On the fifth day of October, a gathering takes place at a tavern in Iisalmi township, and the idea of establishing a brewery is discussed. Eight distinguished local community members attended the gathering, led by pharmacist Gustaf Ignatius. Also present was William Gideon Åberg, Master Brewer and manager of the Lahdentaka brewery in Kuopio, invited as an industry expert.
Image: Olvi barrels being tarred.
The first batch of beer is sold from the brewery. As mild beverages gain more popularity, Iisalmen Oluttehdas Oy starts to manufacture traditional ‘sahti’-type country ale and mead in 1892, followed by lemonade in 1906.
The entire stock of Iisalmen Oluttehdas Oy is transferred to E. W. Åberg and a period of development starts at the brewery, coincident with the Prohibition Act.
Kajaanin Kalja Oy is established. Spotting a gap in the market, Iisalmen Oluttehdas Oy had already set up a warehouse and sales office in Kajaani in 1920. The demand for mild malt beverages and soft drinks in the sales area was so high that the focus of operations was shifting to Kajaani.
The Prohibition Act is repealed. Kajaanin Kalja is renamed Oluttehdas Oiva Oy, and Iisalmen Oluttehdas Oy with its machinery is leased out to a new company. The manufacture of medium strength Class III lager recommences at Oiva after a 15 year break.
A milder Class II beer was also produced but failed to find acceptance from consumers who disagreed with the Prohibition. Production of this ‘mellan’ variety at Oiva was terminated already in 1933.
Oluttehdas Oiva Oy and Iisalmen Oluttehdas Oy merge to form Oiva.
By order of the Ministry of Supply, the production of medium strength Class III beer for the domestic market is terminated. Oiva is permitted to manufacture Class III beer for German military units using malts supplied by them. The sales of the lightest Class I beer and soft drinks are skyrocketing.
The company name is changed to Olvi Oy. The intention was to shorten it to Oiva Oy but this was turned down by the Ministry of Trade and Industry. When the Helsinki-based brewery Olvi Oy terminated its operations, Oiva bought the rights to the company name and logo.
Image: Honorary Industrial Counsellor E. W. Åberg with Hedwig Åberg
Honorary Industrial Counsellor E. W. Åberg and his wife Hedwig Åberg established the Olvi Foundation. The majority of shares in Olvi Oy was transferred to Olvi Foundation.
A new sales area arrangement for beer becomes into effect. This meant that each Oy Alkoholiliike Ab store could only sell the beer of the brewery closest to its locality.
The sales area arrangement was not favourable for Olvi: sales of strong beer fell almost a quarter from the previous year. Furthermore, the manufacture of strong Class A III beer, also known as Class IV, was not permitted for all breweries. It was only in 1955 that Olvi was allowed to brew strong beer, and Olvi’s best-selling product in the 1950s was light Class I lager.
All breweries are permitted to manufacture Class A strong beer. Following a relief of the sales area arrangement regulations, the demand for Olvi’s products increases. The number of entrepreneurs in the brewing industry decreases and Olvi concentrates its market expansion efforts in the larger cities of Southern Finland and in acquiring major customers. New soft drinks are developed, however, the key product in the early 1960s is still light Class I beer.
The sales area arrangement for strong Class A beer was discontinued in 1964.
On 1 January 1969, the number of sales outlets for medium strength beer jumped from 800 to 20,000 nationwide. Olvi developed two new medium strength beers, Kesti and Kievari, for the expanding market. Medium strength beer becomes Olvi’s key product.
Temperance enthusiasm combined with municipal bans on medium strength beer severely complicated Olvi’s operations, because there were more prohibition municipalities (that is, municipalities in which the local councils had forbidden either off-licence or on-licence sales or both) in Olvi’s marketing area than anywhere else in the country.
When the cost of market area expansion proved problematic, it was decided to rationalise the operations. The market area was reduced and so whilst the sales volume in litres diminished, profitability improved as a result of the operational savings.
New legislation forbidding alcohol advertising enters into force. New labels introduced for Olvi’s products.
Olvi’s centenary year.
Soft drinks were Olvi’s best-selling products from 1971 to 1980.
Olvi decides upon an initial public offering leading to OTC listing.
The share issue brings in new capital of some 12.3 million marks, which is used for purposes such as increasing the tank capacity of the fermentation cellar. The share issue triggered Olvi’s tremendous growth in the upcoming years.
