UKRAINIAN SAUCE MARKET

Different types of sauces are present on the table of almost every resident of Ukraine. Most often they are used as a seasoning to the main dish or side dish. They are able to change the flavor of any dish. In Ukraine, the most popular types of sauces are:

• mayonnaise;
• ketchup;
• mayonnaise-based sauces;
• tomato-based sauces;
• mustard.

Sauce market: production

The Ukrainian market of sauces was actively developing until 2011. Starting from 2012, the market volume and sauce production in Ukraine has been declining. A new stage of production decline started in 2013 and continues until now.

Sauces can be conditionally divided into 3 price segments:

• economy;
• Middle;
• premium.

More than 90% of the Ukrainian market of sauces is occupied by domestic producers. Most often, Ukrainian producers produce sauces of economy and medium price category. To increase sales, companies try to expand their assortment.

The cost of sauces is strongly influenced by raw material prices. For ketchups and tomato sauces, these are the prices of tomatoes. For mayonnaise and mayonnaise-based sauces, it is the price of sunflower oil and eggs. Increasing the cost of ingredients for sauces increases the cost of its production. As a consequence, the price for consumers rises and consumption levels decrease. As a result, companies slow down the pace of production. For example, Unilever Ukraine in 2015 planned to produce mayonnaise and ketchup under Calve TM (at the facilities of Chumak company), but in 2016 changed its decision. The company decided that at the moment the production of sauces is not profitable enough.

The drop in production can be traced by the example of mayonnaise. During the 2014/2015 season, Ukraine produced 136 thousand tons of mayonnaise. Analysts predict that during the 2015/2016 season 120 thousand tons of mayonnaise will be produced. This will mean a drop in production to the level of the 2003/2004 season. However, in August 2016, 10.1 thousand tons of mayonnaise were produced. This is 5.2% more than in the same period of 2015 (then produced 9.6 thousand tons of mayonnaise). This may well mean the beginning of stabilization of the sauces market.

In 2016, it has become popular for private or home-based businesses to make sauces. They produce kraft sauce in small batches. Their price is several times higher than that of large enterprises. However, they are popular due to their unusual flavors. Of course, they can not compete with the giants of the industry. But their presence is a positive signal for the market.

Sauce market research: exports and imports

After an upswing in the 2010s, exports of sauces have been steadily declining. Between 2013 and 2016, mayonnaise exports alone fell by 15%. In 2013, the largest supplies of sauces were to Russia. After the imposition of sanctions, their volume has been steadily decreasing. Now Ukrainian sauces are exported to other regions. These are mainly CIS countries. For the period January-October 2016, the most sauces and additives were exported to Moldova and Belarus.

For the period January-October 2016, Ukrainian sauce was exported to:

• Moldova – 19.71%;
• Belarus – 19.70%;
• Russia – 14.39%;

The share of other countries is 46.19%.

The sauces market is characterized by a rapid decline in imports. For example, in 3 years the volume of mayonnaise imports fell by 30%. Most of the imports fall on premium segment sauces.

For January-October 2016, the largest importers were:

• Germany – 25.56%;
• Poland – 19.18%;
• Austria – 16.81%.

The share of other countries is 38.45%.

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Analysis of the sauces market: consumer portrait

Various sauces are consumed by over 95% of the adult population of Ukraine. On average, Ukrainians consume 2 kg of sauces per year. The most popular sauces among consumers are mayonnaise and ketchup.

Frequency of purchasing ketchups and other sauces:

• once a week – 21%;
• Once a month – 33%;
• 2 times a month – 31%;
• once every 3 months or less frequently – 15%.

The general public has several top reasons for buying sauces.

1. They have a low price.
2. They help make simple dishes taste better.
3. Sauces have a long shelf life.

The use of sauces has a certain seasonality. In winter, the demand for fatty mayonnaises grows, in summer – for ketchups and tomato sauces, which serve as an excellent addition to meat.

The level of sauce consumption is tied to other foods. It is not a stand-alone dish. Ketchup, mayonnaise and other sauces are bought as a condiment. Therefore, when consumption of meat, fish, pasta and other products drops, so does the consumption of sauces.

In our articles you can read a detailed analysis of the Ukrainian meat market and pasta market.

Consumer attitudes towards different types of sauces vary greatly. For example, adherents of a healthy lifestyle associate mayonnaise with unhealthy food. However, it remains an obligatory element of family meals, for people of the older generation.

