Flavia Group in Croatia: “You can’t do it alone “

‘If you dive without an air tank, you need to know what you’re doing. You take a deep breath, you descend, the pressure increases, your lungs shrink. And if you stay down too long, you can black out and drown. So the most important thing is: never dive alone.’

With this personal metaphor, drawn from his passion for freediving, Duje Dipalo, CEO and co-owner of the Flavia Group, describes what it feels like to do business in the Croatian building materials market. ‘You can’t do it alone. You need a buddy. That’s exactly why we started Flavia.’

Until a few years ago, the Croatian building materials sector was highly fragmented. Dozens of independent, often family-run companies operated across the country. Each had a strong regional base and loyal customer base, but lacked collective purchasing power.

‘The market was changing rapidly. Major international players such as Bauhaus, Baumax and Obi entered Croatia and started supplying directly to end users. We saw our margins shrinking and our negotiating position weakening. We had two options: merge into one large company or work together. We chose the latter – out of sheer necessity.’

This led to the creation of the Flavia Group in 2005, a cooperative of independent building materials traders. The group now has 31 members with more than 45 sales outlets, which together have approximately 1,500 employees and a combined turnover of around 400 million euros. The model is based on voluntary cooperation without loss of autonomy. “We are not a franchise. Each company continues to operate independently, but together we form a single strong negotiating partner.”

The cooperative started by setting up a joint purchasing organisation to secure better terms from suppliers. This required a lot of persuasion in the beginning. “Some members were afraid of losing control. Others did not see the added value. There was a lot of internal discussion,‘ says Dipalo. ’But once we closed the first joint deals, they saw the effect. Today, we are stronger than ever.”

Initially, the focus was mainly on fending off competition. ‘We were in defence mode,’ says Dipalo. ‘We had to survive.’ That phase is now over, and Flavia is increasingly focusing on structural growth. ‘We want to move to a proactive strategy. That means investing in brand, retail, marketing and innovation.’

A key priority is expansion into retail. Until now, most members have focused purely on B2B sales. But Dipalo sees opportunities in the consumer market. ‘Retail provides stability. If things aren’t going so well in construction, you have a second source of income. Moreover, the market is becoming increasingly hybrid – professional customers also want to be able to pick something up on Saturdays.”

More and more Flavia shareholders are therefore investing in their own shops or showrooms. The group is investigating whether this development can take shape collectively. Think of shared shop concepts, central investments or joint branding.

Until now, Flavia has mainly been an internal brand – known to members and suppliers, but not to the general public. That needs to change. ‘We want people to recognise Flavia,’ says Dipalo. ‘When you see the logo, you should know: here you get quality materials and excellent service, especially for professionals.’

The cooperative is working on private labels, recognisable corporate identities and a central marketing strategy. Flavia is drawing inspiration from other Euro-Mat members. ‘We have already gained many ideas that we can now apply in Croatia – in the areas of shop design, product presentation and customer focus.’

In addition to retail, the group is also looking at digitisation, logistical cooperation and staff training. ‘We want to improve, evolve. Not stand still, but continue to develop. We don’t have to invent everything ourselves. By learning from others, we can grow much faster. Having a buddy, just like in diving, improves your chances of survival. And we believe in what we do: building something that is stronger than us alone.’