Organic packaged food experienced a marked slowdown in total volume sales growth in 2020, as comparatively high prices meant such products were disproportionately affected as consumers tightened spending in response to the economic shock of COVID-19. Nonetheless, companies continued to introduce new organic products during the year despite the challenging trading environment.
Despite the difficult trading conditions created by the COVID-19 pandemic, organic packaged food products became more widely available in Ukraine in 2020, and benefited from increased visibility on the shelves of major modern grocery retailers chains like Silpo, Billa, Metro and Velyka Kyshenya. Overall distribution was further strengthened by growth in the number of specialist e-commerce operators offering organic goods.
While organic chocolate confectionery remains a negligible category in Ukraine, in line with the wider trend towards rising health awareness it has attracted greater attention from consumers in recent years. During the latter part of the review period, consumer interest was also strengthened by the entry of a number of international brands, including Cachet, Belgian and Kaoka.
While the outlook for organic packaged food as a whole over the forecast period is broadly favourable, higher unit prices will continue to restrict the appeal of such products, particularly now that Ukrainians have become more budget-conscious in the wake of COVID-19. Limited distribution and relatively low awareness of the specific benefits of organic products will also constrain demand.
In most staples categories in Ukraine, demand is limited by high levels of maturity, and there is relatively little difference between brands in terms of core properties and pricing. Over the forecast period, it is expected more manufacturers in these categories will obtain organic certification for individual products or entire ranges in order to capture consumer attention, add value to their brands and clearly differentiate them from competitors.
Organic baby food has proven comparatively resilient to the economic fallout of COVID-19, as parents are typically reluctant to reduce spending on their children even when household budgets come under pressure. Together with rising awareness of the potential benefits of these products, this should ensure that it remains one of the largest organic packaged food categories in Ukraine and continues to expand at a healthy pace over the forecast period.
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This report originates from Passport, our Organic Packaged Food research and analysis database.
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