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5/2017


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DRINKS
Review of the Russian Beer Market
Research by the Company Euromonitor International

TEA & COFFEE
Review of the Russian Tea Market
Research by Company Step by Step

CONFECTIONERY
Review of the Russian Market of Chocolate Products
Research by the Company NeoAnalytics

Review of Foreign Trade Cookie Supplies in Russia
Research by Information-Analytical Company VVS

MEAT
Review of the Russian Turkey Market
Research by the Company Global Reach Consulting

DAIRY PRODUCTS
Review of the Russian Dairy Market
Research by the Company Market Analitika

Features of Branding in the Russian Cheese Market
Research by the Branding Company Labelmen

FAST FOOD
Review of the Russian Market of Snack Bars
Research by the Company Euromonitor International

CANNED/PRESERVED FOOD
Review of the Russian Market of Canned Meat
Research of the Company Step by Step

EQUIPMENT & MACHINERY
Russian Imports of Confectionery Equipment
Research by the Company ID-Marketing

PACKAGE
Review of the Russian Market of Shrink Films
Research by the Company Abercade

TRADE SHOWS
21st International Fair for Packaging Machinery, Packaging, Confectionery Machinery Interpack-2017


22nd International Specialized Exhibition of Materials and Technologies, Machinery and Equipment for Manufacturing of Packages RosUpak-2017


FINANCE & LOANS
The Russian Leasing Market
Research by the Rating Agency RAEX (Expert RA)

Review of the Russian Market of Disposable Tableware

Research of the Company I-Marketing

The Russian market of disposable tableware in 2016 grew by 5% to 2015 and reached the volume of around 14 billion units. It should be noted that before 2015 the disposable tableware market was growing by 8-10% on average every year. The key factor for growth in disposable tableware sales in Russia is the development of fast food. In 2016, the fast food segment, which accounts for up to 50-55% of the public catering market, increased by 5-8% to 2015. At the same time, the catering market as a whole declined by 6-8%.
The reason for growth of the fast food segment is simple: the three leading companies (the total share of which amounts to 70-80%) McDonalds, Burger King and KFC are actively developing and expanding their chains despite the crisis.
According to the Russian Federal State Statistics Service (Rosstat) and the Federal Customs Service of Russia, in the structure of the disposable ware market by origin, in 2016 around 89% in physical terms fell on domestic products, whereas the share of imports amounted to about 11%. Due to the devaluation of the ruble imports of plastic tableware decreased by 6%, and imports of paper tableware dropped by 13% in volume terms and by 9% in value terms.
The leading position in the market is held by plastic ware its share amounts around 60% in physical terms. The share of paper tableware is about 40%, although in the future the proportion will change and the share of paper ware will be growing. This has to do with the development of fast food chains, primarily the expansion of the leading fast food players, namely McDonalds, Burger King and KFC, to Russias regions. The largest share in imports of disposable plastic ware into Russia belongs to China, its share in the overall import volume amounting to 50 and 48% in volume and value terms respectively. The product is also imported from Poland, Belarus, Italy and Germany as well as a number of other countries with insignificant shares.
In 2016 a decrease in imports of plastic tableware into Russia was observed and concerned the majority of supplying countries, with the exception of Belarus.
Russian exports of plastic tableware are mainly directed to the CIS countries, Kazakhstan serving as the main purchaser and accounting for 50 and 54% in volume and value terms respectively. Lower volumes are exported into Belarus, Ukraine, Kyrgyzstan and Tajikistan.
In imports of paper tableware into Russia the largest share is accounted for by China, even though it is lower than its share in plastic tableware supplies, and equals 39% in both volume and value terms. Over the past 2 years, imports of paper ware from Italy decreased in volume terms, while growth was recorded in supplies from Turkey, China and other countries. In monetary terms, there was a decrease in import volumes from all the key supplier countries.
The key recipient countries of Russian paper tableware exports are countries of the CIS Kazakhstan and Belarus. Kazakhstans share in 2016 equaled 33% in volume and value terms, and Belarus had a share of 32%.
The Russian disposable tableware market is expected to grow in the short term due to the expansion of fast food chains. An issue to note here is that the majority of manufacturers are unlikely to take a large piece of the fast food pie, as major fast food players tend to work with major players of the packaging industry. For example, McDonalds, KFC and Burger King purchase paper ware from the Finnish Huhtamaki (the company owns two factories in Russia, in Moscow region and in the Republic of Tatarstan). By the way, Kofe Khauz (Coffee House) and Shokoladnitsa (Chocolate Girl) also cooperate with this company. Therefore most producers will have to get by with local, regional and national chains and restaurants.
It should be noted that the revenue of Huhtamakis Russian department (Huhtamaki S.N.G. (CIS) LLC) amounted to 5 billion rubles in 2015, which is 21% higher than in 2014 (4.2 billion rubles) and two times higher than the value in 2011 (2.4 billion rubles).
We would like to highlight the plans of the largest fast food chains in terms of development in Russia. McDonalds, one of the leaders in the segment, opened 73 restaurants in 2016. 50 more restaurants in Russia are planned for 2017 by the company. In particular, McDonalds is planning to open 20 in Siberia over the next 5 years.
AmRest LLC (KFC and Pizza Hut brands) is planning to open 100 KFC restaurants in different regions of Russia during the next 3 years.
Burger King Russia is aiming to double the size of its chain in the nearest future and to increase the number of outlets in the country to 500.
In addition, G.M.R. Planeta Gostepriimstva (Planet of Hospitality) (Sbarro and Vostochny Bazar (Eastern Bazaar) is planning to open about 30 restaurants in 2016-2017.
To sum up, the following can be concluded: the Russian market of disposable tableware has a lot of potential for development. Said potential is connected to the Russian public catering market, the largest consumer of disposable ware, lagging behind European countries and the USA. It is obvious that the Russian catering market will aim for the level of the markets of public catering in developed countries. Nevertheless, there is a number of limiting factors. Firstly, the crisis in the Russian economy and the declining purchasing power of the Russian citizens will affect the situation. Secondly, one of the few catering segments having demonstrated growth in crisis was the fast food segment. At the same time almost 55% of the public catering market falls on the fast food segment, up to 80% of which is occupied by the three largest players McDonalds, KFC and Burger King. These chains are and will be the engines of development of fast food in Russia and the key consumers of disposable paper tableware.

Nikita Fedyushin,
Analyst
I-Marketing,

Aleksey Sirotov,
Analyst
I-Marketing





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