Mayonnaise happens:

• high-calorie (more than 55% fat);
• medium calorie (40-50% fat);
• low-fat (less than 40% fat).

In the last 2 years, people have started to buy low-calorie mayonnaise more often. Consumers consider it healthier than high-calorie mayonnaise. Many people have started to study the label of the product before buying it. It is important for them to know that the sauce does not contain GMOs or harmful additives. More than 80% of the Ukrainian population believe that food should be healthy.

Sauces market research: popular brands

“Torchin.” Volinholding produces sauces under this trademark. The company was founded in 1994. In 2003 the company joined the Nestlé group. About 25% of mayonnaise and 70% of ketchups consumed by the population of Ukraine fall under the Torchin brand.

TM “Torchin” produces a wide variety of sauces.

1. Mayonnaise (“European”, “Domashniy”).
2. Mayonnaise sauces (“Delikatesny”, “Klasichny”).
3. Mayonnaise-based sauces (“Paprika”, “Tartar”, “Chasnikovy”, “Mushroom”).
4. Ketchups (“Torchin to shashlik”, “Lagidnyi”, “Zolotiy”, “Chili”, “Z paprika”, “Z chasnik”).
5. Tomato-based sauces (“Sacebelli”, “Mehikano”, “Chili”, “Aziatski”).
6. Marinades (“Tomati i basilik”, “With channik and herbs”, “Plum”).
7. Mustard (“Mitsna”, “Z khrinom”, “Kozatska”, “Lagidna”, “Delikatna”).

Torchin supplies its products to the USA, Israel, Bulgaria, Poland, Latvia, etc.

CJSC “Chumak“. Founded as a Ukrainian-Swedish company “South Food, Inc”. First produced ketchup for Ukrainian consumers in 1996. Since 1997, the company “Chumak” has been cooperating with McDonald’s Ukraine. Today it supplies more than 10 types of products for McDonald’s.

The company produces different types of sauces.

1. Ketchups (“Light” with stevia leaf extract, “Red hot” with hot jalapeño pepper, “From yellow Kherson tomatoes”, “Tender”, “Tender for children”, “For kebab”, “Tomato”, “Grill”, “Chili”).
2. Mayonnaise (“Real”, “Appetizing”, “Provençal”, “Real Light”, “Lenten”, “Olive”, “Creamy”, “Salad”);
3. Tomato sauces (“Kherson”, “Tomato specialty”);
4. Kukharski sauces (“Kukharski klassic “, “Kukharski with vegetables”, “Kukharski with spices”);
5. Sauces and condiments (“Basilicata”, “Cheese”, “Tartar”, “French with mustard”, “Texas BBQ”, “Carpathian with mushrooms”, “Aioli with garlic”, “Sacebeli”, “Georgian”, “Bulgarian with sweet pepper”, “Cossack with horseradish”).

In the near future, the company plans to start supplying its products to the markets of Scandinavia (Sweden, Denmark and Norway). The company supplies its products to the EU countries: Hungary, Poland, Czech Republic, etc. In the Baltics, Chumak’s ketchups are among the three leaders. Chumak also produces products for private labels of European retail chains. The company supplies ketchups and mayonnaises to the USA under Chumak TM.

«Щедро». Торговая марка «Щедро» была создана в 2005 году. Продукция производится на 3 предприятиях:

• Kharkov fat factory;
• Lviv fat factory;
• Zaporizhzhya oil and fat factory.

The company makes a variety of sauces.

1. Mayonnaise (“Homemade for Children”, “Lviv Premium”, “Provençal”, “Salad”, “Cheese”, etc.).
2. Ketchups (“Shashlychny”, “Tender”, “Cherry”, “Barbecue”, “Tomato for Children”, “Chili”).
3. Sauces (“Krasnodar”, “Kherson”, “To dumplings”, “Tabasco”, “Adzhika home”, etc.).
4. Mustard (“Dijon delicate”, “Honey”, “French”, “Spicy homemade”, “Ukrainian with horseradish”).

Products under TM “Shchedro” are exported to Hungary, Romania, Germany, Israel, Kazakhstan and Turkmenistan.

“Korolivs’kyi Smak.” In 1992, the company Victor & K was founded. TM “Korolevsky Smak” was registered in 2002. The company produces a variety of sauces.

