Larive Ukraine: Market Study Bakery Sector
On behalf of the Dutch embassy in Kiev and the Dutch Ministry of Economic Affairs, Agriculture and Innovation, Larive Ukraine performed a market study about the opportunities in the Ukrainian bakery sector for Dutch companies.
The market study contains the following items:
- Market indicators and -trends;
- Market potential;
- Market entry;
- Import regulations.
If you would like to receive the report or like to know more about the opportunities in Ukraine? Please contact Larive International, phone +31 30 693 33 221 or send an email to firstname.lastname@example.org
Summary opportunities for the Dutch companies
The Ukrainian bakery sector may represent several opportunities which could be grouped into:
- Trade opportunities;
- M&A opportunities.
While the opportunities in M&A are most likely do not have the immediate character, the increase of the global food demand combined with the rich raw material base and qualified but low-costs labor makes Ukrainian bakery sector an interesting one to enter, especially in sub-sectors of flour confectionery products and frozen bakery. The most critical issue is governmental regulations of the bread prices which most likely will be cancelled by the end of 2012.This should have a positive effect on the market environment and bakery sector development.
1. Raw materials import
Ukraine has a rich domestic base for the main ingredients used in the bakery. The needs for the flour, fat (margarine) and yeast are fully covered by the domestic production. Production of sugar grows in Ukraine and it’s expected that in the coming 2 years the needs for the sugar will be fully met by the local production. The opportunities exist in the segment of food ingredients such as additives, baking mixes and high added value functional ingredients for specific kinds of healthy bread etc. However, this opportunity has a niche character.
2. Baking equipment import
The opportunity exists in the area of the baked equipment and technology export, where a number of European producers are already active. Among those: GOSTOL (Slovenia), FRITSCH (Germany), DIOSNA (Germany), GLIMEK (Sweden), PAVAILLER (France), HARTMANN (Germany), KONIG (Austria) and TROMP (Netherlands). The overall volume of the exported equipment for the bakery sector was in 2010 Euro 15,7 million, recording the growth of 32% comparing to 2009. Ukrainian bakers prefer to buy equipment of the European origin as it is perceived a reliable and high-efficient one. The developing segment of bakeries in the supermarkets represents a promising market for both bakery consulting services and equipment supply.
3. Packaging materials import
The main kind of packaging which is used in Ukraine is plastic packaging which holds a share of 85 – 90% from the total volume. Remaining share is split into the paper packaging and combined packaging. The applied plastic packaging technologies are: flow-packs with clips, cast-films, stretch-films, heat-shrinkable films etc. The relatively low share of the packed bakery products and wide availability of locally produced packaged materials such as plastic, paper and combined packaging makes the market entry for the foreign suppliers not attractive. The opportunity exists in the segment of innovative packaging for confectionery products, targeted to the large confectioneries.
4. Ready products export
Ukrainian confectionery products has ‘tasty’ image in CIS countries, there is a demand for these products, and there is opportunity to increase export to new markets.