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¹ 6(2015)

CONTENT


DRINKS
Review of Russian Alcohol Market
Research of Information Analytical Company “VVS”

Review of Russian Cider/Perry Market
Research of the Company “Euromonitor International”

Review of Russian Soft Drinks Market
Research of Information Agency “CredInform”


TEA & COFFEE
Review of Russian Tea Market
Research of Information Agency “CredInform”


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


MEAT
Review of Russian Sausage Market
Research of Information Analytical Agency “INFOLine”


DAIRY PRODUCTS
Review of Russian Cheese Market
Research of the Company “Market Analitika”

Review of Russian Ice Cream Market
Research of Russian Union of Ice Cream Makers


PACKAGE
Review of Russian Market of FBB Packaging
Research of the Company “Abercade”


FOODSERVICE
Franchising in Russian Food Service
Research of the Company “RBC.research”


FINANCE & LOANS
Russian Market of Lease Service in H1 2015
Research of Rating Agency “RAEX” (“Expert RA”)


TRADE SHOWS
The 24th International “WorldFood Moscow” exhibition

Review of Russian Ice Cream Market
Research of Russian Union of Ice Cream Makers

According to official statistics, during January–July 2015 Russia produced 268,604 tons of ice cream, 99.3% of production volume registered during the same period of 2014. Comparative analysis of ice cream production during recent 3 years by Federal Districts showed stability in Ural FD, Northwestern FD, Siberian FD, North Caucasian FD and Far Eastern FD. This year high increase of production volume was demonstrated by Southern FD, plus 24.4%. This impressive dynamics was mainly related to the start of new production facilities of “Korenovsky MKK (Milk Canning Complex of Korenovsk)” CJSC (Krasnodar Territory) and increased production volume in Rostov Region. Less impressive growth, by 2-4%, was observed in North Caucasian FD, Ural FD and Far Eastern FD. At the same time this year was quite unfavorable for Central FD where production volume of ice cream during 7 months declined by 10%, in some months decline constituted 30 and 40%. This decline was mainly driven by Moscow Region. Truth be told, by the end of the review period situation improved a little but total production volume in 7 months constituted just 93.7% of production volume registered during the same period of previous year. Many experts relate this decline to unfavorable weather which is also proved by statistics for Ural FD: last year sales of ice cream there declined significantly but this summer was hot and production volume went up to balance the bottom line. In absolute terms the largest production volume of ice cream was traditionally registered in Central FD (65,518 tons), Siberian FD (59,665 tons) and Privolzhsky FD (58,458 tons).
Location of production facilities determines leaders among federal subjects in terms of production volume. In absolute term the largest production volume of ice cream was registered in Moscow Region (26,750 tons, the largest manufacturer “Russky Kholod (Russian Frost) PO” LLC), Omsk Region (22,237 tons, the largest manufacturer “Inmarko” LLC), Nizhniy Novgorod Region (20,565 tons; “Kalinov Most (Kalinov Bridge)” LLC, “Pospel” GK), Vologda Region (20,360 tons; “IceBerry” GK), Novosibirsk Region (16,504 tons; “Gulliver” LLC, “Kupinskoe Morozhenoe (Kupinskoe Ice Cream)” LLC), Tula Region (14,680 tons; “Inmarko” LLC), Krasnodar Territory (14,548 tons; “Korenovsky MKK”) and Republic of Tatarstan (12,935 tons; “Chelny Kholod (Chelny Frost)” OJSC).
For this report CEOs of ice cream factories and retailers were interviewed about changes in ice cream sales this year. It was revealed that in Privolzhsky FD sales increased by 18%, in Southern FD, Siberian FD and Ural FD sales grew by 10% in each district. Meanwhile decline of sales was reported in Central FD (by 30%) and Northwestern FD (by 20%). In Central FD the interviewed experts related decline of sales to cold weather and bad choice of sales point location. In Northwestern FD negative dynamics was explained with decline of consumers’ purchasing power and reduced expenditure on expensive ice cream varieties. For instance, Tatyana Kuznetsova, Head of Marketing Department in “Petrokholod. Mir Morozhenogo (Ice Cream World)” highlighted that decline of sales was determined rather by macroeconomic factors than cold weather. According to her, in the context of growing prices for food consumers tend to cut expenses and also buy less dainties including ice cream. In Southern FD positive dynamics was related to increased sales of cheaper offerings.
The proof of increased demand for cheaper ice cream is found inpositive dynamics of sales of ice cream in wafer cup observed practically everywhere. For instance, in “Dixy” chain sales of such ice cream increased by 2.5 times since the beginning of 2015. Small packaging enjoys the highest popularity, more than 70% of consumers choose it and about one third of this group chooses plombir in wafer cup. Supermarket chain “Azbuka Vkusa (Taste ABC)” reported 80% increase of sales of ice cream in wafer cup in July against April. In Finnish retail chain “Prizma” ice cream in wafer cup is also the leader of sales; demand for this ice cream kind increased by 2.5 times on the average.
Hot weather in a number of territories stimulated increased consumption of ice cream. According to some estimations, in June sales of ice cream grew at least by 20%. Many ice cream factories were working in 2 and 3 working shifts.
Increasing production of functional ice cream (enriched with vitamins and minerals, low in fat and sugar, etc.) is one of new trends worth mentioning. However, today Russian companies only pack ready vitamins and premixes while in 1980s Russian industry completely satisfied domestic demand for vitamins including demand of food processing industry.
Talking about the problems of the review industry we should first of all mention underdeveloped system of technical regulations and standards on ice cream. Today in Russia there are two kinds of regulative documents applied to production of ice cream: obligatory technical regulations with minimum requirements to production in order to provide product safety, and national standards recommended for observation. Russian Union of Ice Cream Makers repeatedly suggested to make national standards obligatory for manufacturers. However, after establishment of Customs Union system of control and regulation of foods production and sales was changed with more accent on safety than quality. Too few manufacturers consider requirements of quality standards because they are not obligatory. Requirements of technical regulations are often less strict than requirements of standards; sometimes manufacturers do not reveal their technical regulations because refer them to “trade secrets”.
In the summary we can say that Russian ice cream market demonstrates stability. However, performance of Russian economy and certain external factors can have negative impact upon the review category, most important of such factors are increasing prices for raw materials/ingredients and unfavorable exchange rates. 

Valery Elkhov
General Director
Russian Union of Ice Cream Makers

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