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MHP plans to invest in the ready-to-eat segment

Ukraine’s largest poultry company, MHP, plans to switch from raw material production to food production in 10-15 years, Yuri Kosyuk, the owner of MHP, told Forbes. The new generation of consumers has different habits, and businesses must react accordingly to the latest trends in order to stay successful.
MHP expects major changes in the retail system in Ukraine, too. The basic distribution channels, according to Kosyuk, will be not supermarkets but convenience stores. Photo: Theo Galema
MHP expects major changes in the retail system in Ukraine, too. The basic distribution channels, according to Kosyuk, will be not supermarkets but convenience stores. Photo: Theo Galema

“What does the kitchen of a trendsetter 18-30 years old look like? A frying pan, two pots, a kettle, and a dishwasher. A microwave is no longer needed,” Kosyuk noted, adding that young people now have fewer incentives to cook, and this trend is likely only to gain traction in the coming years.

“There will be very few ready-to-cook [products]. There will be a lot of ready-to-eat. The task for the next 10-15 years [for MHP] is to make a global transition from a raw material producer to a food producer,” Kosyuk said. This transition would require turning MHP into an even bigger business than now, he added.

Not only broilers

Kosyuk also said that the company could possibly be interested in new segments of the food market. “Meat occupies only 20% of your plate. There is a huge undeveloped area – vegetables, herbs, pasta, cereals. We are also going there,” he said.

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Again, in line with new trends, Kosyuk said, MHP could in the future turn to developing directions that are considered the alternative: vegan, lactose-free, gluten-free. However, so far, the demand in these segments appears to be lower than everyone believes. “This is a very niche story. Its share is 5%. At the same time, 16% of trendsetters 18-30 years old talk about healthy food. In words, they choose healthy food, but when they come to the supermarket and vote in hryvnia, these words are not supported by anything,” said Kosyuk.

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New retail model

In the future, MHP expects the retail system in Ukraine to pass through major changes, too. The basic distribution channels, according to Kosyuk, will be not supermarkets but convenience stores. “[This will be] direct to customer – shops near home, convenience stores – those within walking distance from home,” said the businessman.

MHP plans to open 2,000 Miasomarket stores in Ukraine by the end of 2023 as part of changing the sales format, the company announced earlier this year. “McKinsey [an international consulting company] estimated the shortage of convenience stores in Ukraine at about 7,000 units. We want to occupy about 30% of this market,” Kosyuk said.