Monday, 12 December 2011

Packaged Food in Slovenia

Healthy value growth continues in packaged food in Slovenia during 2011
Packaged food in Slovenia is expected to have performed well during 2011, with positive growth projected across the majority of packaged food categories. However, when comparing growth rates from 2011 with growth from previous years of the review period, it is also clear that growth is slowing down in the majority of packaged food categories. This is mainly result of the residual effects of the global financial crisis, which is leading to Slovenian consumers thinking twice before parting with any amount of money, no matter how small. The ongoing high level of price sensitivity in Slovenia is leading many consumers to turn towards lower-priced packaged food, especially private label.

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Health and wellness and greater convenience remain the major trends
Two major trends had a significant impact on packaged food in Slovenia during 2010 and the first half of 2011. The first of these is the health and wellness trend, which remained the most influential trend in packaged food in Slovenia throughout the second half of the review period. As health awareness continues to rise among Slovenian consumers, demand for natural and healthier products is increasing. As a result of this, packaged food made using natural ingredients which offer additional benefits such as fortification with vitamins and calcium performed very well during 2010 and 2011, as did packaged food which contains less fat and fewer calories. Furthermore, packaged food which targets consumers with specific health needs also prospered during 2010 and 2011. The second important trend influencing packaged food in Slovenia during the second half of the review period was the rising demand for greater convenience. This arose as a result of Slovenians having less spare time than ever, leading them to demand packaged food which can be prepared and consumed quickly and easily.

The predominance of domestic producers is set to continue
Slovenian consumers generally prefer domestic packaged food brands and products and this has resulted in domestic producers dominating packaged food for some time. Artisanal bakeries and Ljubljanske Mlekarne dd are the leading players in overall Slovenia packaged food industry. These are all domestic producers and a similar picture also becomes apparent when looking at the company rankings within specific categories. In the majority of packaged food categories, the leading producers are all domestic companies. Nevertheless, the influence of multinational companies remains highly evident and cannot be ignored.

The popularity of one-stop-shopping continues to build
Slovenian consumers generally enjoy purchasing many grocery items at one place, which is the main reason for grocery retailers holding the vast majority of distribution share within packaged food in the country throughout the review period. Supermarkets/hypermarkets remains the most popular distribution channel for packaged food in Slovenia, although the popularity of discounters increased during the second half of the review period as the global economic crisis took its toll on Slovenia’s economy. This was mainly due to the lower prices attached to the products offered within discounters outlets, which attract a significant proportion of Slovenia’s generally price-sensitive consumers. Apart from large format grocery retailers, other important distribution channels for packaged food in Slovenia are small grocery retailers, specifically convenience stores, which was the most important small grocery retailers channel for the distribution of packaged food in Slovenia during 2011. However, these small grocery retailers channels are steadily losing distribution value share in the majority of packaged food categories due to still rising popularity of one-stop shopping and the rising demand for the lower prices charged for goods through chained large format grocery retailers.

The future of packaged food in Slovenia remains positive
Packaged food in Slovenia is expected to perform well during 2011, with positive value sales growth also expected to continue throughout the forecast period. However, when comparing the projected performance of packaged food in Slovenia for the forecast period with the growth registered during the review period, it is clear that the growth rates are set to be lower during the forecast period than they were during the review period. This is expected to be mainly due to the lingering effects of the financial and economic instability in Europe, specifically in smaller countries of the Eurozone, and the ongoing price-sensitivity of Slovenian consumers. As soon as the global and regional economic situation improves, however, value sales growth rates in packaged food in Slovenia can be expected to begin rising again.

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