Even with accession to the EU, living standards and disposable incomes in much of central and eastern Europe remain lower than in the west, but this has not stopped food companies from seeing the former Soviet countries as something of a 'promised land', in particular for product sectors which are stagnating in the west.
Breakfast cereals are a case in point, with a number of recent product launches in central and eastern Europe suggesting that manufacturers are increasingly turning their attention to an underdeveloped niche there. But manufacturers are also taking something of a gamble - focusing on the premium end of the market at a time when most consumers are still following traditional breakfast consumption patterns.
The gamble is clearly one that manufacturers believe is worth taking, with growth in cereal markets in central and eastern Europe outstripping that in the west. In Poland and Russia, the two biggest markets, for example, growth has been in excess of 5 per cent, according to statistics from Global Food Markets/Leatherhead Food International.
The statistics show that in 2003 the Polish market consumed 31,500 tons of breakfast cereal at a value of PLZ 360 million (€78m), but the market continues to be dominated by relatively unsophisticated flaked cereals (92 per cent of the consumption), while the slightly more upmarket muesli took the remaining 8 per cent.
Significantly, though, some 46 per cent of breakfast cereals were marketed at children, a perennial driver of growth in western markets, and one with substantial potential for development. Indeed, helped by a further focus on children's cereals and other niche products, Leatherhead predicts that Polish market growth will be approximately 5.9 per cent in the coming year.
The challenge is a harder one in the Russian market. Although 450,000 tons of breakfast cereals were consumed in 2003, according to Leatherhead, a massive 97 per cent of this total was attributed to kasha - traditional porridge made from oats.
Consequently, the market for luxury packaged cereals accounts for just 3 per cent, with such products costing on average four times as much as traditional oats.
But despite the small market for more sophisticated products at the moment, the potential is clear. "There is a growing market for packaged breakfast cereals throughout the region as consumers there become increasingly adventurous and more affluent," said Stephanie Melikian, market analyst at Leatherhead Food International.
"Basically, consumers there are wishing to emulate consumer patterns in the west and in doing so they are looking for three essential elements: convenience, health and taste."
These aspirations have clearly been undestood by the cereal makers themselves, with virtaully all the major product launches in recent months focusing on the smaller, premium segment, and on niche areas within it, according to data from Mintel's Global New Product Database.
In the Czech market, for example, Nestlé has introduced the cereal version of its popular chocolate countline Lion, while Poland's Granex has launched a brand called Kraks, both of which are targeted at children. Nestlé's product is designed to appeal to children who are already fans of the chocolate bar, while Granex has gone for a more health-orientated approach, stressing the fact that Kraks is fortified with 10 vitamins and minerals.
Health is the main marketing strategy for cereals aimed at adults as well. In Russia, for example, the Caravan company has launched a muesli with fructose and papaya , while Novo-Nikolaev Products' new Phyto Snack (part of its wider Clever Phyt brand) is also aimed at the health-conscious consumer looking for a low-calorie way to start the day.
But traditional oat meal has not been completely ignored, according to the GNPD, with manufacturers seeing opportunities to raise the profile of this traditional favourite through added-value offerings. In Hungary, for example, Emco has launched Express Oat Meal with Apple & Cinnamon.