Sonkari merges with Olvi. Olvi experimented in the juice industry through Sonkari Oy, whose share capital was transferred into Olvi Oy’s possession during the 1980s. Sonkari was renamed Kesäpäivä, meaning ‘summer day’. However, the juice industry failed to meet Olvi’s expectations so it was given up a couple of years later.
Olvi acquires a 15 percent share in AS Tartu Õlletehas, and in the following year, the company is transferred into Olvi’s full ownership together with its subsidiary, Saare Õlu.
Olvi revolutionises beer sales by launching the first original 6-pack in Finland for OLVI III medium strength beer (at the time called OLVI Special).
A similar move is attempted with the new beer brand Bisse containing less alcohol. This results in lower taxation and a lower sales price, but the Finns did not enjoy the ‘diluted’ beer.
Olvi celebrates its 120th anniversary with the launch of a new beer brand called Olvi CXX in Roman numerals to honour the significant milestone. The launch is successful, by far the most successful beer launch in Finland in the last 20 years. Due to cannibalisation, Olvi CXX is renamed simply CXX as of the beginning of 2000, and the name remains in use until the end of 2003.
Olvi acquires the FIZZ cider brand and divests its holding in Chymos-juomat Oy.
Olvi is listed on the main list of the Helsinki Exchange (previously on the OTC list since 1987) and launches its “Don’t take it seriously” advertising campaign. The campaign lasted until 2004, when it was superseded by the ”Finnish parlour game” campaign.
In April, Olvi acquires a majority holding in the Latvian company A/S Cesu Alus, followed by a minority holding in the Lithuanian company AB Ragutis in September. Olvi revolutionises the cider product group by launching the world’s first light cider, FIZZ Light Perry. At the end of the year, the first 12-pack is launched in Finland – and little did we see that the beer market would never be the same again. Initially, the 12-packs were in a 3x4 bottle format, and the products were CXX Millennium Edition and FIZZ Millennium Cider. Olvi subsequently introduced the 2x6 bottle format, which was yet another first in the Finnish market.
Olvi’s share of ownership in AB Ragutis increases to just over 50%. AB Ragutis becomes Olvi’s subsidiary. 2000 is a year of investments: Olvi’s gross capital expenditure amounts to 23.1 million euro.
Olvi becomes the only brewery that has remained in independent Finnish ownership since the 19th century. The company responds proactively to changes in competition and its original Finnish character is being slowly cultivated as a competitive advantage. Olvi retains its domestic market position in its major product groups, namely, beers, ciders and mineral waters.
Olvi Group’s position is also further strengthened in the Baltic States. The company aligned itself with the prevalent retro trend through the launch of a series of soft drinks called Honolulu and Mombasa, which was augmented in 2003 with Rio Grande. The design and layout of the soft drink labels were based on Olvi’s own labels from the 1950s and 1960s. The products sold well at the points of sale where they were available and made an excellent return for the company. However, the novelty of their charm quickly wore off and the series was discontinued in 2004.
Olvi’s jubilee year – celebrating 125 years of brewing
The brewery commemorated its anniversary with work and large-scale events.
Olvi’s logo was modernised. The barrel design in its various forms has been Olvi’s logo since 1947. The designer was Marko Salonen at PHS advertising agency. While the traditional barrel was retained, and its use increased, it was modernised and streamlined and made more Finnish. The logo became timelessly tasteful and classically striking without being boring.
A year of change in the beer market
The excise tax on beer was reduced by 32%, and aggressive price campaigning of the ‘dachshund’ (12-pack) begun.
The Baltic countries joined the EU on 1st May 2004, and this doubled annual beer imports by Finnish travellers. Approximately 55 million litres of beer was imported, making up 12% of total consumption.
A year of change at Olvi
All OLVI brand beers were given a new look, which was described as lighter, younger, and more interesting in comparison to the previous look.
Sandels also received a new look – albeit a more subtle one. However, the change improved the Sandels beer brand’s shelf performance and it emphasises better than ever the strong and smooth characteristics of Sandels.
In 2004 all indicators showed a measurable strengthening of Olvi’s role in the beer market. Market shares were increasing, advertising was more memorable and consumers’ spontaneous mental images of OLVI became stronger. More than ever OLVI is accepted among the consumers’ informed choices.
When long-term Managing Director Markku Rönkkö took up a new position with Atro Oyj, Lasse Aho started as the new Managing Director at Olvi in August 2004.
