'Back to normal' drives convenience sector

The COVID-19 pandemic, the accompanying restrictions and disruptions to normal economic activity led to a temporary crisis for many branches of the Polish industry. Last year was also a challenging time for the entire food industry - including the convenience sector. A category that has grown like no other in recent years, only to disappear almost completely during the global pandemic crisis. Now it is coming back, and in style.

The food industry is a market area that has always been subject to dynamic change. Of course they are forced  by consumers and we, as producers, try not only to meet their expectations but also to anticipate upcoming trends. A certain cycle was disrupted by the pandemic, which affected almost all industries, but also the behaviour of consumers, who, fearing for their health, but also in the face of administrative restrictions, changed their previous purchasing and eating habits. The segment that decelerated strongly during the first wave of COVID-19 was convenience. This is a sector that has almost modelled growth in Poland in recent years, building fantastic business prospects for manufacturers. Producers of bread, sausages, suppliers of vegetables, sauces and other popular products eagerly invested in expanding their businesses and their machinery, expecting a steady continuation of the positive trend for so-called snacks. However, the beginning of 2020 changed reality almost overnight.

Restrictions on movement, the obligation to work remotely, empty office buildings, customer limits in grocery shops - everyday rituals associated with eating meals, such as quick breakfasts or lunches in shops or at petrol stations, ceased to function overnight. It is worth remembering that the pandemic has significantly changed the way we think and perceive our surroundings. At its peak, the vast majority of us wore masks, gloves and kept disinfectant in every pocket. The last thing we thought about was eating outside our own homes.

pwc retal platform

Karolina Zajezierska
Commercial Director
NOWEL

However, after a difficult period for the industry and society as a whole, the time has come for a return to previous habits among consumers and stability for producers. The partial return of employees to the office, loosened restrictions and a fairly good economic situation have noticeably improved consumer mood, which directly affects the sales of snacks and "to go" products. This trend, which has been growing for several years, favours both discounters and well-liked by Poles neighbourhood shops, such as Żabka, Carrefour Express and others. According to the report "The Polish grocery retail market in 2010-2020", the joint market share of discount and estate shops has increased by 13 p.p. in the last 10 years. (from 21% to 34%). In addition, according to the 'What's Fueling the Convenience Sector in 2021' report, many convenience stores will continue to expand their services - effectively blurring the distinction between traditional fast food restaurants and multi-convenience shops or gas stations. This market is also driven by infrastructure development. One example is Orlen, which invested heavily in developing its snack offer at petrol stations a few years ago. The company has a similar plan for the acquired RUCH. Recognising the gigantic potential of this retail chain, it promises to create shop and food formats under a brand that is well known throughout the country.

Today's convenience sector assortment ranges from sandwiches and ready meals to fresh salads or crispy hot dogs, which have become a real phenomenon in Poland. Already research conducted by Kantar in 2019 showed that Poles have fallen in love with hot dogs - as many as 3 out of 10 Poles admitted that they choose this type of meal. And snacks have been appreciated not only by consumers, but also by ambassadors of good taste, who have been shaping Poles' sensitivity to tasty food for years. One example is the widely popular in Poland Robert Makłowicz, who has successfully engaged in the "Around the Taste Journeys" project and has been developing his own sandwiches and hot dogs in cooperation with the BP network.

The development of the convenience segment is favoured (and will be favoured in the coming years) by fast lifestyles and the need for easy and convenient solutions, growing awareness in the area of health, demand for high quality products. But also our mobility, particularly visible during this year's holidays. Almost half of Poles are spending this summer mainly at the seaside and in the mountains, and less frequently at the Masurian lakes. The popularity of domestic destinations combined with high prices in bars and restaurants, translated at that time into record sales of bakery products in tourist destinations, but also along the expressways we took for our well-deserved holidays.

If we add to this good access to outlets, their convenient location and long working hours, the increasing frequency of purchases, we have a very good outlook for the sector as a whole.

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