Abstract
Why buy this report
- Get insight into trends in market performance
- Pinpoint growth sectors and identify factors driving change
- Identify market and brand leaders and understand the competitive
environment
Product coverage
Baby food; Bakery products; Canned/preserved food; Chilled processed food;
Confectionery; Dairy products; Dried processed food; Frozen processed food;
Ice cream; Impulse snack products; Meal replacement products; Meal solutions;
Noodles; Nutrition/staples; Oils and fats; Pasta; Ready meals; Sauces;
dressings and condiments; Snack bars; Soup; Spreads; Sweet and savoury snacks
Executive summary
Packaged food sees dynamic but variable performance
At the end of the review period, packaged food in Azerbaijan showed dynamic
retail sales growth. Due to price increases in 2007, however, some areas of
packaged food experienced slower or declining retail sales growth. A general
rise in productivity, level of income and the living standard of the
population helped stimulate active economic development, especially industrial
manufacturing. An increase in the variety of packaged food products available
also stimulated sales growth. Nonetheless, some areas of packaged food saw
declining sales due largely to changing consumer attitudes and perceptions.
Health concerns, changes in eating habits and the increased availability of
alternative products were all significant factors in shifting patterns of
consumption.
Key trends affect specific products and lead to rising sales
By the end of review period, a few consumption trends were evident. Among
women and some younger consumers, there was a switch to white chocolate, which
has no caffeine, in chocolate confectionery. Some consumers, believing that
gum chewing after eating would accelerate digestion and decrease calorie
absorption, began using gum to lose weight. Women, in particular, increased
their consumption of plain yoghurt in order to lose weight. Packaged fish
products gained popularity as a result of publicity regarding the health
benefits of eating fish. Local journals provided a variety of recipes
highlighting fish as a healthy food that does not promote weight gain.
Imports continue to lead sales
At the end of review period, local production was still lacking in baby food,
gum, breakfast cereals and snack bars. All brands of these products are
imported, mainly from Russia, Ukraine, Turkey and Germany, or through
primarily Turkish, Ukrainian and Russian subsidiaries of the leading
multinationals. Although local milk production is well-established through the
domestic company, Milk-Pro Ltd, and milk is an important element in baby food,
retail sales of baby food in Azerbaijan are dominated by imported products. In
other categories, domestic manufacturers participate in retail sales of both
bulk food and packaged food to some extent.
Improving distribution broadens appeal of packaged food
The distribution networks for packaged food improved over the review period,
as local players increasingly targeted independent food stores and
supermarkets. Food products were sold mainly through supermarkets, independent
food stores, discounters, open markets, kiosks, street vendors, bazaars,
pharmacies/drugstores (only baby food) and department stores in Azerbaijan.
The most popular means of distribution were independent food stores,
supermarkets and discounters. Supermarkets, which carried the leading brands,
was the preferred channel for purchasing frozen processed or chilled processed
food and ready meals because consumers felt confident they were buying
high-quality products. Independent food stores also became very popular over
the review period. However, rising prices impelled many consumers to seek out
lower-cost products in discounters, wholesale stores, or open markets.
Independent food stores and kiosks remained popular for consumers purchasing
gum, bread and chocolate confectionery such as countlines. During the summer,
sales of gum and ice cream from refrigerated boxes were common in parks and
along boulevards and streets.
Growing sales and intensifying competition expected in packaged foods
Rates of sales growth are expected to rise in all areas of packaged food
during the forecast period. In some categories, such as confectionery and
biscuits, local manufacturers will become increasingly important in bulk
(sold-by-weight) sales. New, locally-produced unpackaged cakes and pastries
will likely appear during the forecast period. New launches, such as mixed
flavours in gums, are also anticipated. In addition, competition between
domestic manufacturers and multinationals will likely intensify from 2007 to
2012
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