enjoy ice cream, with his company operating 6-7 such outlets of its own and a few more in the pipeline, as the company also invests in children’s parks near Latsia and Kokkinotrimithia. He said that only a few of the 13 companies have divested into such retail outlets, and those that have, reap the benefits.
Papaphilippou, a member of the Chamber of Commerce and Industry’s (KEVE) central council, is now trying to convince both the ice cream makers and importers that it is to their mutual benefit to increase the pie and to promote the consumption of ice cream throughout the year, winter and summer. There is no coordinated campaign to promote the health benefits of eating ice cream, he said.
But he also has a few words of advice and caution for his fellow industrialists.
“In difficult times you must reinvest your earnings to ensure the future of the company. We have upgraded our own La Patisserie confectionary and the workshop had enjoyed an increase turnover because of a rise in the number of weddings, plus, we added the ‘pagotaria’ section.”
“Manufacturing has a future in Cyprus, but only those that produce quality goods and service can survive. At the same time management costs must be controlled as the cost of financing and energy are affecting industry, as is the rising cost of raw materials and transportation.”
“I have great faith in the Cypriot industrialist that has survived all these years, and I think the state should recognise this,” Papaphilippou concluded.
Industry undergoing reform
Panayiotis Papaphilippou, whose name has become synonymous with the leading ice cream brand in Cyprus, has lived through difficult times that saw the company he established with his partner, Panayiotis Christoforou, at the brink of disaster, starting from the Turkish invasion that destroyed the economy in 1974, to the more recent gaffes such as the infamous ‘dioxine affair’ that resulted in millions being lost.
Papaphilippou said that not enough attention has been given by the state to health and other quality controls, which is why two crucial bodies are presently being established.
The first is the Food Council (Symvoulio Trofimon) that will be promoting legislation that will ultimately benefit the consumer and industry alike, as well as get involved to ensure the speedy resolution of food and health related problems. In other words this will become the supreme body for food controls.
Another new body is the Quality Controls Council (Symvoulio Proothisis Poiotitos) which has yet to secure government approval and urgently needs staff in order to get operational, as it will be tasked with regulating certification for ISO and HACCP standards that will help industries maintain a constant level of controls every year that will help exports and satisfy strict requirements set by hoteliers, restaurateurs and super market owners.
