LITHUANIA’S HEALTH FOOD MARKET
- A GROWING NICHE
STEFAN ANBRO, SENIOR RESEARCH ANALYST
SALLA KORPIVAARA, RESEARCH ANALYST
2015-10-29
EUROMONITOR INTERNATIONAL
PACKAGED FOOD – AN OVERVIEW
HEALTH FOOD TRENDS
RETAIL CHANNELS
OPPORTUNITIES
CONCLUSIONS
EUROMONITOR INTERNATIONAL
PACKAGED FOOD – AN OVERVIEW
HEALTH FOOD TRENDS
RETAIL CHANNELS
OPPORTUNITIES
CONCLUSIONS
© Euromonitor International 4
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EUROMONITOR INTERNATIONAL
PACKAGED FOOD – AN OVERVIEW
HEALTH FOOD TRENDS
RETAIL CHANNELS
OPPORTUNITIES
CONCLUSIONS
© Euromonitor International 7
Increasing value despite emigration PACKAGED FOOD – AN OVERVIEW
Gro
wth
(%
)
2,800
2,850
2,900
2,950
3,000
3,050
3,100
3,150
3,200
-8
-6
-4
-2
0
2
4
6
8
10
2010 2011 2012 2013 2014 2015
Th
ou
sa
nd
pe
op
le
Packaged food sales in Lithuania
Current retailvalue growth
Retail volumegrowth
Totalpopulation
© Euromonitor International 8
Strong macroenocomic indicators
PACKAGED FOOD – AN OVERVIEW
10,000
12,000
14,000
16,000
18,000
20,000
22,000
24,000
26,000
0
1
2
3
4
5
6
7
2010 2011 2012 2013 2014 2015
Mill
ion
Eu
ro
Gro
wth
(%
) Real GDP growth
Annual disposableincome
© Euromonitor International 9
Increasingly wealthy
PACKAGED FOOD – AN OVERVIEW
0
50
100
150
200
250
300
350
400
450
Big cities Other cities/towns Rural areas
€
Average monthly disposable income per household member
2010
2014
© Euromonitor International 10
Consumer profile to target for health and wellness manufacturers PACKAGED FOOD – AN OVERVIEW
City dweller
Higher income
Westernised Aged 25-
45
INCREASED POTENTIAL FOR SELLING
MORE EXPENSIVE PRODUCTS
© Euromonitor International 11
0
1
2
3
4
5
6
7
0
50
100
150
200
250
300
350
Gro
wth
(%
)
Mill
ion
€
Retail value 2015 Total retail value growth 2015-2020, constant
Top 10 fastest growing product categories in packaged food in Lithuania
PACKAGED FOOD – AN OVERVIEW
EUROMONITOR INTERNATIONAL
PACKAGED FOOD – AN OVERVIEW
HEALTH FOOD TRENDS
RETAIL CHANNELS
OPPORTUNITIES
CONCLUSIONS
© Euromonitor International 14
FORTIFIED AND FUNCTIONAL VEGETARIAN LOW- CARB ´ GLUTEN FREE FENNO-VEGAN PROBIOTICS GMO-FREE
SUPER FOOD ORGANIC 5:2 LACTOSE-FREE ATKINS HIGH PROTEIN UNSATURATED FATS WEIGHT WATCHERS LACTO-OVO VEGETARIANISM
MEDITERRANEAN DIET REDUCED SUGAR LOWERING CHOLESTEROL
FULL-GRAIN FLEXITARIAN DIET PESCETARIAN HUNTER-GATHERER DIET BEER FASTING DETOX CABBAGE SOUP PALEO DIET REDUCED FAT A HANDFUL OF NUTS PER DAY DETOX NO RED MEAT KEYHOLE LOW-FAT HIGH FAT
NORDIC NUTRITION RECOMMENDATIONS JUICE DIET RAW FOOD THE ZONE DIET
The fragmented domain of diets HEALTH FOOD TRENDS
© Euromonitor International 15
Even if health is niche, Lithuanians find what they are looking for HEALTH FOOD TRENDS
Organic Fortified/Functional Food Intolerance
Better for You (’Light’ versions) Superfoods Gluten-Free
© Euromonitor International 16
International brands dominate small market HEALTH FOOD TRENDS
International Local Private label (RIMI)
Gardesis (Fazer)
Dobilas
Arimex
Sojalite
...
I love Eco
Rimi
Dr. Schär
Gullón
Valio
Arla
Nestlé
Ogran
Alpro
Joya
Schneekoppe
Oatly
Little Miracles
...
