Food and Drink Internet Retailing in Finland

PROSPECTS

Maintaining the cold chain remains a key issue

Despite recent high growth rates, food and drink internet retailing enjoys just a low single-digit value share within overall internet retailing in Finland. Even though growth is expected, the proportion of food and drink within overall online sales will remain low.

Demographics offer promise

Amongst the current and future demographic challenges in Finland are the lowest birth rates since the 1860s and the ageing population. Families with children form the majority of online food and drink customers, whilst the young urban single and DINK (double income, no kids) populations offer less promise.

The future of online sales of alcohol is debated

Currently, mainstream grocery retailers sell no alcohol online in Finland. The state-owned Alko chain does sell online, but all alcohol needs to be picked up from Alko stores or other designated pick-up points.

COMPETITIVE LANDSCAPE

Major grocery retailers thrive with their omnichannel models

Benefiting from their sheer size and unparalleled knowledge of what Finnish consumers buy, Finland’s two biggest grocery retailers, S Group and Kesko, are also the biggest food and drink online retailers. Both giants are increasing the number of stores which deliver food or act as pick-up locations.

Modern grocery retailers face competition from other store-based concepts

Amongst traditional grocery retailers, for the Ruohonjuuri concept, which focuses on ethical food, a tenth of its turnover already comes from online sales. The state-owned drinks specialist Alko opened its B2B online sales in late 2016, and sales for private customers a year later.

Generalists and niche concepts are amongst online specialists

Online food and drink specialists as such are not a new phenomenon in Finland; the first one, Ruoka.net, was present as early as 1998.

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