Food industry in Romania

Romania’s food sector is still very fragmented, with a huge number of smaller businesses making up the remaining sales and the top 10 manufacturers controlling about 30% of the packaged food market. The majority of domestic producers sell their goods locally, either through local stores or their own outlets. With substantial economies of scale that allow them to run effective manufacturing methods and distribution networks, a small number of large firms distribute their goods nationwide. A significant portion of consumption in some subsectors, including dairy, still comes from direct sales made by farmers.

Top players

Due to the stringent regulations that formerly governed foreign investment in Romania, numerous multinational corporations have either bought out or formed joint ventures with local firms. The US-based Kraft Foods, the Swiss company Nestle, the Dutch company Unilever, the Norwegian company Orkla Foods, the French company Danone, and the German company Hochland are a few examples of businesses that have engaged in this kind of development.

Czech Hame, a subsidiary of Nordic Partners, also has a manufacturing division in Romania, which supplies the country with canned meat, pates and ready meals. Orkla Foods Romania is a subsidiary of Norwegian food processor Orkla Foods. The business currently runs three factories around the country. Orkla’s main products include butter lines (Linco, Unirea, and Wiesana), canned goods (under the Ardealul brand), and ketchup brands Tomi and La Minut. Early in 2012, Orkla increased the scope of its business in Romania by acquiring all of the shares in Food Distribution Services (FDS), a company established in the country. FDS remains an independent entity, with Orkla Foods Romania continuing as one of its key suppliers.

Detergents, soups (marketed under the Knorr brand), and margarines (marketed under the Delma and Rama brands) are just a few of the fast-moving consumer goods that Unilever trades in. Unilever is a prominent participant in the Romanian margarine market, with activities extending as far afield as Albania, Serbia, and Moldova.

Meat processing

The meat processing sector in Romania is still fragmented, although this is beginning to change as a result of the unfavourable economic climate. Elit Cugir, one of the top 10 charcuterie producers in the country and the top producer in Transylvania, has reported a continuous drop in sales as well as growing raw material costs.
Other businesses involved in the meat processing sector are Caroli Foods Group, Cris-Tim (which is also involved in the dairy market), and Fox. A Spanish company called Campofrio, which was already operating in Romania, has a joint venture with Caroli Foods. Its facility in Tulcea, which could produce 11 000 tonnes of meat annually, was shut down in 2011. Caroli Foods kept up its meat processing at its 36 000-ton-per-year Pitesti production facility. In November 2016, it also announced a EUR 6,0 million investment plan to upgrade the factory.

In the long run, experts anticipate poultry production to do well. Given Romania’s existing poultry shortfall, producers will look to capitalise on rising local demand. Businesses’ attempts to increase production capacity and enhance vertical integration will help the sector. For instance, the acquisition of Banvit by Romanian poultry manufacturer Aaylex was announced in May 2021.

The sector’s efficiency will keep getting better. Due to limited growth in domestic demand and ASF concerns, pork output will continue to drop. The limited beef industry will also face difficulties because, in Romania, beef is not commonly consumed, and market analysers do not anticipate this to change soon.

Confectionery

The confectionery industry has showed a lot of promise in recent years, particularly before the global economic slump, and international businesses are becoming more and more interested in Romania.

Reports show that milk chocolate is the leading sub-segment, with white chocolate and filled chocolate bars coming in second and third. More than 50 companies supply the market, but consolidation has been progressing quickly. Approximately one-fifth of the entire confectionery market is held by Kandia, which also ranks second in the chocolate segment with a 24% share. It offers well-known brands like Anda, Laura, and Kandia. With a 32% market share, the company, which was established in 2004 as a result of the merging of Excelent and Kandia, leads the candy industry. In an attempt to strengthen its position as a competitor in the local market, Kandia acquired its Romanian rival Supreme Chocolat in November 2011. At its plant in Bucharest, the latter produces the popular Primola brand. After Kraft Foods, the expanded company is now the second-largest player in the local confectionery sector.

Kandia Dulce revealed in April 2022 that it will double the storage capacity and expand its production facilities in Bucharest by roughly 30%. It is anticipated that the planned extension will boost production capacity by 4525 tonnes per year, reaching a total capacity of 19 800 tonnes per year.
Together, Milka and Poinana, two of Kraft Romania’s brands, account for 50% of the market for chocolate tablets, giving the company the biggest share. In Romania, Kraft continues to dominate the confectionery industry as a whole.

Multinational corporations like Nestle and Ferrero are also significant players in the industry. Through its local subsidiary Mars Romania, the multinational confectionary giant Mars has also been active in the market since 1994. Mars, Snickers, Milky Way, Bounty, and Twix are among of its most well-known confectionery trademarks, but the company also sells pasta sauces and other products.

One of the top manufacturers of wafers, dried fruit, and nuts is the Romanian company Alka. Its main rivals are importers like Hungarian Mogyi and domestic firms Star Foods (which is also Romania’s top producer of crisps) and Standard Snacks.

