The Ukrainian market of disposable dinnerware has been drastically filled over the recent years. About 70% of the products are manufactured by domestic facilities, which, however, does not guarantee its quality. It has been repeatedly reported that the Ukrainian disposable dinnerware is poisonous…

Plastic and paper dinnerware

The favorite products of a start-up Ukrainian plastic dinnerware producer are a 200-g plastic cup and a half-liter “beer” cup. The other assortment depends on the producer’s capacities and imagination. Ukrainian producers are quite ingenious but are short of funds. A half-handicraft industry of $50 thousand may be affordable, but a rare average businessman can acquire a complete brand-new quality processing line of $300 thousand. Thus, large Ukrainian enterprises are based on the used equipment that is by 2-3 times cheaper. No doubt that in this case the processing quality is lost.
However, the growing demand for the products, heavy customs import barrier, relative technological simplicity and the possibility to acquire affordable machinery encouraged many businessmen to open different-scale enterprises ranging from relatively large plants (with prospective production capacity of 10 million cups a month) to work associations.
However, the market has faced the overproduction problem resulting in reduction of prices for final products. But the Ukrainian businessmen have demonstrated their ingeniousness once again: some of them cut the production costs through thinning the cup (plate) walls and bottoms or increasing (sometimes, up to 100%) the share of secondary materials. Besides decreasing quality this approach also contributed to hazardousness of the products.

Paper cups are even a more difficult issue. They are more eco-friendly, and therefore are more popular than the plastic ones in the West. However, their simple looks result from a time-consuming production process. Ukraine has only two paper plate manufacturers – the Kiev carton and paper plant and the Ukrainian printing company – both exporting all their products to Russia.

Wholesale and Retail

The major share of the disposable (especially, plastic) dinnerware sold in Ukraine is manufactured domestically since the state supports the domestic producer. The import duties for plastic dinnerware amount to 50% (full) and 25% (preferential), for paper dinnerware – 20% and 10%, respectively. However, there are some foreign products. At large, the disposable dinnerware market has a classic wholesale operation pattern. An importer buys bulk quantities of the goods from foreign wholesalers at low prices (these companies often cooperate with Ukrainian producers too). Then the goods are resold to regional wholesalers.
One way or another, should the goods prove to be hazardous and should the Ukrainian producers do nothing to improve technologies or the raw material quality, the customer will eventually prefer more expensive and certified foreign products to the cheap domestic ones.
The disposable dinnerware is not the best choice for wholesalers since it requires lots of warehouse space due to its volume but does not cost much. It is hard to generate high profits from these goods alone. Therefore, there is a rule to make the disposable dinnerware an addition to the main assortment and keep its share at about 15% of the company turnover. If the company is a café, bar or restaurant dinnerware supplier, its assortment includes on average 10-15 types of cups and plates and 40 types of beverage tubes in large packs of 50-1,000 pieces. The main share here belongs to domestic producers. The companies that supply their products to supermarkets more often have foreign and Ukrainian sets of 6, 10, 12, 24, 25 and 36 pieces with plates, cups, forks and spoons made in one style. Disposable dinnerware is a classic related product, a light and quite profitable addition to the main assortment at the markets and small food shops, where low sale volumes are compensated by up to 150% extra charges. An important retail element of plastic and paper dinnerware sales are supermarkets. Here it is worth describing the role of merchandising in chain promotion of this type of goods.
Since shop sales assistant usually do not care much about selling, placing and replenishing these products, the placing and replenishment duties rest with the wholesaler. According to one of them, each merchandiser covers not more than three supermarkets. An efficient merchandiser helps sell the placed goods within 3-4 hours. According to company experts, the chains not wishing to work with “stranger” merchandisers sell low quantities of disposable dinnerware.
Wholesalers would also like to create aisles of non-fast moving consumer goods leading to food shelves similar to Western supermarkets. However, those who oppose to these “novelties” argue that additional obstacles in the way of the Ukrainian customer may scare him off from such an “overloaded” shop.

Natalia Droshneva