The ready-made food is like a star against a background of a comparatively moderate growth of packaged food* in Bulgaria
The segment of ready-made food is the fastest growing in the Bulgarian packaged food market, which develops at a comparatively moderate pace, according to the most recent report of Euromonitor International.
Ready-made food in Bulgaria is expected to record the market’s highest growth in sales by over 10 pct year-on-year through 2007. The segment ranks first also in terms of volume – 13 pct. A key reason for the success of ready-made food is its convenience - it is quick and easy to prepare. Some of the most successful companies in the sector are Miss Caprice and Nikas, which sell primarily pizzas, and Kenar. The market development is expected to bolster the supply of chilled or frozen ready-made food products, too.
Compared to the segment of ready-made food, which is performing well, the market growth of the rest of the packaged food products covered in the report is modest. The sales of soups, spaghetti and pasta have surged by about 5.0 pct. The growth of the sales of frozen, chilled and canned food is only 1.0 pct or 2.0 pct. The packaged food sector has seen a stronger growth in the past few years. However, in 2007 it slackened its pace both in terms of volume and current value sales as it reached a level of maturity.
The major change in 2007 is that the consumers definitely started to prefer good quality products. The rise in their incomes has pushed up the consumption of goods at a medium price. The trend was maintained although the prices of most of the packaged food products were hiked over the drought this summer.
Another interesting trend is the market consolidation. A few years ago there were numerous companies with comparatively small market shares. However, in 2007 some of them suspended operations because of being unable to meet the strict requirements of the European Union (EU) related to hygiene, labour conditions and others. As a result, the large companies increased their share. Some of the most successful ones are Boni Holding, Bravo, Bella Bulgaria and Tandem, which operate in the chilled packaged food segment. Olinesa and Deroni gained a strong foothold in the segment of sauces and condiments.
Competition Continues Growing
The market growth bolsters the competition between the most successful companies. They try to woo potential consumers not only with good quality products, but also with advertising. Such companies are Bella Bulgaria and Nikas, which boosted their market share in the segments of chilled packaged food and ready-made food, respectively, by some 5.0 pct. The success is attributed mostly to their interesting and fascinating commercials.
These marketing strategies are not popular in the segments of spaghetti, pasta and dried food, but are expected to be applied more frequently in the future.
The sector growth is to slacken its pace even more. Euromonitor International expects that the growth of the segments covered by the report will slow down, especially the growth of sales. The annual growth of segments such as pasta, spaghetti, canned and dried food will hardly exceed 1.0 pct, while the sales will be slightly higher. The main driving force of the market will be the frozen food and the ready-to-eat packaged meals. They are expected to become more popular because they offer more convenient solutions to the increasingly fast-paced lives of consumers.
In the next few years the market consolidation will increase and competition will intensify. Due to the consumers’ stricter requirements to the ready-made food, the bulk of small players will be pushed out of the market. The large companies, which will occupy the vacant positions, will focus on consumer loyalty to their products. As a result, there will not only be a greater variety of packaged food products, but also new types of products such as chilled processed soups, canned or chilled spaghetti, packaged meals, etc.
*The analysis does not cover the following sectors: chocolate, milk products, baby food, sunflower oil.
Sectors covered: crisps/snacks/popcorn; dried fruit/nuts (packaged); noodles; soups (canned and dry); sauces and dressings; condiments; ready-made packaged food – canned food, ready-made food (chilled and frozen), frozen pizza; canned food; frozen food – meat (only spiced); vegetables; spiced sausages; rice; desserts; chilled food
15-21/09/07, P58
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