While businesses in the food and drink, delivery and packaging industries have been focusing on the growth of out-of-home (OOH) dining in Western Europe, Eastern Europe is a relatively untapped market and is showing similar potential for expansion.

Eastern Europe’s consumption of delivery and takeaway food is currently lower than in Western Europe. However, while the Western European OOH market is near saturation, the potential for Eastern Europe’s OOH market to grow is far greater. 

By Dr Liz Wilks, Asia Pulp & Paper’s Director Sustainability & Stakeholder Engagement Europe

According to recent research conducted by Smithers Pira and Asia Pulp and Paper, the majority of Eastern European countries are seeing a 1.9% growth in the packaging sector as a whole, and the sector is expected to grow at 3% per year up to 2020, from 2016’s base value of $48.1 billion. The rise of disposable incomes, changing preferences of young consumers and new tastes for luxury dining are the top three reasons for expected growth in the Eastern European OOH packaging market. 

The rise of disposable incomes

One key factor contributing to the growth of Eastern Europe’s OOH packaging market is a rise in discretionary income, leading to higher demand for takeout and delivery food. As salaries go up, people in the region are choosing to spend more on recreating the restaurant experience without the need to dine out, also fueling a rise in the need for appropriate packaging.

Poland is a prime example of this trend. The APP-Smithers Pira research shows that total food and drink consumption is expected to reach 48.4 million tonnes in 2020, growing 1.6% from 2016 and the market is estimated to be worth €60 billion by 2020. These opportunities in OOH dining mean that Poland is a market packaging manufacturers should look to target in coming years. 

Young populations craving a globalised brand

High numbers of young consumers are also contributing to the increase in demand for OOH packaging predicted for Eastern Europe. Young people in the region associate fast food and global food brands with modernity and style which makes takeaway and delivery meals an appealing treat. 

Romania’s packaging market is set to rise to $2.99 billion by 2020, with a 2.3% annual growth rate – and food packaging, accounting for 32% of the overall packaging market, showing a slightly slower growth rate than the Eastern European market norm at 2.5%. Younger generations in Romania are expected to help drive the growth of out-of-home eating and packaging in their country even further. Already, 20% of all Romanians are reporting that they eat out 1-3 times a week, with 50% eating fast food each month. 

With GDP growth in Romania currently one of the highest of any EU nation, and with over one-quarter (25%) of the population being under age 25, the number of Romanians choosing to purchase takeaway or delivery food looks set to increase. Those hoping to capitalise on growth in the European OOH packaging market should be sure to watch countries like Romania that have high youth populations keen to eat fast foods on par with their Western European peers.

New taste for luxury OOH dining

Finally, the emerging trend for luxury OOH dining is another significant driver of growth for the food and drink packaging market. Furthermore, within this, the desire for healthier food has been leading to new demand for both healthy ingredients and innovative, premium packaging. 

In Bulgaria, where the packaging market is expected to break the $1 billion mark by 2020, food and drink packaging accounts for 44% of the national market share and is on track to grow by 2.6% per year. Research suggests that the Romanian food industry has begun to emphasise healthy ingredients and local options like white cheese and wholegrain breads in response to Romanian consumers’ negative perceptions of fast food. 

This focus on health and luxury OOH food is likely to drive demand for premium paper packaging as part of the healthy branding associated with the market. Paperboard is already the second-most common packaging material in Bulgaria and is expected to grow by 4.2% annually. 

Companies such as Deliveroo are having a transformative impact on the OOH market in Western Europe, and their disruption has also captured media attention. However, the potential of the OOH market in Eastern Europe has attracted less notice. When looking for new opportunities, the packaging industry should be sure to take a second glance at Eastern Europe and its growing potential to be an OOH dining hotspot.