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№6/2018


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DRINKS
Review of the Russian Beer Market
Research by the Company “Laboratoriya Trendov”
TEA & COFFEE
Review of the Russian Coffee Market
Research by the Company “Step by Step”
Review of the Russian Tea Market
Research by the Company “Step by Step”
CONFECTIONERY
Review of the Russian Confectionery Market
Research by the Confectionery Market Research Center (CMRC)
MEAT
Review of the Russian Market for Sausages
Research by the Company “NeoAnalytics”
Review of the Russian Meat Market
Research by “Credinform” Information Agency
DAIRY PRODUCTS
Review of the Russian Market for Drinkable Dairy Products
Research by the Company “Euromonitor International”
FAST FOOD
Review of the Russian Market for Nuts and Dried Fruit
Research by the Company “IndexBox”
INGREDIENTS
Review of the Russian Malt Market
Research by the Company “ID Marketing”
FRUIT & VEGETABlES
Specifics of Branding in the Russian Vegetable Market
Research by the Branding Company “Labelmen”
TRADE SHOWS
27th International “WorldFood Moscow” Exhibition
23rd International Exhibition “Agroprodmash-2018”
FOODSERVICE
Review of the Russian Market for Coffee Shops and Dessert Cafés
Research by the Company “RBC Market Research”


Review of the Russian Market for Sausages

Research by the Company “NeoAnalytics”
GENERAL MARKET TRENDS
The Russian market for sausage products is highly susceptible to external macroeconomic factors. The period of 2014–2016 was quite unsettling to Russian sausage producers. Due to rapid ruble devaluation and the counter-sanctions imposed by Russia (namely, the food embargo), the local market for meat and sausages faced the problem of raw material supply at the time. Domestic companies were unable to increase their meat output quickly in order to substitute imports. This was particularly relevant for beef production. Currency exchange fluctuations resulted in prices for imported beef rising dramatically.
Ingredients for sausage production, including food additives, became considerably more expensive. This was due to the fact that most ingredients were supplied from abroad, prices for them being dependent on and following currency fluctuations.
As a result, raw material costs rocketed by 50–55%, whereas prices for sausages jumped by 20–25%. Manufacturers did not manage to increase their prices for sausage products proportionally to the raw material price shock, as they were, and still are, experiencing pressure from federal retail chains, which demand products within the low-price segment.
In 2017, the volume of sausage output in Russia amounted to 2.458 million tonnes, having increased by 2.1% over the year. In 2018, the volume of domestic output in physical terms increased by 0.1%, amounting to 2.460 million tonnes.
Stuffed sausage products are leading (63.8%) in the output structure in volume terms, said category including cooked sausages, wieners, and small sausages.
According to preliminary estimates, the volume of imports in physical terms in 2018 will equal 39 thousand tonnes (2.4% growth). Belarus is Russia’s major sausage supplier: it accounts for 97.6 and 96.7% in the imports structure in volume and value terms respectively. It should be noted that imports occupy a small share in the structure of the sausage market in Russia: in 2017, it equaled 1.5%.
The volume of sausage imports in physical terms will amount to 32 thousand tonnes in 2018—a decline by 1.2% during the year. Kazakhstan is one of the main purchasers of Russian sausages; its share makes up 72.4 and 78.6% in Russia’s exports in monetary and physical terms respectively.
More than 2 thousand sausage manufacturers are registered in the Russian market. The leaders of the Russian market include “Gruppa “Cherkizovo” PJSC; “Ostankinsky Myasopererabatyvayushchiy Zavod (Ostankino Meat Processing Plant)” OJSC; “Velikoluksky Myasokombinat (Velikie Luki Meat Processing Plant)” OJSC (“Velikoluksky Agropromyshlenny Holding (Velikie Luki Agroindustrial Holding)”); “Mikoyanovsky Myasokombinat” CJSC; and “MPK (Meat Processing Plant) “Atyashevsky” LLC (“Talina” Group).
The Russian sausage market is characterized by high levels of competition and each region of the country having its own leaders.

