Food and Beverage Imports: Ukraine update 1
Monday, November 24th, 2008Shopping in Ukraine over the last few years has been a delight. Every day was a revelation, as new varieties of products and brands filled the shelves with the promise of more to come. That has all changed recently. While the array of products-especially food and beverage products-continue to arrive in stores, particularly specialty outlets, the pace has slowed considerably.
The recent downturn in the Ukrainian economy and the sinking currency has no doubt, had a huge effect. In the food and beverage industry, importers are also struggling from stronger customs enforcement, an increased preference of retailers for buying from local distributors, and a market becoming increasingly price sensitive. There is also an inclination on the part of retailers towards the sale of domestic products.
Some retailers have drastically cut back on the variety of imports sold. Over the past nine months, supermarkets such as Tavier B and Furshet for example, have replaced several well known European brands of confectionery products, with Ukrainian and Russian brands. This now applies to other categories of food and beverage items. Coca-cola is still there, but more and more shelves are lined with cheaper “local” products.
What does this mean for companies that want to sell into this market? Companies already in this marketplace, will have to adapt or lose market share. Some could be forced out of the market entirely.
For those companies that have not ventured into this market…and the opportunities are certainly here over the long term…aggressive strategies will need to be employed. In fact, now is an excellent time to establish a brand as people re-evaluate what they buy.
Companies entering emerging markets- especially during these difficult times-need to invest more in marketing and advertising. This sounds like anathema to companies trying to save money in a recessionary market, but it is precisely this contrarian sounding strategy that increases the odds of success. Of course, the marketing needs to be more efficient and targeted, with a longer duration factored for return on investment.
Anton Olff
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