Palm Oil Internet Seminar

Section 2: Global Palm Oil Market Opportunities:
Ukraine's Household Cooking, Hotel & Catering Sector - Prospects For Palm Oil
By: Ms. Olga Mozgova

Analyst specialized in food industry and agribusiness. Significant experience in preparing analytical materials and market researches of economic trends and legislation of Ukrainian and international markets of material and technical supply of agricultural and food sectors. Formed working contacts with Ukrainian and foreign participants of these markets.

Centre of Marketing Researches "UkrAgroConsult" - Нead of projects, Analyst of food markets.

Various vegetable oils are used in Ukraine for food cooking.

The most popular in the country is sunflower oil, as it is a national product. Sunflower oil is normally applied for dressing salads and frying, but it is also added to many industrial items: canned foods, margarines, cooking fats, sauces etc.

Sunflower oil is still the main vegetable oil in household cooking. Other vegetable oils of this group are used much less. This is largely explained by national cuisine traditions and the mentality of consumers.

The main driver of using vegetable oils by HoReCa businesses and other catering
companies is the quality/price ratio.

Businesses exploiting the oil frying technology seek to optimize technological processes of cooking. Therefore, many catering facilities more widely use special frying oils and fats in recent years.

At the moment, almost every catering establishment in Ukraine is equipped with deep-fat fryers. The list of ready-to-eat products made in fryers is quite long: pies, donuts, meat pastries, potatoes and other vegetables, poultry meat and various national dishes, even including confectionary items.

In terms of the price and service levels, HoReCa businesses in Ukraine are broken down as follows:
• elite (premium-class) restaurants
• mid-price (affordable) ones,
• inexpensive (economy-class) cafes-bars-restaurants

Trade sources estimate that some 30,000 HoReCa businesses now operate in Ukraine, including over 2,000 in Kyiv.

International fast-food chains (in particular McDonalds, KFC) as well as national brands are quite widely represented in Ukraine.

The representation of the fast-food segment differs between Kyiv or other metropolises and the regional level. Some 20 fast-food brands operate in Kyiv as of today. Their number in the regions is difficult to calculate, but each major region has at least 2-3 of own ones. The latter develop exclusively within one territory and have no intentions, means or necessity to expand their business.

Fast-food outlets are the key consumers of specialized oils and deep-frying fats.

A distinctive feature of the catering market is that it is underfilled – such establishments boast high attendance. In other words, this market is not saturated. In particular, the number of restaurants per resident in Kyiv is 8-9 times smaller than in other European capitals.

Increasing popularity of fast-food outlets is fueled by demand (especially from young and middle-aged people) for fast servicing, payment convenience and the possibility to buy and consume food on the go.

The above suggests that the sector will continue developing, and demand for fat products, including those based on palm oil, will be high.

According to forecasts, the market is to continue growing. New companies, both national and international ones, will enter it in the future if the political and economic situation normalizes. They will develop rapidly, use franchises and create consolidated companies, thereby increasing the number of catering outlets and generating strong demand for fat products.

The full report will only be available from Feb 24, 2020 onwards.
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