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6/2017


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DRINKS
Prospects of Development of the Russian Wine Market
Research by the Center for Investigations of Federal and Regional Alcohol Markets (CIFRRA)

Review of the Russian Beer Market
Research by the Company I-Marketing

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

CONFECTIONERY
Review of the Russian Confectionery Market
Research by the Information Agency Credinform

Review of the Russian Market of Fruit Preserves
Research by the Company I-Marketing

MEAT
Review of the Russian Meat Market
Research by the Company Market Analitika

FISH & SEAFOOD
Review of the Russian Market of Fish and Fish Products
Research by the Company NeoAnalytics

DAIRY PRODUCTS
Review of the Russian Dairy Market
Research by Information Agency Credinform

Ways to Increase Realization of Expired Food Products
Study by the Marketing Agency ScanMarket

INGREDIENTS
Review of the Russian Market of Starch Products
Research by the Company ID-Marketing

TRADE SHOWS
22nd International Exhibition Agroprodmash-2017


4th exhibition Anufood China-2017


34th Exhibition Anuga-2017


Exhibition Drinktec-2017


26th International WorldFood Moscow Exhibition


FOODSERVICE
Review of the Russian Restaurant Market*
Research by the Company RBC Market Research

FINANCE & LOANS
Leasing Market in Russia
Research by the Rating Agency RAEX (Expert RA)

Review of the Russian Turkey Market

Research by the Company Global Reach Consulting

The Russian turkey breeding industry continues to rapidly develop, and investments in turkey production attract large-scale agribusiness. Growth in demand for turkey meat occurs against the backdrop of rising prices for red meat. Reasons for such a sharp increase in demand include an active marketing strategy by producers involving establishing a reasonable price for consumers combined with growth in popularity of turkey due to its health benefits and obvious advantages over other meat varieties (dietetic, lean, healthy nutrient content, cholesterol content much lower than in other types of meat).
Due to the crisis and the decline in real household incomes consumption is dropping. However, the crisis was beneficial for categories less traditional for Russia: production of turkey in 2016 increased by over one third. According to analysts at Global Reach Consulting (GRC), in 2016 the volume of turkey production amounted to around 220 thousand tons in carcass weight, which is 38.3% higher than the figure of 2015. During the first 4 months of 2017, growth equaled 55.5% to the figure of the similar period of 2016.
During the past 10 years, volumes of turkey meat production in household plots have been remaining at virtually the same level, whereas output on the industrial scale keeps increasing. The commercial poultry number has been growing year to year in agricultural organisations of the Russian Federation. Back in 2006, according to calculations by GRC, the number equaled 845 thousand. In 2016 the number of turkeys in agricultural organisations was estimated at almost 9 million, which is 40.5% higher than a year earlier.
Apart from the increasing production capacity, the main trend of the recent years has been active growth in production of convenience goods from turkey meat and expansion of the current range. Production of a larger number of goods is a successful strategy production growth occurs not only due to volumes, but mainly due to new product types being introduced to the market. Most turkey producers confirmed having adopted and started producing new types of goods and cutting methods, including products of deep processing.
The largest company for raising turkey in the Russian Federation up until and including 2015 had been Eurodon (Rostov region). By 2016 the company has taken the second place in the all-Russian rating, the current leader being Damate Group (Penza). The three leaders also included Bashkirsky Ptitsevodchesky Kompleks im. M. Gafuri (Bashkirian Poultry Breeding Facility named after M. Gafuri LLC.
In 2017 the situation in the market changed, and so did the alignment of forces among market players. Damate Group retained its leadership PenzaMolInvest, part of the Group, was first with the share of 18.1%. The second place in 2017, however, went to Tambovskaya Indeyka (Tambov Turkey) LLC. The project was implemented by Cherkizovo Group together with the Spanish Grupo Fuertes. In autumn 2015 the company already put poultry fattening and rearing sites into operation. Full output capacity was planned for 2017. At the first stage the company will be producing 2530 thousand tons of meat per year. In the long term an increase up to 50 thousand tons per year is expected.
In 2017 a large player, Agrofirma (Agricultural Firm) Gertsevskaya LLC left the Russian turkey market. The company was declared bankrupt by a court decision. Upravlayushchaya Kompaniya (Management Company) Regioninvest LLC won a tender for over 121 thousand turkey poults at the starting price of over 20 million rubles. Before this, property of Gertsevskaya Agricultural Firm had been put on auction twice, but was not sold due to a lack of offers on both the first occasion and the second time, when the price was lowered. It should be noted that the market dissolution by Gertsevskaya agricultural firm did not affect the overall market dynamics in any way.
Turkey meat imports have not been having any certain effect on the Russian market. In 2016 the volume of imports of said product declined by 40.7% and amounted to as low as 3.4 thousand tons valued at $ 5.1 million (the decrease in monetary terms equaled 60.2%). In JanuaryApril 2017 imports of turkey meat amounted to only 1 thousand tons valued at $ 2.2 million (this is less than 1% of the overall market volume). In 20162017 only frozen turkey parts (100% of imports) were supplied to Russia. No supplies of chilled meat and whole carcasses were taking place. Until 2014 the leader in supplies of this product type was Turkey. In 2015 supplies from this country dropped by more than 60%. Imports currently occur from Brazil as well as from Chile.
However, speaking of incubation eggs and turkey poults for rearing, as before Russia is almost fully dependent on imported materials, around 80% of which were provided by France and Canada in JanuaryApril 2017. The leader in incubation turkey eggs supplies to Russia in 2017 was the Dutch company Hendrix Genetics, which has a representative office in France (Hendrix Genetics Turkeys France S.A.S). "Hendrix Genetics" is planning to build an incubator for turkey egg and poult production in Russia. The production capacity of the new poultry breeding facility may reach 6.5 million incubation turkey eggs and 6070 thousand turkey poults. For now, the company has specified neither the region where the facility will be established, nor the volume of investments in the construction. According to estimations by market participants, the site may provide products enough for a factory with capacity of 50 thousand tons of turkey meat per year.
In the coming years, an increase in the available market resources is expected, which is primarily connected to ongoing growth in domestic production. It should be noted that in the conditions of rapid saturation of the Russian market, developing exports is important. Today export supplies are being performed by many major companies for instance, the following companies are supplying their products to Ukraine: Eurodon, Ptitsefabrika (Poultry Plant) Zadonskaya CJSC (Lipetsk region), Krasnobor CJSC (Tula region) and Tambovskaya Indeyka. BPK im. Gafuri exports its produce to Vietnam. Damate was among the first companies to start exporting turkey in 2015, currently exports products to Asia, Africa, EU and the Arab Emirates.

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





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