Assessment and measurement of the key indicators for Russian output as well as quantitative characteristics of the market for flour confections have been carried out based on official statistical data on the main categories of the products studied, namely:
* flour confectionery products and cakes with a short shelf life;
* gingerbreads and similar products, sweet cookies, and waffles.
The volume of flour confectionery output in 2017 amounted to 1,850 thousand tonnes (+5.7% to the indicator for 2016). During the first months of 2018, growth was observed in production of flour confections with a long shelf life.
The largest share in the volume of Russian flour confectionery production is occupied by the segment of gingerbreads and similar products, sweet cookies, and waggles, having equaled 80% in 2017. The remaining 20% share fell on flour confections and cakes with a short shelf life.
The main factors having an influence on prices for the products analyzed are as follows:
* the costs of the main ingredients used in production (mainly flour and sugar);
* production technologies;
* production costs;
* the number of intermediaries;
* transportation costs.
In addition, price formation is affected by:
* the social and economic situation in the country;
* harvest of grains used for flour production;
* popularity and reputation of a given trademark/brand;
* the type of consumer packaging as well as materials for its production.
Let us examine the dynamics of average retail prices for the main varieties of flour confectionery products. According to statistics available, in 2013–2017 annual growth in prices for all products studied was occurring, although growth rates were slowing down starting with 2016. In 2017, the rates of growth in prices for cookies and gingerbreads were almost even: 3% (to 148 rubles per kilogram) for gingerbreads, and 4% (to 127 rubles) for cookies. Highest growth in prices for both products took place in 2015 and ranged between 18 and 20%.
The segment of cupcakes, rolls and cakes has been demonstrating similar dynamics, involving annual price growth across all product types analyzed from 2013 to 2017, with decreasing growth rates since 2016. In 2017, said price growth rate was virtually even: 5% (to 242 rubles per kilogram) for cupcakes and rolls, and 3% (to 431 rubles) for cakes. Highest growth in prices fell on 2015 and ranged between 15 and 16%.
Let us focus on the average prices for the main types of flour confections in Russia in January–April 2018.
Prices for flour confections studied were highest in the Far Eastern Federal District and were as follows: 192 rubles per kilogram of cookies; 174 rubles per kilogram of gingerbreads; 531 rubles per kilogram of cakes; and 295 rubles per kilogram of cupcakes and rolls.
The lowest price for cookies was recorded in the Volga Federal District and equaled 126 rubles per kilogram, whereas the lowest prices for gingerbreads, cakes, as well as cupcakes and rolls were found in the North Caucasian Federal District (101, 365, and 194 rubles per kilogram respectively).
It should be noted that all price segments include flour confections produced domestically and abroad. Imported products are typically concentrated in the premium price segment.
Exports of domestic products in the “bread, cakes and cookies” group from Russia during the period from 2015 to January–October 2018 amounted to 751 thousand tonnes valued at $ 1.24 billion. The following categories were mainly exported: “other bread and flour confectionery products” and “sweet dry cookies”, occupying 37 and 30% respectively in supplies. Kazakhstan ranked first in the structure of exports in the “bread, cakes and cookies” category, taking up the share of 33%, whereas Belarus was second and accounted for 20% in supplies.
Imports of products in the “bread, cakes and cookies” group into Russia during the period from 2015 to January–October 2018 equaled 450 thousand tonnes valued at $ 1.12 billion. “Other bread and flour confectionery products” and “sweet dry cookies” were mainly imported (66 and 17% respectively). In the structure of imports within the “bread, cakes and cookies” group by country, the two leading countries were Poland and Germany, accounting for the shares of 23 and 20% respectively in supplies.
It should be noted that the monetary difference between exports and imports is fairly small. Moreover, in January–October 2018, imports even exceeded exports by $ 15 million. In physical terms, however, exports prevailed against imports.
Consumer preferences in terms of brands and producers may be based on such aspects as:
* product quality;
* experience of consumption of a given brand;
* recommendations by friends and acquaintances;
* popularity and reputation of a producer company;
* bright packaging attracting attention;
* discounts and promos on products of a given brand;
* consumer incomes;
* availability at nearest stores;
* packaging type;
* product composition;
* calorie content;
* country of origin;
* socio-demographic characteristics of consumers (sex, age, status, lifestyle and others).
According to official statistics, volumes of flour confectionery production in Russia have been on a regular increase. At the moment, analysts see no preconditions for changes in said dynamics.
Prices for flour confections have been growing as well, which is connected with inflation on the one hand and with an overall trend for increasing raw material and production costs for this product type on the other hand.
Public Relations Specialist
“Step by Step” Group