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            Archive of numbers / Archive of headings
NUMBER:  ¹1   ¹2   ¹4   ¹5   ¹6   ¹7   



¹ 2(2015)

CONTENT


DRINKS
Review of Russian Wine Market
Research of the Company “I-Marketing”

Review of Russian Beer Market
Research of Information Agency “CredInform”


TEA & COFFEE
Review of Moscow Tea Market
Research of the Marketing Agency “FDFgroup”


CONFECTIONERY
Review of Russian Confectionery Market
Research of the Company “ID-Marketing”

Review of Russian Chocolate Market
Research of the Company “Market Analitika”


MEAT
Review of Russian Market of Sausage and Processed Meat Products
Research of the Company “GfK Rus”


FISH & SEAFOOD
Review of Russian Market of Canned and Preserved Fish/Seafood
Research of the Company “Step by Step”


OILS & FATS
Review of Russian Market of Vegetable Oil
Research of the Company “RBC.research”


DAIRY PRODUCTS
Review of Russian Dairy Market
Research of the Company “ID-Marketing”


FAST FOOD
Trends on Russian Snack Market
Research of Agency “Depot WPF”


HERBS, SPICES & SAUCES
Review of Russian Mayonnaise Market
Research of Information Analytical Agency “INFOLine”


TRADE SHOWS
“Prodexpo 2015”


“Upakovka/Upak Italia 2015”

Review of Russian Wine Market
Research of the Company “I-Marketing”

In 2014 offer on Russian wine market constituted 75.1 million dal in volume, minus 6% against 2013. Decline was observed both in segment of domestic wine (-5%) and imported wines (-7%). Reduction of offer was driven by growth of retail prices due to increased excise tax; another reason was decline of disposable incomes of consumers.
In 2014 share of domestic products on Russian wine market constituted 43% in volume, respectively share of imported wines was 57%.
Domestic production of wine in Russia went down to 32.1 million dal last year which was by 5% less than a year before. In 2010–2014 volume of domestic production of wine was declining by 8% annually on the average.
Wine in Russia is mainly produced in Krasnodar Territory; in 2014 the region manufactured 13.5 million dal of wines or 42% of total volume of domestic production. Significant volume of wine was also made in Stavropol Territory - 5.1 million dal or 16% of domestic production.
In 2014 import of wine to Russia constituted 43 million dal (-7% against 2013) in volume and $ 929 million (-6% over 2013) in value. Decline of import in volume was seen by all key supplying countries except Italy and Spain.
Last year wine was mainly imported to Russia from the following countries: Spain (27% of import volume or 11.7 million dal), Italy (11% or 5.2 million dal), France (11% or 4.7 million dal), Ukraine (11% or 4.7 million dal) and South Africa (7% or 2.8 million dal). Cumulative share of other supplying countries constituted 32% in 2014 against 43% in 2013.
Spain increased supplies of wine to Russia in 2014 (+6.1 million dal or 109%). Import from Italy was the same in volume as in 2013. Meanwhile supplies declined from South Africa (-1.1 million dal or -28%), Ukraine (-1.6 million dal or -25%) and France (-0.9 million dal or -16%). Cumulative volume of import from other countries also declined (by 5.7 million dal, -29%).
Positive dynamics of Spanish wines was driven by good balance of price and quality: cost of Spanish wines is on the average by 2.5-3 times lower against Italian and French wines but they offer better quality than African and Ukrainian wines.
In value terms the largest shares of wine import to Russia in 2014 were controlled by Italy (22% or $ 200 million) and France (20% or $ 183 million). Next large share was controlled by Spain (14% or $ 132 million).
Retail sales of wine (HoReCa sales not considered) constituted 69.8 million dal in 2014 which was almost the same volume as in 2013 (60.2 million dal). In 2010-2014 retail sales of wine was declining on the average by 1-2% annually. Noteworthy, share of wine in total alcohol consumption (beer also considered) is quite settled and constitutes 5%. Leader of alcohol consumption in Russia is beer with 80% of consumption volume, it is followed by vodka (8%), so wine is on the third line.
Distribution of wine sales between Federal Districts in general repeats distribution of consumption volume of main food categories and alcohol drinks and is determined by population density. The largest share of sales (30.8%) is provided by Central FD. Next large shares in retail sales are provided by Privolzhsky FD (18.8%) and Northwestern FD (12.3%).
In terms of federal subjects the leaders of wine retail sales in 2014 were Moscow (6.7 million dal or 11.4% of total volume of retail sales), Moscow Region (2.7 million dal or 4.5%), Sverdlovsk Region (2.6 million dal or 4.4%), Krasnodar Territory (2.3 million dal or 4%) and Saint Petersburg (1.9 million dal or 3.3%).
Analysis of retail sales in 2005–2014 shows that according to official statistics consumption of wine is quite settled in volume despite insignificant fluctuations. Increase of per capita sales in 2007-2008 was followed by stagnation in 2009-2010 and then by decline in 2011–2014. In 2014 the average per capita retail sales of wine in Russia “returned” to indices observed in 2005-2008. Interestingly, in 2009 per capita retail sales increased despite recession. This growth was most probably related to declined HoReCa sales as consumers less frequently attended bars, cafes and restaurants and thus increased purchases for home consumption.
During 2010–2014 the average retail price of table grape wine was growing by 9% annually, of fortified wine – by 13%. In 2014 the average retail price for table wine constituted 286 rubles/liter (+10% over 2013), of fortified wine – 375 rubles/liter (+15% over 2013). Growth of prices is mainly driven by increase of excise tax and general increase of prices.
In the summary the following conclusions can be made on current and future performance of Russian wine market.
Growth of prices for wine will continue and it will be mainly driven by such factors as:
* increase of excise tax. In 2015 excise tax of 500 rubles will be applied to alcohol drinks with alcohol content less than 9%; in 2016 the tax will be 600 rubles. In case of drinks with alcohol content exceeding 9% excise tax of 600 rubles will be applied in 2015 and 660 rubles - in 2016;
* general increase of prices. In January 2015 consumer prices increased by 3.9% over December 2014; food categories saw 5.7% increase of prices;
* devaluation of ruble. Weak ruble will affect both import of bottled wine and bottling of imported bulk wine.
Consumption of wine is forecasted to declined, then to increase and settle on plateau. In short term perspective consumption of wine will reduce, mainly because of declined sales via HoReCa channel (this segment provides 15-20% of sales). Sales will also be affected by shutting down of cafes and restaurants caused by devaluation of ruble (for instance, in Moscow about 15-20% of restaurants and cafes can be closed).
Meanwhile per capita retail sales can grow. In long term perspective no serious decline of consumption volume is expected. Certainly, limitation applied to sales of alcohol at night hours affected sales of wine but people got adjusted to new rules. Further increase of consumption will be restrained only by increase of prices.
Unfortunately, increase of excise taxes and growth of prices for alcohol drinks always stimulates shadow market, therefore share of fraud and unaccounted products is forecasted to grow.
Besides, consumer demand is expected to shift to cheaper but quality wines. In the context of increasing prices and decline of disposable incomes consumers will tend to switch to “good wine offered for a good price”. Perfect example here is the increasing import of wine from Spain (+109% over 2013) on the background of declining supplies from other countries. 

Nikita Fedyushin,
Analyst “I-Marketing”

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