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
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Success / failure probabilities
Determine risk exposure
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Performance monitoring
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Substitutes and complements
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Scenario analysis
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Test business cases
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Sizes, shares, growth
Segmentation
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Supply and value chain
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Competitive intelligence
Profiling
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Opportunity frameworks
PEST
Quarterly tracking

Increasing value despite emigration
PACKAGED FOOD – AN OVERVIEWGrowth(%)
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
Thousandpeople
Packaged food sales in Lithuania
Current retail
value growth
Retail volume
growth
Total
population

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
MillionEuro
Growth(%)
Real GDP growth
Annual disposable
income

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
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
Growth(%)
Million€
Retail value 2015 Total retail value growth 2015-2020, constant
Top 10 fastest growing product categories in packaged food in Lithuania

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 PROTEINUNSATURATED 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
...

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
Valuesalesin€

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
Million€
Retail value sales

EUROMONITOR INTERNATIONAL
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

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 accessUtilisation
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 in
Lithuania
Billion€
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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