“Cairo” is the name of the conference room where WELT meets Thomas Stoffmehl in an airport hotel in Düsseldorf. “But I’m glad that we’re not one room further,” says Vorwerk’s board spokesman upon his arrival. Then the interview would have taken place in the Moscow room.
In any case, Stoffmehl – like many managers and entrepreneurs at the moment – hastens to emphasize right at the beginning of the conversation that his company no longer has any connection with Russia. In the past, the Vorwerk flagship products Thermomix and Kobold were sold there via an independent distributor, albeit in manageable quantities.
“However, we immediately stopped delivering our products to Russia when the Ukraine war broke out,” reports Stoffmehl. The effects are negligible on the consolidated balance sheet. Nevertheless, the Russian attack has consequences for Vorwerk and fans of the luxury Thermomix food processor in a different way.
WORLD: What are the consequences of the Ukraine war for Vorwerk?
Thomas Stoffmehl: We are affected by the events of the war and we look at the suffering of the people with concern. The Vorwerk Community has therefore donated around 400,000 euros in immediate aid to the SOS Children’s Villages in the Ukraine and other aid organizations for the benefit of children in the Ukraine or on the run. As far as the economy is concerned: we don’t have our own activities in Russia and Ukraine. The direct impact on sales and revenue is marginal. Nevertheless, the war did not remain without consequences. Because what happens as a result on the energy and subsequently also on the raw materials markets has long since had noticeable consequences for us.
WORLD: What does noticeable consequences mean?
Stoffmehl: It’s about availability on the one hand and prices on the other. We need hundreds of components for our products. At the moment, however, we can no longer get every part in the desired quantity and/or on the desired date. With the Thermomix, for example, we sometimes lack semiconductors, but also controllers or plastic. As a result, we are sometimes unable to produce the quantities that we need. As a result, delivery times have recently increased significantly. It currently takes up to ten weeks for our customers to receive an ordered device. And that won’t improve again until autumn at the earliest. Customer demand remains high.
WORLD: That was the issue of availability. What are the consequences of the price increases for energy and material. How much more expensive is the Thermomix?
Fabric flour: A price increase for the Thermomix is likely. However, the premium will be moderate. It’s in the low to mid double digits.
WORLD: In 2020, Vorwerk benefited from the pandemic and recorded record sales for the Thermomix because people had to stay at home and cooked more themselves. How did 2021 go?
Fabric flour: In 2021 there were record numbers again. We have sold more than 1.5 million devices worldwide, with sales in the Thermomix division increasing by a good seven percent to almost 1.7 billion euros. And in 2022 we are planning another record. In any case, the incoming orders so far suggest this. And we are still a long way from market saturation. In Germany, it is estimated that less than five percent of households have a Thermomix. So there is still huge potential. And it’s hardly any different in other countries. Portugal has the highest market penetration at ten percent.
WORLD: Where is this strong growth coming from right now?
Fabric flour: The fact that there is also a corona effect cannot be denied. At the same time, however, we modified our strategy in 2019 and focused on person-supported direct sales. Of course, this also includes equipping the consultants with digital tools. We have massively increased the number of consultants. As of April 2022, 100,062 consultants are active for us, almost twice as many as in 2014. This is a very important point for the sales figures. The formula more consultants equals more quantity is not new and totally simple – but effective.
WORLD: Where do you get the many new consultants from?
Stoffmehl: Our Thermomix and Kobold brands are enjoying growing popularity, which plays into our hands – but it is also certain that there weren’t that many sectors in which additional income was possible during the Corona period. In addition, we offer our freelance consultants a maximum of flexibility – because each consultant can decide for himself how much time he wants to invest and when. And I’m sure that the new colleagues will stay for a while, because working at Vorwerk is ultimately worth it financially.
WORLD: You addressed the topic of digitization as part of the new strategy. The Thermomix is now also available online without a sales party in your own kitchen. To what extent does this cannibalize classic direct sales?
Cloth flour: Not at all. Because online is not a competitor for our consultants, but an additional sales and communication channel. Interested customers are not served from the company headquarters, but are automatically forwarded to the personal homepage of their local consultant, the so-called MySites. The most successful consultants get them from us, so you have to qualify for them. However, with us, no business can be bypassed by the consultant. That was different – and that was wrong at the time.
WORLD: How many devices are bought online?
Stoffmehl: Around ten percent of sales in Germany are now made via MySites. But that doesn’t mean that this business is completely anonymous. We offer everyone a device instruction at home – and around a third of the buyers use this welcome service. But of course there are also customers who do not want direct contact. We can now also reach this group with the MySites.
WORLD: What about building your own chain of stores?
Stoffmehl: There are currently 66 Vorwerk stores, 59 of which are in Germany. But I can imagine an expansion, initially to 150 to 200 stores in Europe. The many vacancies in the inner cities as a result of the corona pandemic can be an opportunity for us. But the same applies there: no business should be bypassed by the consultants.
WORLD: In total, Vorwerk has sales of almost 3.4 billion euros. The Thermomix alone accounts for half of the proceeds. How dangerous is this addiction?
Fabric flour: A certain dependency cannot be denied. It is there and will remain so for the foreseeable future. Otherwise we would be lying to ourselves. However, we are working hard to position Vorwerk more broadly, for example through innovations in the Kobold division. After many years of declining figures, the vacuum cleaner business has turned around – because the new cordless vacuum cleaner “Besserwischer” has hit the ground running and we also have significantly more consultants in this area. In 2021 there was growth from 703 to 819 million euros. And in 2022 we expect a jump of a similar magnitude.
WORLD: What about the Temial tea machine?
Stoffmehl: It fell well short of expectations. And not just in 2021. That’s why we are now closing the business, even if a lot of money was burned in the end. But this risk always exists. Entrepreneurship also means trying things out.
WORLD: In 2019 you also took the Twercs cordless tool set off the market. The two newly launched business areas of the past few years have thus flopped. When is the next big new Vorwerk thing coming?
Stoffmehl: We are constantly working on new developments. At the same time, we are now also planning acquisitions in order to have a third and/or fourth pillar alongside Thermomix and Kobold. The target area for this has been defined, without being able or willing to specify it in more detail now. Just this much: It has to be about the household, be it with devices or with services. We are now starting the market analysis and a targeted approach to companies.
WORLD: With Vorwerk Ventures, there is also a venture capital fund in the group. Did you get any tips there?
Stoffmehl: No, Vorwerk Ventures focuses on start-ups and invests in founding teams with disruptive product and service ideas. For another pillar, we look at already established companies and brands.
“Everything on shares” is the daily stock exchange shot from the WELT business editorial team. Every morning from 7 a.m. with the financial journalists from WELT. For stock market experts and beginners. Subscribe to the podcast on Spotify, Apple Podcast, Amazon Music and Deezer. Or directly via RSS feed.
