Retail Tissue in Serbia

2021 DEVELOPMENTS

Demand for retail tissue closer to pre-pandemic levels following the stockpiling of 2020

Demand for retail tissue, driven by paper towels and toilet paper, notably rose in 2020 as a result of the pandemic, as local consumers stockpiled essential products ahead of home seclusion during lockdown. Napkins, due to a switch to home-prepared meals with foodservice impacted by restrictions, and boxed facial tissues due to entire families spending prolonged time at home performed well, with the importance of personal hygiene at the forefront of consumers’ minds due to various media reports during the pandemic.

Facial tissues remains a positive performer due to heightened personal hygiene

While demand for retail tissue mainly returned to pre-pandemic levels in 2021 as part of a cooling-off effect after the stockpiling tendencies of local consumers the previous year, facial tissues remained a positive performer, as consumers remained cautious of following stringent personal hygiene routines, ensuring that they had tissues to hand when needed, as they could be hygienically disposed of after use. Another negative factor for retail tissue is the relaxing of restrictions and mobility outside of the home, including the return to foodservice and the office, driving up demand for away-from-home tissue products.

Limited share difference between leading players, with Zewa continuing to follow discounting strategy to attract consumers

Intense competition between the three leading players, DrenikND doo (Perfex), Paloma dd, and Essity (Zewa) continued in 2021, with low share differences between them. Although Zewa has a fairly high unit price compared to most other retail tissue brands available in Serbia, it gained value share during the pandemic, and despite a marginal decline in 2021, value sales remained higher than pre-pandemic levels.

PROSPECTS AND OPPORTUNITIES

Stable demand for retail tissue over the forecast period, while e-commerce likely to gain further penetration as consumers appreciate convenience of home delivery

Retail tissue is predicted to return to low stable volume growth rates witnessed pre-pandemic moving forward. Larger volume categories such as toilet paper, paper towels and facial tissues are mature and are therefore likely to record slower growth compared to the review period, and other types of retail tissue.

Private label offers potential for further expansion

Private label continued to gain value share within retail tissue in 2021, offered by Delhaize with 365, in addition to the likes of Univerexport doo (Baš Baš). This share is expected to increase during the forecast period, primarily because of lingering price sensitivity, predictions for the continued expansion of large retailing chains, and the greater trust in the quality offered by private label among a growing number of local consumers.

Sustainability issues unlikely to be at forefront of product development but will offer a point of differentiation

Sustainability and environmental issues in general are not expected to be the major focus of retail tissue producers over the forecast period, but they will certainly be among one of the most important trends that will be followed by at least the largest players. Hence, new launches are likely to be in accordance with these trends, and therefore smaller brands may also be quick to follow over the forecast period to keep abreast of the competition.