The market for food processing is a tantalising one: the value of goods produced and productivity has grown at 7% annually since 2005. Globally, food manufacturing industry has surged since 2000 with total shipment values reaching $6.05 trillion in the world’s major 73 countries—before that, the industry had been stagnating for quite a long time.
A major food and beverage market sector for Poland
Where does Poland fit into all this? Well, it is the largest agriculture and processed foods industry in Central and Eastern Europe – and also 7th largest in the European Union. The agri-food industries combined is responsible for 7% of Poland’s $475 billion GDP.
Poland is especially attractive to foreign visitors due to its solid macroeconomic performance, a developed financial sector as well as a sizeable wage-competitive labour force. Foreign investment in the Polish food processing is happening at a scale and results in the local production of many high quality products that were previously imported.
Poland is at an advantageous position to supply food for Europe, as there are more than 200 million EU citizens living within 1,000 kilometres of its borders. As part of the EU, Poland is also part of the European Single Market, making movement of goods between Poland and its neighbouring EU countries relatively easy.
EU countries already receive as much as 81% of all Polish agri-food exports, with over 50% of Polish exports designated for the German market.
Though Polish food industries are currently stronger in raw produce than they are in processed food products, the trend is changing and moving in what industry experts call “the right direction”, with value-added food production sector growing faster than total volume.
Rapid growth in the Polish food processing sector
The food processing sector is developing rapidly, growing at 9% annually between 2008 and 2011 in terms of value generated. In terms of productivity, the sector grew by 12% while the rest of EU-15 is growing at 1%.
Retail sales in the packaged food market reached a staggering $17.5 billion in 2016, and is expected to reach $20.3 billion by 2021. Processed meat and seafood products is among the biggest businesses in Poland, accounting for $2 billion in 2015, with meat processing taking up 22% of the market share.
Demand for production machinery
Food processing in Poland is relatively modernised—many Polish companies have invested in modern production-line infrastructure. The Polish companies that did invest, invested in facilities that tends to be more advanced than those of their EU peers. According to Wrota Podlasia, a Polish trade portal, farmers who have invested in processing machinery agreed that the investment was worth it.
Industry body Cema is optimistic and expects the market for production machinery to stabilise and even grow by 1% in 2017. Demand for production machinery saw significant declines in 2016 due to blocked subsidy payments that prevented farmers from investing.
This desire for efficient technologies is already revealing itself amongst some of the industry’s biggest members. Poultry meat processor Konspol, for example, is planning on investing $51.6 million in modernising its processing operations after spending $64.5 million on machinery and equipment since 2010.
There is a trend towards larger scale commercial production and greater productivity, and precision agricultural technologies are expected to be in demand as farms grow in size and technological sophistication. Production is also forecasted to grow 10-15% annually over the 2017-2018 period, creating lots of opportunities for equipment suppliers.
Poles’ taste for convenience drives processed food market
Poland imported $10 billion worth of consumer-oriented food products in 2014, and this market also has an export ratio as high as 23%. There are more than 2,600 Polish companies operating in this food processing sector, producing goods valued at over $64 billion.
Poland’s middle class is growing, due to rising wages, increased levels of employment, and disposable incomes, and this will drive demand for processed foodstuffs as well as semi-processed food products that can be used for meal preparations at home.
There is a growing appetite for convenient packaged foods as they fit easily into busy lifestyles adopted by many Poles. Quick service food industries are also booming, indicated by the increasing number of independent mobile platforms offering fast food.
Another trend that can be observed comes from the food processing and catering industries, which are increasingly interested in importing processed baking ingredients such as nuts, dry fruits, flavours and aromas.
Meet the key players in the Polish food processing sector at WorldFood Warsaw
More market insights on Poland’s food processing sector, as well as programmes and presentations that can help your business break into the Poland’s lucrative food business, will be available at WorldFood Warsaw. WorldFood Warsaw is the food industry exhibition that brings together thousands of visitors, including influential industry experts and key government officials.
The event is the perfect place to connect with the important figures that can help you develop your presence in the Polish market. For more information about WorldFood Warsaw, contact our team today.