1. Mayonnaise (“Imperial”, “Royal”, “Provençal”, “Festive”, “Wonderful”, “Spring”, “Tender”, “European on quail eggs”, etc.).
2. Ketchups (“Tomato”, “To kebab”, “Tender”, “Chili”, etc.).
3. Adzhika (“Homemade”, “Caucasian”, “Spicy”).
4. Tomato sauces (“Sacebeli”, “Shashlychny”, “Ostry”, “Ukrainian”, “Krasnodar”).
5. Mustard (“Royal”, “French”, “Spicy” with horseradish, etc.).

Analysis of the sauces market: specifics of promotion

Fighting stereotypes. In the minds of consumers mayonnaise belongs to harmful products. TM “Shchedro” decided to show the usefulness of its mayonnaise “Provençal Organic”.

First of all, the advertising campaign emphasized the naturalness of the product. Real grass was placed at mayonnaise sales outlets to symbolize the natural origin and purity of the ingredients. Eggs were placed next to the mayonnaise to emphasize that it was made from real yolks.

Active advertising was also conducted in social networks. On the company’s pages, a specially hired nutritionist talked about the benefits of organic products. They also talked about the useful ingredients in Provençal Organic. For example, green tea extract, which serves as a natural antioxidant.

The price for organic mayonnaise is higher than for plain mayonnaise. However, thanks to a properly organized advertising campaign, people began to actively buy it. Usually the share of sales of niche products is 3-5%. The share of sales of Provençal Organic among the products of TM Shchedro reached 25%.

Caring for the consumer. Mayonnaise is one of the popular products of Torchin TM. When the company’s analysts noticed a drop in consumption, an advertising campaign was developed. It was based on two principles.

1. Mayonnaise is not eaten on its own, but together with other dishes. Therefore, it is necessary to show together what it can be eaten with.
2. People like to be taken care of. You need to give them useful information.

As a result, the company started promoting its YouTube channel. Short videos showed how to prepare a particular dish using Torchin products.

 

Sauce market: the battle for consumers

Ukrainian consumers are characterized by high loyalty to selected brands. Therefore, in order to attract new customers, sauce manufacturers expand product lines and try to make them healthier.

In 2013, the company “Trade House “Shchedro” started production of Ukraine’s first organic mayonnaise “Provansal ORGANIC”. The product does not contain artificial preservatives, dyes and flavor enhancers. Organic mayonnaise was certified by Sic Global LLP (London). In 2015 TM “Shchedro” released Ukraine’s first ketchup with organic spices. And in 2016, the company “Shchedro” started producing mayonnaise for children. Domashniy mayonnaise for children is made from natural ingredients and does not contain harmful additives.

Olcom decided to produce sauces for people who follow a healthy lifestyle. Therefore, Fitness Style mayonnaise with reduced fat content was released. Analysts noticed that the niche of vegetarian products was not yet occupied. This is how Vegetarian Style, an egg-free mayonnaise, came into being.

 

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Analysis of the Ukrainian sauces market: choice of packaging

1.Glass packaging. Most consumers associate glass with premium, high quality products. Therefore, it is mainly used for luxury sauces. The undoubted advantage of glass packaging is the possibility to examine the product when buying it. The quality of ketchup and any other sauce can be determined by its color, consistency, presence or absence of impurities.

Glass is an environmentally friendly material. It can be reused or recycled. Glass is chosen by people who care about the environment.

Especially glass is often used in the packaging of ketchup and tomato sauces. In most cases, ketchup in glass containers has a long shelf life. Ketchup in glass packaging undergoes heat treatment. After sterilization, preservatives do not necessarily need to be added to the product. Unopened product in glass packaging can be stored for more than a year.

The glass packaging for sauces consists of 4 components:

• of a glass bottle;
• cap;
• labels;
• glue.

All these components affect the final price. Glass is a very fragile material, so bottles with products are broken during transportation. The high specific weight of containers increases the cost of transportation. The cost of recycling glass packaging is much higher than the cost of recycling other materials.

Due to their fragility, sauces in glass bottles are also inconvenient for everyday use. For example, it is difficult to dose the portion when pouring. Sauce in such packaging is difficult to use to the end – a certain amount of product remains in the bottle. Because of the wide neck, air gets into the open bottle and the product spoils faster.