Favourable development of Olvi’s business
The period is characterised by efficiency improvements accompanied by increases in operating profit and profitability. TEHO Energy Drink is launched in April and immediately captures an approximate share of 15% of the energy drink market.
Following Lordi’s victory in the Eurovision Song Contest in May, Olvi brought Lordi Cola and Lordi Cola Light to the market in September.
In the spring, an import and representation agreement for Finland was concluded with Heineken. Olvi’s Baltic subsidiaries had already represented Heineken in their respective countries.
A great year for long drinks
Following a nine-year break, Olvi decided to re-enter the market of ‘grocery store long drinks’ manufactured by fermentation with an alcohol content of 4.7 percent. The launch was executed through an expansion of the OLVI brand, and the Positively Finnish OLVI Grapefruit Long Drink succeeded in rapidly obtaining almost 10% of the market segment.
At the same time, Palmu Long Drink distributed through Alko outlets and on-licence sales was replaced by A. Le Coq GIN Long Drink, which is the market leader among long drinks in Estonia.
Olvi’s soft drinks for children are widely enjoyed. Olvi wanted to offer something completely new by launching Donald Duck soft drinks, which were the first foodstuffs in Finland to meet Disney’s criteria: “Loved by kids, trusted by moms”.
Other important new introductions included OLVI Ykkönen light beer in 0.5-litre cans, as well as the Finland 90 Years Anniversary Beer.
In the spring, co-operation commenced with Harri Koskinen, who was at the time the most successful and internationally recognised Finnish designer. Koskinen designed the refundable, recyclable plastic bottles for Olvi in the sizes of 0.5 L, 0.95 L, 1.5 L and 2 L. The subtle attractiveness of the bottle’s design will make it a timeless classic. Olvi’s barrel logo was embossed three times on the bottle, as well as the text ‘OLVI 1878 FINLAND 2007 DESIGN HARRI KOSKINEN’.
In honour of the jubilee year Olvi Festive Beer 125 was launched as a tasty special beer with an alcohol content of 6% vol., available from Alko outlets and on-licence sales.
Olvi’s subsidiary AS A. Le Coq acquired the entire stock of the Estonian company OÜ Finelin.
The Olvi brand is powerful
The Markkinointi&Mainonta trade journal commissioned a brand survey from the Taloustutkimus research agency (26 September 2008), and the result showed that Olvi has quickly risen to become the most appreciated beer brand by consumers in 2008. In the previous year, Olvi was second.
The barrel logo becomes the only official logo of the 130-year-old brewery. The positive and Olvi-like logo has been with the company since 1952.
In October 2008 Olvi expands eastward in a move to ensure its future growth through the acquisition of a 51 percent shareholding in the Lidskoe Pivo brewery in Belarus.
In 2008, the entire industry suffers a setback due to the slower-than-expected transfer to the new refundable, recyclable plastic bottle system. The costs of two systems are a burden on the entire Finnish brewing industry. The industry has to adapt its operations to the changing operating environment.
The brewery group “bottled” a good result in 2009
Strong performance across the entire operating area of Olvi Group. Olvi Group set new records for net sales, sales volume and operating profit. The Group’s market position remained good.
Investments brought results. Olvi is a secure supplier. After the transitional phase in packaging systems in Finland, internal logistics were able to operate smoothly. After the increase in canning capacity in Finland, the focus of the entire Group’s investments shifted from capacity increases to advancing the level of automation and developing internal logistics.
Olvi Group’s performance and growth was excellent in 2010
Olvi Group set new records for sales volume, net sales and operating profit.
The operating conditions during the year were extraordinary. In the beginning of the year, the very hard winter took its toll on sales and total consumption, while the record-breaking warm and long summer period made it possible to achieve all-time high sales across the entire operating area of Olvi Group.
During 2010, common mission statements, visions and values were defined for all of the Group’s units.
Olvi tackled the challenging market situation 2011
In Estonia, AS A. Le Coq was the country’s most profitable food industry company. The Latvian company A/S Cēsu Alus received distinction as a good employer whose operations are valued also from the viewpoint of environmental matters. New strategies and growth targets were drafted for the Lithuanian operations, with one of the crucial factors being a change of name from AB Ragutis to Volfas&Engelman during the spring of 2011, giving respect to old local beer-making traditions.
The parent company in Finland invested in improving the internal logistics in the storehouse, as well as new machines for labelling, cardboard packaging and wrapping. Olvi plc initiated a comprehensive energy survey. Energy taxes are increasing, and Olvi’s objective is to be friendly to the environment.