Frozen food

Frozen meals are becoming increasingly appealing in terms of both volume and quality as mass supermarket retail and convenience shopping, particularly in urban areas, expand in popularity. Founded in 1993, Macromex is a distributor of frozen and chilled food goods. It has five cross-docking locations in Arad, Craiova, Brasov, Bacau, and Constanta in addition to two warehouses in Bucharest and Campia Turzii. The company’s portfolio consists of over 1700 products, with Edenia, La Strada, and Corso being its most well-known brands. In 2021, the business spent EUR 15,0 million (USD 18,23 million) on a new warehouse close to Bucharest. With a 10 000 square metre footprint, the Corso Distribution Centre can store 2200 pallets of chilled goods and 10 500 pallets of frozen products.

Canned food

Both the volume and value of canned foods sales have been rising. Unlike most other developed markets in Europe, where these foods are considered more of a commodity, Romania’s premium end of the market has driven this expansion. The majority of the sector is made up of canned meats, and canned fruit is not thought to be as beneficial as fresh fruit.

The focus is now firmly on more affordable products, although the rise in the cost of fresh food has led to higher volume sales of canned fruit. One of the major companies in the industry is Norwegian firm Orkla Foods.

Dairy industry

Before recent changes spearheaded by the EU, Romania’s dairy industry was largely self-sufficient. Just 25% of the output was supplied to big processors; the remaining 40% was either immediately consumed or utilised in small-scale local industry. Output levels are rising quickly as a result of industry consolidation and significant investments in modernising facilities. The value of the local dairy market is approximately EUR 40,0 million. Along with French company Danone, Dutch company Friesland, and Romanian companies LaDorna and Hochland, Albalact is one of the top five local dairy producers.

Albalact is investing in the opening of private retail outlets in Cluj-Napoca and Bucharest, just like several other food and beverage manufacturers. The stores exclusively sell private label products under the De Albalact brand. This move is anticipated to increase brand awareness, reduce expenses, and improve Albalact’s brand positioning in light of the growing number of private labels available from major mass supermarket retailers.

In 1991, the local dairy company Bonas was established. From a factory in Dezmir, Apahida commune, Cluj County, the company manufactures dairy goods. The plant can process 15 000 litres of milk per day and occupies more than 1000 square meters. The primary outlets for Bonas products are its eighteen locations around Cluj County, as well as hypermarket chains and small merchants. As part of its strategy, the corporation plans to open more stores, mostly in areas too distant from the production, including through a franchising system. The business also intends to build a new plant.

LaDorna, which was purchased by French company Lactalis in the middle of 2008, primarily produces cheese, dairy products, and liquid milk. For an undisclosed amount, Lactalis acquired the Romanian dairy company Covalact in December 2016. With further businesses already established in Serbia, Moldova, and Ukraine, Lactalis’ regional position was strengthened with the acquisition of LaDorna and Covalact. By purchasing the regional yoghurt manufacturer Obory, Lactalis also made its debut in the Polish market, demonstrating its interest in the Central and Eastern European market as a whole.

Lactalis also owns the Italian dairy corporation Parmalat, which is experiencing expansion in Romania. Parmalat offers a range of domestically produced fruit juices under the Santal brand. Due to their importation, milk products – including the ultra-high temperature milk brands Prima Crestere, Sviluppo, and Parmalat – only account for 2% of Parmalat Romania’s total revenue.

Olympus, a dairy manufacturer, is diversifying its product line. The company introduced Stragghisto Greek yoghurt to the local market after investing over EUR 20,0 million in a new production line at the Halchiu facility in Bra?ov in 2018.

In 2011, Olympus became the first dairy company to introduce Greek yoghurt to Romania, establishing it as a well-known brand. The present line of traditional Greek yoghurts, which are among the most popular items in the category among Romanian consumers, is enhanced with ragghisto. Its yoghurt is sold in the majority of Romania’s big chain supermarkets and is only meant for domestic consumption.

Beverage sector

The Romanian beverage industry has experienced growth recently, driven by a rise in foreign direct investment, and both the alcoholic and non-alcoholic sectors have potential to expand. Since there are only about 100 businesses in the beverage production sector, the market is still somewhat fragmented, therefore international players may choose to expand through acquisitions.

In Romania, beer makes up a substantial portion of the alcoholic beverage industry. Beer has been consumed throughout the nation for a very long time and is still a favourite among consumers. International firms who offer a variety of products to suit varying consumer preferences, like Heineken, Carlsberg, and Ursus, dominate the market.
Romania is one of the top ten wine-producing nations in the world and has a long history of winemaking. Local producers control the majority of the market, while foreign companies hold a relatively small part. Feteasca Neagra, Merlot, Pinot Noir, and Sauvignon Blanc are the principal grape types grown in Romania.

A sizable portion of Romania’s alcoholic drink market is made up of spirits, which are primarily produced locally, with foreign companies holding a comparatively modest market share. Whisky, vodka, and brandy are the most widely consumed alcoholic beverages. Zetea Palinka, Tuica de Bihor, and Stalinskaya Vodka are the primary domestic brands.
One important subset of the non-alcoholic beverage market is carbonated drinks. Despite mounting health concerns, carbonated soft drinks are nevertheless popular among consumers of all ages. International brands with established distribution networks and a significant presence, like Coca-Cola, PepsiCo, and Nestle, dominate the market.