Salla Korpivaara and Stefan Anbro Lithuania's health food market

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

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CUSTOM RESEARCH SOLUTIONS

Euromonitor INTERNATIONAL - consulting

Forecasting

Launch, sales, demand, lifecycle

Success / failure probabilities

Determine risk exposure

Consumer analytics

Customer profiling

Income distribution models

Purchasing behaviour

Visualisation

Discovery, sharing, communication

Market attractiveness planners

Performance monitoring

Marketing analytics

Marketing effectiveness

Substitutes and complements

Price and channel strategy

Scenario analysis

Market simulations

Portfolio analysis

Test business cases

Category evaluation

Sizes, shares, growth

Segmentation

Market entry strategy

Innovation

NPD business case

Consumer insights

Product claims

Route to market

Production, imports, exports

Supply and value chain

B2B and B2C channels

Competitive intelligence

Profiling

Benchmarking

Partner evaluation

Macro

Opportunity frameworks

PEST

Quarterly tracking




HEALTH FOOD TRENDS

RETAIL CHANNELS

OPPORTUNITIES

CONCLUSIONS


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



Strong macroenocomic indicators


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



Increasingly wealthy


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



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



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





HEALTH FOOD TRENDS

RETAIL CHANNELS

OPPORTUNITIES

CONCLUSIONS


WHAT IS HEALTHY

HEALTH FOOD TRENDS



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



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



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

...




HEALTH FOOD TRENDS

RETAIL CHANNELS

OPPORTUNITIES

CONCLUSIONS


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 €



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



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




HEALTH FOOD TRENDS

DISTRIBUTION

OPPORTUNITIES

CONCLUSIONS


• 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



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



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




HEALTH FOOD TRENDS

DISTRIBUTION

OPPORTUNITIES

CONCLUSIONS


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


Salla Korpivaara and Stefan Anbro Lithuania's health food market

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