EUROMONITOR INTERNATIONAL
PACKAGED FOOD – AN OVERVIEW
HEALTH FOOD TRENDS
RETAIL CHANNELS
OPPORTUNITIES
CONCLUSIONS
© Euromonitor International 18
Retailing performance in Lithuania
RETAIL CHANNELS
Supermarkets
Traditional Grocery Retailers
Health Food Shops
Internet Retailing
-20
-10
10
20
30
40
50
60
70
-5 5 10 15 20 25 30
CAGR 2010-2015 (%)
CAGR 2015-2020 (%)
*The size of the bubble represents the total value sales forecasted to be generated during 2015
Hypermarkets
Va
lue
sa
les in €
© Euromonitor International 19
Maxima LT UAB - 243 outlets
- Part of the largest Lithuanian retail company Maxima Grupe UAB.
- Oldest and biggest of Lithuanian retailers
Three retailing giants dominate the grocery sales RETAIL CHANNELS
RIMI Lietuva UAB
- 51 outlets
- Owned by Swedish corporation – ICA Gruppen AB
- Innovator: special focus on premium & health products
Palink UAB (IKI) - 246 outlets
- In Belgium ownership, operates within retailing under the IKI brand name
Example of a
separate
section of
health
products in
RIMI
hypermarket
© Euromonitor International 20
0
0.5
1
1.5
2
2.5
3
2012 2013 2014 2015
Bio Sala UAB *
Livinn **
Health Food Specialist Shops growing RETAIL CHANNELS
Vilnius
Klaipeda
Kaunas
Panevezys
Siauliai
* BIO Sala, 3 outlets in Vilnius, 1 in Kaunas
** Livinn, 13 outlets in Vilnius, Kaunas, Klaipeda, Panevezys & Siauliai
Mill
ion
€
Retail value sales
EUROMONITOR INTERNATIONAL
PACKAGED FOOD – AN OVERVIEW
HEALTH FOOD TRENDS
DISTRIBUTION
OPPORTUNITIES
CONCLUSIONS
© Euromonitor International 22
• Lithuanian consumer of health products likely to be of higher income, urban and educated young adult
• Unawareness of products/ingredients regarded harmful
• Limited distribution: products available mostly in the biggest hypermarkets and speciality shops
• Does product offering reach demand in the future?
Differences between the two markets OPPORTUNITIES
• While in Finland, health trends and functional products widely spread/mainstream
• In Finland real fragmentation of diets: from ’light’ products to protein boom and gluten-free trend
• Even the smallest grocery shops offer health products in Finland
• Frequent innovations & new products on health food market
© Euromonitor International 23
Market opportunities
OPPORTUNITIES
• Shakes
• Bars
• Dairy
Growing interest due to sports & fitness trends
30% of Lithuanians lactose intorelant
• Bars
• On-the-go salads, single portion dairy
• Ready smoothies
Simple solutions provide added value to busy consumers
• Growing number of vegetarian restaurants
• Nutrition-rich cereals
• Meat substitutes
‘Vegetarian products’ in retail, international food trends in foodservice
• Premiumisati-on visible in several categories
• Added value aspect
• Importance of packaging
Natural & healthy appeal
Protein Lactose-free Convenience Vegetarian Premiumisation
dairy /on-the-go /vegan
• Milk
• Yogurt
• Creams
© Euromonitor International 24
How to appeal to consumers who appreciate local brands? OPPORTUNITIES
Source, Vaasan Oy
Source, Karl Fazer Oy Ab
“Consumers in the Baltic market love
locally produced dairy products. They value
good taste, freshness, high quality and a
good price. - Krista Kalbin, Marketing and
Product Development Director at Valio
Baltic.
Glocal
Baltic consumers favour local
products
Multinationals hide behind
local companies
Global meets Local
Glocal companies -
synergy
EUROMONITOR INTERNATIONAL
PACKAGED FOOD – AN OVERVIEW
HEALTH FOOD TRENDS
DISTRIBUTION
OPPORTUNITIES
CONCLUSIONS
© Euromonitor International 26
Polls show increasing interest
Sports & fitness boom boost up sales
Media attention
Opportunities in the Lithuanian health food market
CONCLUSIONS
Competition still
rather small
→ fairly easy access Utilisation
of glocal
concept
New product
innovations
1.5
1.6
1.7
1.8
1.9
2
2015 2016 2017 2018 2019 2020
Packaged food inLithuania
Bill
ion
€
Actual retail value sales of packaged food in Lithuania, constant terms