350,000 units of the limited black edition were sold worldwide. More than three million customers use the paid digital recipe subscription Cookido.
(Photo: Vorwerk)
Dusseldorf The digital food processor Thermomix and vacuum cleaners from Kobold are in demand worldwide like never before. The household helpers brought the traditional direct sales from Wuppertal record business for the second year in a row.
Overall, the family business increased its sales by 6.4 percent to 3.4 billion euros. 64 percent of the business is done abroad. The main source of revenue is the Thermomix. In its 50th anniversary year, the digital multifunction cooker increased its sales by 7.1 percent to 1.7 billion euros. 1.5 million devices were sold worldwide. Only in China was business down sharply. During the pandemic, the Chinese stayed away from demonstrations in cooking studios.
Business with the Kobold vacuum cleaner grew even more strongly: sales increased by 16.5 percent to 819 million euros. The vacuum cleaner had steadily lost market share over the past five years.
Not only the turnover, but also the profitability of Vorwerk has improved significantly. The operating margin of the Thermomix and Kobold divisions was 11.2 percent in 2021, after around 2.5 percent in 2019. The entire Vorwerk Group achieved an operating margin of 8.9 percent.
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Above all, sales have recently been expanded again: at the end of April there were more independent salespeople for Thermomix and Kobold than ever before. Within a year, the number rose from 88,200 to over 100,000 consultants worldwide. “Ultimately, the success of Vorwerk is based on personal advice and recommendation,” says CEO Thomas Stoffmehl, who took over from Reiner Strecker in July 2021, about the strategy. “The more consultants, the more business.”
>> Read here: Interview with Vorwerk boss Thomas Stoffmehl: “Lack of chips slows down Thermomix”
At the same time, Stoffmehl is consistently reorganizing the Vorwerk Group. The doctor of law came to Vorwerk in the summer of 2019. The advisory board brought him into the company after two years of declining sales. Stoffmehl is an expert in direct sales. For 14 years he worked in the management team of frozen food sales Bofrost. From 2015 to 2018 he managed the direct sales department LR Health & Beauty in Ahlen.
The new board spokesman at Vorwerk is consistently reorganizing direct sales.
(Photo: Vorwerk)
Under Stoffmehl, Vorwerk is now rigorously separating itself from unprofitable or less promising divisions. The tea machine Temial, which was considered the new hope when it was launched in 2018, will be discontinued. Stoffmehl had already announced this in February in the Handelsblatt. The tea machine made a loss of more than ten million euros in 2020 with a turnover of 2.5 million euros. After the cordless tool case Twercs, the Temial is the second innovation from Vorwerk that flopped despite investments amounting to millions.
Vorwerk also sold its cosmetics distributor Jafra, which is mainly active in America and most recently generated 313 million euros. Mexico’s Betterware acquired Jafra for $255 million. The building cleaning company Hectas was also sold. The medium-sized financier AKF remains under the Vorwerk umbrella. Instead, Vorwerk is planning acquisitions.
Margins of Thermomix and Kobold increased significantly
Vorwerk is the fourth largest direct sales company in the world. In Germany, the industry generated around 18.72 billion euros in 2020. Since 2011, sales have increased by 50 percent, according to the Federal Association of Direct Sales Germany. However, the pandemic has forced quite a few sales parties onto the internet. In 2020, sales in direct sales increased by 0.9 percent despite the corona crisis. There are no figures for 2021 yet.
“Consumers today expect shopping to be as easy and smooth as possible and they find that on the Internet,” says marketing expert Martin Fassnacht from the WHU business school in Düsseldorf. The Thermomix will not be able to escape this trend in the long run either.
Every tenth Vorwerk kitchen appliance is now sold online – via the consultants’ new websites. A third of online buyers still have the device demonstrated at home. “Online and direct sales are not a contradiction in terms,” emphasizes Stoffmehl. Like the Kobold, the Thermomix should also be available in Vorwerk stores by 2023.
Customers currently have to wait around ten to eleven weeks for the Thermomix. The reason is the global chip shortage. “Because of a single component that is difficult to obtain, a microcontroller, we had to reduce Thermomix production,” says Stoffmehl. The delivery delays are likely to last until well into the autumn. According to Vorwerk Stoffmehl, in the second half of the year, the price for the Thermomix will increase “very moderately”.
In any case, the order books are well filled. “We are heading for another record year at Thermomix and Kobold,” forecasts Stoffmehl.
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