Demand for rice and pasta products is gradually decreasing in the Ukrainian market. At the same time, the volume of their production is increasing. Enterprises are upgrading equipment and expanding industrial space. This is due to the growth of exports to EU countries.
Nevertheless, rice groats and pasta products continue to be included in the food basket of Ukrainian consumers. The market remains still full of supply and tends to expand.
General situation on the rice and pasta market
Domestic producers account for 80% of the market. Rice is among the three most popular cereals in Ukrainian production (buckwheat and corn groats occupy the first and second places respectively) – last year the volume of rice groats production amounted to 17.94 thousand tons. Before 2014, when the annexation of Crimea took place, the volume of cultivation of the crop was twice as large – the main cultivated areas were located here.
Below is the research data provided by Euromonitor agency, the monetary volume of rice production is steadily increasing.
Monetary Market Volume (UAH), 2003-2022
Rice, pasta and noodles in 2018 showed 5% volume growth in money to 6.464 billion. UAH. and a 2 percent decline in retail sales volume to 138,000 tons in 2018. Experts predict further niche growth based on trend data from previous years.
The average price of rice groats, pasta and noodles is increasing by 7% annually. In 2018, the compound annual average growth rate for rice, pasta and noodles increased by 3% in price and 4% in sales volume.
Rice and pasta are still included in the food basket of consumers due to their low cost
Domestic brands of rice, pasta and noodles have a strong position in the market due to acceptable price and high quality products. In their assortment appear unusual for the Ukrainian market products – special rice for sushi, rice and other types of noodles, which are used in Asian cuisine.
In the sushi sector, this is an opportunity for them to take the market away from imported products, which are comparatively priced higher. For consumers, there is no discernible difference in quality between domestic and imported products.
Offer in the segment
Share of producers in the market of rice, pasta and noodles in Ukraine
The leader in the rice, pasta and pasta sector 20.7% is Technocom LLC, known for the production of instant noodles TM “Miwina”. The share of 10.5% is accounted for by Fabrika Bakaleynykh Produktov, which produces TM Zhmenka products. With a small gap from its predecessor, with a share of 10.1% goes “Native Product”, known by TM “Khutorok”. The first two participants of the rating slightly lost ground compared to last year, while the third one increased its position.
The share of the leaders will probably decrease in the future, as there is a trend towards the appearance of STM from grocery chains (Auchan, ATB, Fozzy Group).
Share of brands in the rice, pasta and noodles market in Ukraine
The situation by brands does not differ much from the balance of power in the list of manufacturers. Accordingly, Mivina holds a share of 20.7%, Zhmenka – 10.5%, Khutorok – 10%.
Along with the development of economy-class and proprietary brands, the main competitor to rice, pasta and noodles in the grocery market is potatoes and their high yield, which indirectly influences the reduction of sales in the segment.
Imported types of pasta have appeared on store shelves, and consumers are willing to pay more for them if they know the product is of high quality
Examples of unique noodle suggestions
Most brands entice customers with discounts and official distributor efforts. But some are getting creative with the task of increasing loyalty to their products.
Nestle Ukraine Ltd. presented the addition of instant noodles of duck and shrimp flavors to its assortment. They were launched at the same time as an advertising campaign offering a game of Ducks vs. Shrimp with prizes for the winners. Another move from Nestle Ukraine is the redesign of the packaging to make it look modern, informative and bright.
“Mareven Food Central are promoting Rollton TM instant noodles using, among other things, social media advertising.
The main competition for customers is between imported and domestic brands: the former take the packaging and additional bonuses, the latter – the price. In addition there is a growing STM sector that is gradually being incorporated into the confrontation.
Target audience
Among cereals, rice ranks first in popularity among Ukrainian consumers – the average Ukrainian consumes 2.5 kg of rice annually. Half of this volume goes for side dishes.
Wholesale prices for groats are lower than retail prices, and they keep for a long time. Because of this, consumers are curious about the possibility of making bargain purchases on the go. Especially this type of sales is popular in rural areas – this is due to the lack of stores and markets within walking distance.
An additional argument is that the quality of wholesale products is higher than cereals and pasta in packs. Packaged groceries are purchased in stores, supermarkets and markets close to home, mainly by people with lower-middle income who do not have the opportunity to make one-off purchases for a long period of time.
Asian cuisine is considered high-end and healthy, and many consumers are eager to purchase items on the respective shelves
Rice and noodles for Asian cuisine are a special attraction. Since such dishes are considered high-end and healthy, many consumers are eager to buy items from the respective shelves.
Sushi rice, rice noodles, ramen (wheat noodles), buckwheat noodles – these types are relatively new for Ukrainian consumers. The motivation to buy them is the appropriate consumption situation: a party, a sushi party, a family night where one gathers with family and friends and cooks Japanese rolls and other Japanese dishes.
The predominant part of the audience of such goods is middle-income, age – 20-30 years old. Many people are willing to pay more if they know for sure that the right type of grits or noodles will suit the occasion.
The fashion for Asian cuisine has led to an increase in demand for specialty rice for sushi and noodles for Chinese and Japanese dishes
Trends and prospects for development
- Euromonitor experts assume that in 2022 the sales volume in the niche of rice, pasta and noodles will amount to UAH 7.5 billion or 172 thousand tons;
- Rice grits are projected to grow steadily at a 7 percent compound annual growth rate in volumes. This will account for the increasing popularity of rare crop species (brown, brown, wild, and mixtures thereof);
- The latter will fill the premium sector of products aimed at middle- and high-income customers interested in the topic of proper nutrition and healthy lifestyle. Traditional white rice will retain its position. In addition, STM of retail chains will be developed, which will bring down the price of packaged products;
- with the increase in cities and the percentage of urban population, and the increase in education levels, it is predicted that people will start to become more interested in healthy foods that are rich in fiber and gluten-free. Therefore, market leaders are expected to pick up the trend and expand their product range to cover this need of the population;
- for sales in rural areas also has its own forecast. Retailers will make 2% profit annually by supplying rice, pasta and noodles on produce deliveries as, it will still be as unprofitable to open large stores here.
- the growing popularity of Asian cuisine will stimulate domestic producers to launch lines for the production of new types of noodles for the Ukrainian market;
- domestic producers will strengthen investments and marketing and work on expanding dealer networks to reduce the cost of their products;
- The political situation since 2014 has had a negative impact on the development of the rice and pasta market, imposing restrictions on it. The situation will show a better picture in the coming years.
Market research from KOLORO.UA agency
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