Food and Drink Industry
The Food and Drink sector in Romania is a dynamic field, considered as the second largest one in Central and Eastern Europe after Poland in terms of consumer market potential. The sector is one of the main contributors to the Romanian economy, totalling an annual turnover of EUR 10bn. The total food and drink market in Romania was estimated at EUR 20.6bn in retail (79.5%) and EUR 5.3bn in foodservice (21.5%). The food and drink industry in Romania is a core economic sector, nationwide, covering the entire country, with elements concentrating in the four regions: NE, S, SW, W and Bucharest-Ilfov. The food industry represents 27% from the total value of agricultural production, ensuring 240,000 jobs, i.e. 5% of the total active population.
Nowadays, the Romanian food sector is rapidly growing due to the frequent changes in consumer behaviour, as the retail sector has extended beyond expectations in recent years. Demand is still growing and Romanians are adjusting more and more to a lifestyle similar to Western countries, focusing increasingly on bio and organic products, frozen foods, and private labels. As a result, people prefer to shop in a larger hypermarket, where they can find a variety of products and labels at lower prices than in local stores.
The major retailers present in Romania are Carrefour, Cora, Auchan, Kaufland, and Billa. Also Metro and Selgros Cash&Carry are well-developed. Most of the retailers registered profit last year, after modern commerce overpassed the traditional one and the big retails chains opened 270 stores in the country, while extending their online position. The first four places were taken by: Kaufland, Carrefour, Mega Image and Penny Market, while Auchan registered losses after Real's takeover in July 2013. Roland Berger's analysts estimate an annual growth of 3-5% on retail segment in the following 2-3 years, also anticipating an increase in the share of modern retail at nearly 60% of the total. Especially in the retail segment, UK products are not that often encountered.
There are currently 1,200 stores opened country-wide, by both local and multinational retailers.
The main factors in the development of the food and drink industry that should be taken into consideration for every investor include a high growth rate, large FDI, and the fact that it is a strategic sector which offers a wide range of traditional products. However, the inability of the agricultural sector to provide necessary raw materials has a major impact on product competitiveness on foreign markets. Moreover, the sector is highly affected by the lack of a developed agricultural environment, with visible results in the sector's competitiveness.
The UK companies that are currently operating in Romania in the beverages sector include: SABMiller (beer, alcoholic or non-alcoholic beverages), Whittard (hot beverages such as tea or cold ones such as instant tea), and Diageo (spirits).
The sector is accountable for about 11.6% of industrial employment and 2.1% of Romania's total employment rate.
Production facilities are under-utilised, due to the over-sized capacities already existing since the communist regime and to the difficulties in meeting the EU standard which applies to the main IFS Regulations. Most Romanian companies operating in food production find it very hard to comply with EU regulations because of the lack of transparency and Government bureaucracy.
Considering the numerous funds allocated by the EU, as well as the affordable workforce and the specialised workers in this field, there are plenty of opportunities for foreign investors. There are also great opportunities for SMEs in this industry, for which an easy approach could be that of entering into local partnerships.
- Romania is a traditional, agricultural country, wide a wide range products and biodiversity
- The Food and Drink sector is considered the second largest one in Central and Eastern Europe in terms of consumer market potential
- Large consumer base
- Stable workforce, well-trained professional workers on the specificities of the industries
- Increased foreign and national direct investments
- Wide range of traditional products (1,500 products registered nationally).
For further information, please contact the British-Romanian Chamber of Commerce (BRCC):
Mrs Cristina Ungureanu
Romanian Fairs 2014
- Meat & Milk 2014 - EXPO International Conference - 11th-12th June, Sibiu
- Indagra Food – international trade fair for the food industry – 29th October-2nd November
- 2014, RomExpo, Bucharest, http://www.indagra-food.ro/home
- Expo Drink and Wine – wines, alcoholic and non-alcoholic beverages trade show – 29th
- October-2nd November, RomExpo, Bucharest, http://www.targdevinuri.ro/home