upackovka

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world-food
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4/2018


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DRINKS
Russian Alcoholic Beverage Retail
Research by the Company RBC Market Research
Review of the Healthy Beverage Market in Eastern Europe
Research by the Company Euromonitor International
Review of the Russian Market of Juices
Research by the Company AnalyticResearchGroup
CONFECTIONERY
Review of the Russian Market of Sugar Confections
Research by the Confectionery Market Research Center
MEAT
Review of the Russian Market of Meat Products
Research by the Company Laboratoriya Trendov
OILS & FATS
Review of the Russian Market of Margarine and Specialty Fats
Research by the Company ID-Marketing
DAIRY PRODUCTS
Review of the Russian Dairy Market
Research by the Company Step by Step
Review of the Russian Market of Ice Cream
Research by the Company IndexBox
DRIED GOODS
Review of the Foreign Trade Market for Grains*
Research by Information-Analytical Company VVS
RETAIL
Review of the Russian Market of Food Retail
Research by the Information Agency INFOLine
PACKAGING
Review of the Russian Market of Packaging for Liquid and Viscous Foods
Research by Experts
Trends in the Packaging Market
Research by Credinform Information Agency
TRADE SHOWS
The 19th International Exhibition Cibus-2018
The 22nd International Exhibition for Food Products and Drinks Interfood St. Petersburg
27th International Beer-2018 Exhibition and Fair
FOODSERVICE
The Russian Market for Catering Chains
Research by the Company NeoAnalytics
FINANCE & LOANS
Leasing Market in Russia
Research by RAEX (Expert RA) Rating Agency


Review of the Russian Cheese Market

Research by the Company Global Reach Consulting
The dairy product market in Russia continues to grow, although the rates are slower compared to 20142015. The trend that started in late 2015 growing cheese production continued in 2016, even though it became less dynamic, as can be confirmed by data provided by Rosstat. Whereas in 20142015 production of cheeses in Russia was growing by 14-15% per year, during the first 11 months of 2016 the volume of production increased by 2.5%. Analysts at Global Reach Consulting (GRC) estimate the preliminary results of the year to be at the same level (around +2.5%).
According to experts, the decrease in growth rates is caused by several factors, such as:
* the existing shortage of raw milk;
* competition with foreign producers, who significantly increased supplies of relatively cheap products to the Russian market in crisis (these partner countries include Belarus and Serbia);
* the weakening of consumer demand for the expensive segment of cheeses, which resulted in reduced current assets of producers.
As explained in the Ministry of Agriculture, one of the reasons of the negative trend in the formation of the raw material base for cheese production is the decrease in raw milk output caused by the reduction in the cattle livestock. Said reduction, in turn, was a result of the growth in production costs and, as a consequence, declining production efficiency. By the end of August 2016, the number of cows in agricultural enterprises had declined by 1.3%. At the same time, the Ministry of Economic Development states that demand in the Russian dairy market has been increasingly shifting toward cheap whole milk products against milk-heavy products such as cheeses and butter.
Despite the trends of the recent years caused by Russias counter-sanctions against certain countries, the overall volume of cheese imports in 2016 increased. According to the actual data for the first 10 months, growth equaled 8.1%. The bulk of imports (86%) was provided by Belarus this partner country supplied over 156 thousand tons of various cheeses. The top three countries also include Argentina and Serbia with much lower shares of 4% each. During the given period imports from Belarus and Serbia grew by 15-16% to the figure of the previous year, whereas supplies from Argentina declined by 10%.
It should be noted that not long ago the Russian market began to receive products from Armenia. According to the Customs Service of Armenia, the Russian Federation is the main importer of Armenian dairy products. Due to the sharply increased demand for cheese of Armenian origin, the government decided to adopt two programs for the development of dairy farming. The first program involves purchasing high producing dairy cows abroad, and the second program is to develop cooperation in agriculture. Armenia supplies both national cheeses and European varieties and mozzarella to Russia.
Regarding cheese sales in Russia, retail sales of fat varieties of cheeses have been growing rapidly year by year. In 2015, almost 329 billion ruble worth of fat cheeses were sold, which is 11.4% more than in 2014 and over 2 times more than in 2009. Analysts at GRC estimate growth in sale volumes of this product to be at 8-10% in 2016. The following trend can be clearly observed in the market: the main demand is formed by products of the low and mid-price segments (up to 400-500 rubles per kilogram when it comes to hard and semi-hard cheeses). The trend primarily has to do with the decrease in the purchasing power of the population. Prices for such milk-heavy products as cheeses are always rather high. In addition, cheese production costs gain additional growth due to increasing expenses on equipment imported for production, imported ingredients and more. The decline in purchasing power together with the price increase for cheeses led to Russians starting to choose cheaper cheese varieties.
Cheese varieties most in demand in the domestic market are as follows: Rossiysky (Russian) (almost half of cheese consumers opt for it), Gollandsky (Dutch), Poshekhonsky, Kostromskoy and Gouda.
Leadership in cheese sales in the Russian market is still held by Hochland Russland LLC. In 2015 the share of this manufacturer in the revenue structure of Russian companies of the cheese industry amounted to 16.7%. Significant shares also belonged to Syr (Cheese) Starodubskiy LP (Bryansk region) and UVA-Moloko (UVA-Milk) LLC (Izhevsk) 7.3 and 6.8% respectively. Belebeevsky Molochniy Kombinat (Belebey Milk Factory OJSC (Bashkiria) and Yantar (Amber) CJSC (Voronezh) occupied 5.5 and 4.5% of the revenues respectively. It should be noted that every year the number of companies active in cheese production increases.
Another trend in the cheese market that has been concerning domestic consumers recently is falsification of Russian products. Checks carried out by the Russian Federal Service for Veterinary and Phytosanitary Surveillance (Rosselkhoznadzor) showed that the share of products in the dairy market not meeting the regulatory requirements is over 25%. In the segment of cheeses the situation is even worse: according to the agency, over 78% of products presented to the consumer as cheese are not actually cheese, as they contain vegetable fat in a great proportion. The share of falsified cheese in Moscow and Moscow region reached 45%.
In order to stabilize the situation in the market, the Ministry of Agriculture proposed interventions in the market of milk and cheese. According to the Ministry, said activities may start in May 2017.

Anna Berdysheva,
Analyst of Department of Business Planning
and Marketing Researches
Global Reach Consulting




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