Last year, consumer frugality once again put pressure on the activities of Thermomix manufacturer Vorwerk. The German family business, known for its direct sales with representatives, sold fewer units of the popular food processor for the second year in a row. “We feel the reluctance to buy. Our consultants must show more effort and do more demonstrations to reach the conclusion,” says Vorwerk boss Thomas Stoffmehl.
The year 2023 still went significantly better than the previous one. The bottom line is that Vorwerk was able to increase its annual profit to 133 million euros, almost tripling it. According to its own statements, the group benefited from the significant easing of the situation regarding energy prices and supply chains. Prices for individual parts, shipping and logistics costs have fallen, the company said.
Thermomix as Cash-Cow
Vorwerk’s most important product is still the Thermomix, invented in 1971. More than 50 percent of sales come from the TM6, the current model of the 1,500 euro food processor. Like many other small electrical appliance manufacturers, Vorwerk enjoyed rapid demand during the pandemic. Between 2019 and 2021, Thermomix’s turnover increased by a third. Since then, development has stagnated and the number of units has recently decreased. Cloth flour speaks of satiety.
Vorwerk registered more than one million kitchen appliances sold worldwide in 2023 and achieved a record turnover of more than 1.7 billion euros. However, the small increase of 0.8 percent compared to the previous year is mainly due to the fact that the price for the Thermomix has been increased twice since mid-2022.
Declining profits expected
For the current year, Stoffmehl expects that profits will “probably decline significantly.” This is justified, among other things, by planned investments in the three-digit million range. There will be no new Thermomix this year. “We have no pressure,” Stoffmehl said. He wants to expand his own community. He proudly points to the 5.1 million subscribers to the Cookidoo recipe platform; in 2019 that number was still under a million.
At least as important as the customers for the largest European direct sales company, founded in 1883, are the independent consultants who demonstrate the products at events and so-called Thermomix parties. At the end of the year, Vorwerk said it employed more than 100,000 people worldwide. According to Stoffmehl, the fact that the number has halved compared to the previous year is due to the sale of the Jafra cosmetics division.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
