Development Prospects of the Wine Industry in Russia
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Review of the Russian Market for Starch Products
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Review of the Russian Coffee Market

Research by the Company Step by Step
Since 2012, the volume of Russian output of natural roasted coffee and decaffeinated coffee has been demonstrating positive dynamics it was only in 2014 when a slight decline was recorded. In JanuaryNovember 2017, coffee production amounted to 38,785 tons. According to preliminary forecasts, 39,589 tons of coffee are expected to have been produced by the end of 2017.
Positive dynamics have also been demonstrated by production in the category of instant coffee. In 20132015, indicators for said product were stable, and slight growth was observed. In 2016, the volumes of instant coffee output were increasing. The data for JanuaryNovember 2017 indicate ongoing growth according to preliminary calculations, 88,604 tons of instant coffee were produced in 2017.
The state statistical offices provide statistics for average consumer prices in a number of categories which are monitored. In the segment of coffee, these are as follows:
* natural coffee beans and ground coffee
* natural instant coffee
* coffee in catering establishments (caf?s, restaurants etc.).
The last category is of interest to analysts, as it indicates changes in prices for the final hot product in fast food outlets.
The comparison of average consumer prices across federal districts reveals that the Far Eastern Federal District is leading in two categories out of three, demonstrating the highest prices in them. Natural coffee beans and ground coffee are sold at 1,410.8 rubles per kilogram in the Far Eastern Federal District, whereas natural instant coffee costs 2,767.41 rubles per kilogram on average. The highest average price for coffee in catering establishments was recorded in the Ural Federal District, amounting to 90.54 rubles per 200 grams.
Regarding the lowest prices, the Siberian Federal District is the leader in the categories of coffee in catering establishments and natural instant coffee with the average prices of 45.17 rubles per 200 grams and 2,136.5 rubles per kilogram respectively. The Southern Federal District demonstrated the lowest average price for natural coffee beans and ground coffee 898.51 rubles per kilogram.
In 2016, average consumer prices in the Russian Federation were growing in all categories in question. In 2017, the category of natural coffee beans and ground coffee was stagnating, whereas the other two categories demonstrated a slight increase. During the 2 years, the price for natural coffee beans and ground coffee grew by 86.22 rubles per kilogram, reaching 1,004.64 rubles. The maximum value in this category 1,011.22 rubles per kilogram was recorded in January 2017. However, rapid growth was only observed in 2016, when from January to December the price was increasing and reached 84.2 rubles (+9%). In 2015, growth was negative, and the ratio of Decembers indicator to January equalled -0.6%.
Prices for natural instant coffee were initially higher than prices in the category of coffee beans and ground coffee. In January 2016, the former equalled 2,091.25 rubles per kilogram. Throughout the period from January to December 2016, the price increased by 244.5 rubles (+11.7%), whereas in 2017 the price growth was significantly lower 36.3 rubles (+1.5% during the period from January to December).
The category of coffee in catering establishments has been relatively stable in comparison with the other two segments. During the 2 years, the price has only increased by 3.85 rubles per 200 grams, reaching 68.66 rubles by the end of 2017. All in all, catering companies have been trying to restrain prices for coffee drinks.
Imported goods are supplied to the Russian market in the following categories: roasted coffee with caffeine and non-roasted coffee with caffeine.
The situation in terms of imports of roasted coffee was remaining stable throughout the time period analysed. Year to year, a slight increase in volumes of supplies took place. In JanuaryNovember 2017, imports of roasted coffee amounted to 21 thousand tons. Exports of roasted coffee, on the contrary, declined: whereas in 2014 they amounted to 8,110 tons, in 2015 supplies dropped to 5,110 tons no further growth followed. All in all, the volume of imports within the category is approximately 4 times higher than the volume of exports.
A different picture can be observed in the category of non-roasted coffee. In 2013, 26 thousand tons of this product type were supplied to Russia, whereas in 2014 imports increased by 109 thousand tons, reaching 135 thousand tons. Such rapid growth may be explained by increased demand for products in the category among processors and packers. Following the jump, the volumes of supplies continued to demonstrate growth during the period from January to November 2017, 145 thousand tons of coffee were imported.
Exports of non-roasted coffee have been highly unstable: a drop to 150 tons took place in 2014, whereas in 2015 the volume increased to 311 tons; in 2016 there was a decline to 218 tons, and November 2017 demonstrated growth to 334 tons. Imports in this category are many times higher than exports.
To sum up, Russias production and processing of coffee beans have been developing at low rates; manufacturers present in the market have not been increasing output volumes or imports into Russia. In comparison, production of instant coffee may demonstrate slight growth, and so may imports and exports. Growth in the total volume of retail sales in monetary terms and growth in prices are primarily caused by inflation and increased costs of raw materials, logistics and other business components, rather than increased product volumes.

Anastasia Godovalnikova,
Public Relations Specialist
Step by Step Group