Healthy bankroll: Olvi Group’s financial position improved clearly during the year.
It pays to train your staff!
Olvi Group initiated a coaching and training programme covering the entire Group. The training was implemented in close co-operation with the University of Tartu. Training was provided first to the companies’ top management groups, followed by the managerial level.
Olvi Group continued its growth and made new all-time records in sales volume and net sales. The Group’s sales increased to 518 million litres, and net sales increased to 285.5 million euro.
Angry Birds became a strong soft drink brand for Olvi. Due to increased demand already in the spring, production in Finland adopted a five-shift system of round-the-clock manufacture seven days a week, and this continued until the end of the year as there was another peak in demand before the alcohol tax hike at the turn of the year.
For the first time ever, Olvi Group’s consolidated net sales exceeded 300 million euro. Net sales amounted to 312 million euro and the sales volume was up to 518 million litres. Operating profit improved to 30.5 million euro, which is an all-time high.
The sales volume, net sales and operating profit were all-time highs
The brewing industry directly employs about 2,000 people in Finland. About 30 per cent of jobs in the industry have already disappeared since 2002.
The advertisement of alcoholic beverages is now subject to even stricter regulation and taxes have been raised several times over the last few years, both on alcoholic beverages and soft drinks.
During the year, the overall market declined slightly, particularly due to excise tax hikes. Towards the end of the year, customers in Finland and Estonia made substantial purchases to top up their stocks before tax hikes affecting alcoholic and sugar-based products. Among the member states of the European Union, Finland has the highest taxes for brewery products and soft drinks.
Group-level sales and marketing co-operation was initiated with Warsteiner, the most widely known German beer worldwide.
Olvi Leadership Academy, an event of several days of training, was arranged and the Group-wide information bulletin My Olvi was introduced.
Challenges were faced in Finland 2014
Olvi plc was able to increase its sales volume and net sales in challenging conditions. The company’s market position strengthened in the main market areas. Weakened consumer purchasing power and changes in purchasing patterns, tax hikes effective as of the beginning of 2014, as well as price competition and increased private imports hampered the parent company’s profitability.
However, many positive things were seen during the year also in Finland. According to an extensive study of beer brands commissioned by the Markkinointi&Mainonta trade journal from the Taloustutkimus research agency (10/2014), Sandels and OLVI were regarded the most appreciated brands of beer.
A positive opportunity is the co-operation agreement signed by our Belarusian subsidiary OAO Lidskoe Pivo with PepsiCo, Inc., the second-largest soft drinks company in the world, with regard to the Belarusian market.
Olvi continued on a track of intensive investments in 2014.
Challenges in the brewing industry
The operating environment in 2015 was challenging, and the total markets in Olvi Group’s operating area clearly diminished, particularly in the high-season months.
Lithuanian company Volfas Engelman was ranked as the best Lithuanian company in the European Business Awards competition. The primary criteria for the choice were innovation, financial performance and business ethics.
The development of Olvi Group’s business is supported by the great appreciation enjoyed by our brands. The parent company’s Sandels and Olvi were elected the most appreciated brands of beer in Finland. Lidskoe beer was ranked as the number one brand in the Belarusian market. Volfas Engelman was successful in an annual customer survey, ranking second in a comparison of most liked beer brands. Volfas Engelman was also the most popular consumer brand in a competition arranged by the Lithuanian newspaper Verslo žinios.
Olvi Group’s sales volume in 2015 made an all-time high of 579.9 million litres. Several new products were launched during 2015 both in Finland and by the subsidiaries.
“Gone with the Lean”
Olvi Group has made active efforts towards developing its operations, among other things by utilising the Lean management philosophy in business control and development. Olvi’s determined work was recognised through the second prize in the annual national competition “Lean work of the year 2016” arranged by the Lean Association of Finland.
In addition to the recognition, our effort is shown as positive development in profitability, which enables us to produce increasing sales volumes smoothly while making further cuts on our environmental footprint. Development work has been done in all of the Group’s units and different operations.
The Group’s sales volume, net sales and operating profit improved on the previous year, and the balance sheet became stronger once again.
The company’s strong financial condition, the investments and operational developments in recent years combined with a good market position and strong appreciation of our brands provide a solid foundation for the new year and make it possible to persistently develop the company’s operations and shareholder value.