The most popular sizes of sauces in glass packaging are 300 and 500 grams.

2. Plastic packaging. It is used for products of medium or low price segment. Among the main advantages is the low cost of the material. If the manufacturer has made the packaging transparent, when buying, you can consider the quality of the product. Such packaging is liked by many customers. For example, in the UK, 77% of consumers choose ketchup in plastic packaging. Pat packaging is easily recyclable. In 2015, Sweden recycled up to 95% of PET bottles.

Often the sauce in plastic bottles is produced in a top-down format. The product stands on the lid, while the contents of the package accumulate at the dispenser. Thanks to the special design, the sauce does not spill out arbitrarily and does not stain the lid.

Plastic ketchup packaging consists of 4 elements that affect its cost:

• pet bottles or plastic buckets;
• covers;
• labels;
• glue.

If the material turned out to be of poor quality, the taste and smell of plastic can transfer to the product. In addition, if the manufacturer has made the packaging opaque, it is impossible to assess the quality of the product. Ketchup in plastic packaging is not thermally processed. Therefore, without the use of preservatives, ketchup in plastic packaging can be stored for no more than six months.

The most popular sizes of sauce in plastic packaging are 400 and 900 grams.

3. Doi-pak. A flat plastic bag with a fold at the bottom. This type of packaging was invented by Louis Doyen in 1962. However, companies showed interest in the invention only in the 1970s. The doy-pak was offered to the Ukrainian market by the company TM “Torchin” in 1996. Now this type of packaging is used for sauces of medium price segment. In most cases, the package is made of lavsan and polyethylene.

The doy-pack has won the love of manufacturers due to its low cost. The pack consists of only 2 parts:

• package;
• cap.

The distinctive feature of the doy-pack is its compactness. When folded, it takes up little space, and with the bottom unfolded, it can easily stand on supermarket shelves. This reduces the price of transportation and storage. Unlike bottles, the flexible packaging of a doy-pak allows it to fit in almost any space. Also, doy-paks are less likely to be damaged than glass and hard plastic packaging.

The sauce can be stored in this packaging for at least 6 months. The material is impervious to sunlight, moisture and odor. After opening the doy-pak, less air gets in than in bottles. As a consequence, the product can be stored longer after opening. The doy-pack made of quality materials does not impart any tastes or odors to the product.

In addition to appearance, consumers appreciate the convenience of use. The dispenser (connector) allows you to squeeze out a strictly necessary amount of sauce.

The most common volumes of sauces in doy-packs are 240, 300 and 500 grams.

Sauce packaging design: main trends

1. Visibility. Consumers want the purchase of a product to be as easy as possible. Not everyone is ready to read the composition of the sauce and recommendations for use. Therefore, the packaging of sauces is labeled with images of products that are included in its composition. Alternatively, the packaging shows what foods the sauce can be used with.
2. Practicality. For example, a combined mini-pack was developed for Heinz Dip & Squeeze ketchup. The flexible packaging materials allow it to be used in two ways. Ketchup can be squeezed out of this pack as from a bottle. If the special label is removed, the pack becomes a plate into which food can be dipped. Thanks to the strong materials, the package does not tear or spill its contents when you squeeze it. This design of ketchup packaging is convenient and practical.
3. Minimalism is characterized by a reduction in the number of images and inscriptions on the packaging. Most often the key characteristic of the product is placed on a monochrome background. This can be the type of sauce (ketchup, mayonnaise, ajika) or the main ingredient (tomato, pepper). In this way, the design of the packaging helps the buyer to understand at a glance what kind of product is in front of him and simplifies the choice.

Analysis of the sauces market: prospects

1. The Ukrainian sauces market is characterized by high competition. It is quite difficult for regional companies to compete with large producers. However, there is a relatively free niche of kraft sauces.
2. Sauce producers can attract new consumers with unusual advertising campaigns and UTPs. This will set them apart from their competitors and attract attention.
3. The unstable economic situation will continue to have a negative impact on the sauce industry.
4. Most often sauces are consumed together with some kind of dish: salads, meat, sausage, etc. When the prices of these products rise, they start to be bought in smaller quantities. Sales of sauces fall accordingly. Therefore, the income level of the population will strongly influence the sauces market.
5. Ukrainian consumers will continue to buy the products of domestic manufacturers as the most optimal in terms of price-quality ratio.

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