HoReCa Service OÜ started business in November 2002 when an office-warehouse was opened in Pärnu. Thanks to the founders’ long-term experience in the vegetable and fruit market the strategic decision to focus only on supplying HoReCa (hotels, restaurants, catering companies) niche was made.

The fact that by the end of 2002 the companies leaning towards HoReCa sector had not quite establish themselves was a definite advantage for entering the mentioned market segment. For competitors, supplying HoReCa sector was secondary business and not enough attention was paid to developing it. This gave the founders an opportunity to begin developing a business that had high risks but also great potential.

The primary aims were to cover 30% market share from competing wholesalers and establish a sales network that would cover the whole country. Brand and image were created for HoReCa Service to support the company’s aims based on its direction and distinguish from competitors.

To ensure the quality and wide range of products cooperation with Estonian fruit and vegetable growers and wholesalers began. The market takeover began from Pärnu where clients’ favour was quickly gained and stable orders and cash flow provided the founders with more security and possibilities for further developments.

The fact that the market in Pärnu depends largely on tourism, which is at its peak in summer, forced the company to find new options for expansion. The goal for 2003 was to enter Tartu market and in May of same year the Tartu branch was opened. The market share of Tartu HoReCa was more attractive from autumn to spring because of the active student life and larger net sales in catering sector. Such a target market and possibilities suited the company’s development path perfectly. The same supply sources and sales principles were used in Tartu. A local warehouse was established, sales team was drafted and necessary transport equipment for better customer service was obtained.

In summer of 2003 the preparations for entering the most desired Tallinn market began. In comparison with other areas where competition in HoReCa segment was little or none, the competitors in Tallinn were more seriously busy with developing the market services. Considering the investment capability of the company, entering Tallinn market was quite a risky step to take. In the worst-case scenario the branches in Tartu and Pärnu would not have been able to cover the costs of the Tallinn branch and the made investments would not have started earning back immediately. That kind of situation would have meant termination of business activities.

In Tallinn, the business began in rented warehouses and the branch office was opened in November of 2003. The opening of Tallinn office created a real storm on the market. The competitors reacted quickly and their first step was to lower the prices. HoReCa Service managed to hold on to its strategy despite the complicated circumstances in the first six months. Our prices were somewhat higher but we also provided a more flexible and high quality service.

To meet the needs of more demanding customers in Tallinn we had to adjust our supply sources and thus our co-work with foreign suppliers form Finland and Holland began. The import of goods created suitable conditions for the market takeover. Stable deliveries, independence from local wholesalers, competitive prices, expansion of product range and rising service quality boosted the company’s evolution and defined its character.