MARKET STRUCTURE
Sausages are processed food products made from meat, bacon, minced meat or offal.
In terms of preparation methods, sausages can be cooked, cooked and smoked, semi-smoked, or dry-cured. Among the product categories, the largest share in the market structure is occupied by cooked sausages: in 2018 they accounted for the share of 37% in physical terms.
One of the important features of the Russian market for sausage products is the fact that it is, in essence, the domestic producer’s market, aimed at the domestic consumer. The share of imports in it is as low as 2% in physical terms, and exports in volume terms are around the same level as imports. Sausages produced within the country are almost completely consumed locally.

SAUSAGE PRODUCTION
In 2017, 2.458 million tonnes of sausages were produced in Russia, having demonstrated annual growth of 2%. The volume of domestic output in physical terms increased insignificantly in 2018, amounting to 2.460 million tonnes.
The macroeconomic crisis had an impact on market dynamics, and, in particular, in 2015, the volume of domestic sausage output in Russia declined by 3.8% in physical terms. In 2016, production fell by 1.3%. In the past year, the situation improved and a positive trend started. In 2018, domestic production retained positive dynamics.
The Central Federal District is leading in the market and occupies the share of 41% in physical terms in it. Historically, this fact can be explained by the high concentration of major meat-processing facilities and the presence of a decent raw material base in said federal district.
The Volga Federal District ranks second, accounting for the share of 21.1%. The Siberian and Northwestern Federal Districts are on the third and fourth places, making up the shares of 11 and 11.3% respectively in the market.
In terms of revenue, the market leaders are as follows: “Cherkizovo”; “Ostankinsky Myasopererabatyvayushchiy Zavod”’ “Velikoluksky Myasokombinat”; “Mikoyanovsky Myasokombinat”; and “Atyashevsky”.
Competition is intense in the market, although it mostly takes place among major players. Small and medium-sized companies have their own markets, and their advantages compared with large enterprises include being more flexible, allowing them to adapt to changeable market conditions.

IMPORTS
In 2015, a rapid drop in sausage imports in physical terms could be observed: The volume of goods imported plummeted by 42.8% compared with the indicator for the previous year. Afterwards, imports increased: in 2017, they reached 38.1 thousand tonnes, having grown by 6.1% over the year. According to forecasts, the volume of imports in physical terms will increase by 2.4% in 2018 against the indicator in 2017, reaching 39 thousand tonnes.
The main country importing Russian sausages in 2017 was Belarus, having accounted for 97.6 and 96.7% of supplies in volume and value terms respectively.

EXPORTS
In 2017, sausage exports from Russia amounted to 32.4 thousand tonnes, having declined by 0.3% over the year. In 2018, the volumes of exports dropped further: preliminary data indicate that supplies in physical terms will decrease by 1.2% compared with the indicator for 2017 and will equal 32 thousand tonnes.
The main country exporting sausages to Russia in 2017 was Kazakhstan, its shares equaling 78.6 and 72.4% of supplies in volume and value terms respectively. Among other sausage exporters, Ukraine, Abkhazia, Azerbaijan, and Belarus are to be highlighted.

TRENDS AND DEVELOPMENT PROSPECTS
In the period from 2018 to 2020, no fundamental shifts are expected in the Russian market for sausage products. All in all, the market has adapted to the new conditions since the events of 2014–2016, and has switched to a new stage in development. In particular, the past 2–3 years have involved a number of serious shifts in the industry, which were connected with economic factors: the food embargo, ruble devaluation, higher prices for imported raw materials, problems having to do with loan servicing, and other issues. Market withdrawal was common among small and medium-sized players.
Dynamics expected in the market are largely positive, as sausages are among goods attracting sufficient consumer demand.
Throughout the period from 2018 to 2020, the market for sausages in Russia will be growing due to such factors as increasing effective demand, the emergence of new sausage varieties in the market, and active advertising campaigns by manufacturers.

Olga Lutseva-Er,
General Director
Research Company “NeoAnalytics”
MSc in Social Management

Яндекс.Метрика