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Review of the Russian Market of Fruit Preserves

Research by the Company I-Marketing
In 2016, the Russian market of fruit preserves (various jellies, marmalades, jams etc.) increased by 3% compared to 2015. Growth was recorded in both imports and domestic production.
Imports of jam products into Russia is registered under the code TN VED 2007, said code including a wide variety of products, namely finished jam products for retail sales, fruit preserves for the confectionery (dairy, bakery) industry, fruit purees and concentrates for juice, nectar and jam production, and baby food.
The largest share of imports in physical terms falls on fruit purees for jam production in 2016 their share amounted to 58%, whereas in the first quarter of 2017 it reached 76%. The shares of other segments are significantly lower. For instances, purees for juice and nectar production accounted for 18% in volume terms in 2016, whereas in the first quarter of 2017 said indication equalled 15%. The share of baby food in the periods in question amounted to 15 6% respectively.
Let us look into imports of fruit concentrates for jam production as well as imports of finished products for retail sales.
In 2016, 3.37 thousand tons of jams for retail sale total were imported into Russia, the produce valued at $ 6 million. During the first quarter of 2017, imports almost reached 0.5 thousand tons, which is slightly lower than the level of the first quarter of 2016 (0.6 thousand tons). In value terms, the volume of imports in the first quarter of 2017 reached $ 1 million, which is also lower than the indicator for the similar period of the previous year ($ 1.3 million). The average price for imported concentrates equalled $ 1.8 per kilogram in 2016, whereas in the first quarter of 2017 it reached $ 2.15 per kilogram.
The key countries supplying jams for retail trade to Russia are: Austria (380 tons in 2016 and 126 tons in the first quarter of 2017), France (440 tons and 108 tons respectively), Azerbaijan (115 tons and 80 tons), and Germany (933 tons and 27 tons). Austria accounted for 9% of jam supplies in 2016, whereas in the first quarter of 2017 the indicator equalled 26%. France occupied the shares of 10 and 22% respectively; 3 and 17% respectively belonged to Azerbaijan; 22 and 5% respectively were occupied by Germany.
In monetary terms, Austria is leading in 2016 the country supplied products valued at $ 862 thousand total (12% of the total volume of imports), while in the first quarter of 2017 it imported $ 292 thousand (28%). It is followed by France, which supplied jams valued at $ 1.227 thousand (16%) and $ 277 thousand (27%) total respectively, as well as Azerbaijan with the volumes of $ 130 thousand (2%) and $ 147 thousand (14%) respectively.
Among the leading jam suppliers one can highlight A.Darbo AG, St.Dalfour et Cie S.A.S., Qafqaz Konserv Zavodu, Zuegg Deutschland GmbH, Hafi Hallands Fruktindustri AB and Hafi Hallands Fruktindustri AB.
The Austrian A.Darbo AG supplies strawberry, wild lingonberry, apricot and other jam varieties to Russia. Supplies of this company in 2016 amounted to 380 tons valued at $ 862 thousand, whereas in the first quarter of 2017 the company supplied 126 tons valued at $ 292 thousand.
The French St.Dalfour et Cie S.A.S. supplies apricot and peach jams, fruit and berry mixes as well as fig jams to Russia. The volume of imports by this company amounted to 216 tons valued at $ 532 thousand in 2016 and 72 tons valued at $ 175 thousand in the first quarter of 2017.
Azerbaijani company Qafqaz Konserv Zavodu imports jams made from walnuts and white cherry jams under the trademarks Bizim Tarla and Kuban Produkt. This companys volume of imports reached 56 tons valued at $ 84 thousand in 2016 and 70 tons valued at $ 130 thousand in the first quarter of 2017.
Imports of concentrated fruit purees for processing amounted to 38.3 thousand tons valued at $ 36.2 million in 2016. During the first quarter of 2017 this indicator almost reached 16 thousand tons valued at $ 14.4 million total.
The key countries supplying fruit concentrates to Russia are Chile, South Africa, Ecuador and Greece. The following companies should be highlighted among the leading importers: Almme S.A. (Greece); Futurcorp S.A. (Ecuador); Empresas Carozzi S.A., Aconcagua Foods S.A. (Chile); Ceres Fruit Processors (PTY) Ltd and Rhodes Food Group (PTY) Ltd. (South Africa). The most popular fruit puree varieties imported into Russia are apricot, peach, pear and plum concentrates.
During the period from 2010 to 2016 domestic production of jams and jellies was growing by 8% per year on average. In 2016 production reached the level of 161.8 thousand tons (+2% to 2015). In the first quarter of 2017, the volume of jam production reached 19.5 thousand tons (+6% to the similar period of the previous year).
It is obvious that further development of the Russian fruit preserve market will be determined by both demand among the population and demand among food producers (bakery, confectionery and dairy products) naturally, development of the latter also depends on demand among the population. Food production is steadily growing in 20152016, growth equalled +2%. During the first 8 months of 2017, positive growth remained, even though its rate decreased.
In terms of B2 demand, the following market features can be distinguished:
* distinct seasonality in jam consumption, with weather conditions correcting the overall picture;
* the share of homemade preserves expected to continue declining in the overall consumption volume;
* jams most often used as an additive to porridges, cereals and other meals as well as in bakery rather than as a separate product;
* the rate of decline in disposable household incomes has slowed down during the time first 9 months of 2017 the decline during the period in question equalled -1.2% to the similar period of the previous year, whereas in 2016 said indicator equalled -5.9%, and in 2015 -3.2%. At the same time, the rate of decline in food retail trade slowed down in both physical and monetary terms.

Nikita Fedyushin,
Analyst I-Marketing,

Aleksey Sirotov
Analyst I-Marketing