Organic Beverages in Hungary

PROSPECTS

Awareness is rising; however the high price points of organic beverages continued to make consumers wary

Despite awareness, distribution and the reach of organic foods and beverages expanding in Hungary, in 2019, it remained a niche area with low volume and value sales, partly due to the high price points limiting sales to higher-income consumers. However, as disposable income levels continued to increase, this generated greater demand for premium goods, also in food and drinks.

The growth of internet retailing allows consumers to purchase organic goods at lower prices

Growing interest of online shopping supported the expansion of internet retailers in 2019, and most health food stores have an online store that widens offerings, available at reduce average unit prices, making organic beverages more affordable. Growing quickly, online health food retailers are most active in importing and offering organic coffee and tea products, creating growing competition and a decline in average unit prices of organic beverages.

Organic hot drinks has the most growth, boosted by the affordable price points of instant organic coffee

The fastest growth for organic beverages in 2019 was in coffee, thanks to the widening range of offerings and improving availability through online health food shops. The best performers were organic instant coffee and organic coffee, which also became less expensive due to growing competition among internet retailers.

COMPETITIVE LANDSCAPE

Discounters bring down the average unit price, making organic beverages more appealing to consumers

Expansion of the discounter channel, especially the largest discounter chains Lidl and Aldi, helped to make health and wellness offerings more affordable for consumers in 2019 - including organic products. These discounters reduced the average unit prices, making HW packaged food and beverages more appealing, and more affordable.

Dedicated displays for organic products in supermarkets and hypermarkets, boost awareness and value sales

The range of organic juices expanded in 2019, and average unit prices fell thanks to the activities of private label operators. Dedicated displays at hypermarkets, supermarkets and discounters for organic products is becoming common in Hungary, with many of these featuring organic juices, concentrates, coffee and tea.

Private label offerings continue to expand, boosting growth for organic beverages

Many consumers expressed interest in organic products, but price remained the primary barrier to consumption. Hypermarket and supermarket chains (Spar, Interspar, Auchan, Tesco), drugstore chains (dm-Drogerie Markt and Rossmann) and discounters (Aldi and Lidl) have responded by expanding their own ranges of organic products.

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