Fresh Foods Russia 2012: Results

The 3d Business Forum – Fresh Foods Russia 2012: Fresh products and ready-to-eat food  in modern retail networks – was held at Borodino hotel on 22-23d of November.

Fresh Foods Russia is the only business event in the country, bringing up to light the questions of quality and assortment of fresh products, purchase and storage, organizing of in-house manufacture, and also fresh and ultrafresh products as the main weapon in networks’ competition for the buyer.
More that 250 participants from 50 different cities and countries, including Ukraine, Belorussia, Moldavia, Italy, Spain and France discussed how to satisfy the growing demand and requirements of a consumer to the quality of fresh products, how to make the trading space look “tasty”, fresh and effective, how to provide marginality of sales, and make the supply chain steady during season  hesitations, and other up to date issues.
Traditionally, before the opening of the forum, a press-conference was held, on “Russian consumer in search of fresh and eco-products. The readiness of retail networks and producers to deliver quality and safety of fresh products, as well as their certificates”.
In discussion of the general vision of “fresh” and “eco” categories, Alexander Konovalov noted that today the notion of “eco products” is not yet legitimated, and a new law regarding organic agriculture is being developed in the Government. Alexander also added that by the results of 2012 the volumes of “eco” market will compose 100 mln $, only 15% of which is a share of Russian manufacturers.
In the session “Figures and facts” the leading analytic agencies presented their reports about the development of fresh food category. Among the main trends the experts noted an average growth of money which households spend on fresh categories and house brands. Sergey Yashko, vice General Director if GfK Rus, presented the following observations: almost 60% of all expense by the consumer are spent on fresh products; the share of fresh products purchase in traditional trade channel is higher then in contemporary channel: in traditional trade the consumer’s basket is shifted towards such categories as meat/fish and vegetables/fruit, and in contemporary channel – to dairy categories; 27% of all food shopping made by Russian families consist of fresh products exclusively, and the most actively developing is the segment of cooled/fresh fish (+28%). The main contribution to this growth was made by the traditional trade channel (+31%).
The opening of the Forum was a plenary session called “Where to get quality?!”, that took place in the big hall of “Borodino”. Market leaders: Belaya Dacha, Globus Gourmet, RusProdSoyuz, X5 Retail Group, Akort, Ecocluster – raised the problems of qualityof fresh products, and the possible ways of handling them through regulating the market and relations between suppliers and retailers, and development of logistics and systems of storage and manufacturing.
Speaking about quality, Nikolay Vlasov, vice president of RossAgroSurvey, expressed an opinion that the requirements to certification of products on the judicial level should be as light as possible, in order not to break the rules of competition. The networks in their turn should have an ability to certify the production additionally. Unfortunately, as notes Mr.Vlasov, the current  legislation does not imply any responsibility for giving untruthful information in this sphere, which makes the process of fight with unfair market members ever more difficult.
During the first plenary session, the companies shared their plans for the future, in particular, – Belaya Dacha will launch a plant in Saint-Petersburg, and plans to construct a manufacture in Rostov region – informs Victor Semenov, the founder of the company. Globus Gournet network is regarding proposals for opening new shops not just on the territory of Moscow and Saint-Petersburg, but also considers attractive such regions as: Ekaterinburg, Novosibirsk, Rostov-on-Don, Krasnodar and Sochi.
Among the main topics of the two days of the business-forum the delegates pointed out the following sessions: “Perspective technologies in supplies management (takeover, transhipment, quality control and logistics of fresh and ultrafresh; safety management for products); “Sales concepts of ready-to-eat food (Food-to-go bistros and other formats of trade organization inside the trading hall)”; “Fresh is not a mere gift – how to manage the marginality level”; “Staff that makes products tasty for consumers”; “Development of a private manufacture in a shop (system of kitchen-factory work)”.

The second day of the program was opened by the commercial negotiations of supplies between purchase leaders of retail networks and manufacturers in categories “Fruit/vegetables”, “Dairy”, “Meat/fish/poultry”, “Bread and Bakery”, and also between suppliers of equipment and products for private manufacture, and Heads of Self-produced food Departments in retail networks. The participants of negotiations were: Dixi, Spar Central Russia, Metro Cash&Carry, Vernyi, X5 retail Group, Hyper Globus, TZS System, Bakhetle, O’KAY, Myasnov, Titan, Continent of Taste, Food House, Proviant, Partner-Market, Anix, Palace row, Krasnyi Yar, Makarovskyi, Holiday Classic, Smak, Rost, Horizon, Comandor, Slata, Spar Middle Volga, Lentorg, Gulliver, Karavay, Lama, Molniya (SPAR Chelyabinsk), Guarant of Taste, Soyuz, Svetlyachok, Yelisey, KAK RAZ, Taste House, Telex, Radezh, Intertorg (National Family, Idea, Spar), Kulinarium, RegionMart System (Polyana, Chibis), Samberi, Ukrainian Retail, South Central Prod.
A special Surprize for the Forum delegates were business-trainings: how to control oneself, how to control one’s negative feelings, how the mood influences one’s relations and subordinates – these are the skills that the members could learn at the personal growth workshops. Timur Yadgarov , Head of Leadership Board in High School of BBCG and Vyacheslav Frolov, founder and director of “Business theatre” at MAAT studio school, shared their practice and psychological skills of self-presentation, necessary in the hard job of top-managenent.
Fresh Food Russia 2012 Forum was closed with the speech of special guest Tom Wolf, a world-famous food designer and chief cook, one of the most famous food designers in the world, and founder of  London catering company Blue Food Productions, organizing creative fourchets for celebrities and world premieres, such as “Pirates of the Carribean” and “Alice in Wonderland”. Progressive thinking, new solutions for restaurant areas in supermarkets, and a creative approach to food raised acute interest among the retailers. But few members of the market are now ready to implement such brave ideas in Russian retail yet.

Source: www.fruitnews.ru

Dixy Sales Jump 61%

Russian grocery chain Dixy has revealed that its January-August consolidated revenues surged 61.6% year-on-year to 94.2bn roubles (US$3.01bn), boosted by its merger with smaller rival Victoria just over a year ago.

Sales were up 21.6% on a pro-forma basis, including Victoria’s results from the beginning of 2011, Dixy said in a statement.

In August alone, consolidated sales were up 24.6% in rouble terms after a rise of 23.4% in July.

Source: www.kamcity.com

“Dixy” revenue grew up by 89.5% for 6 months of 2012

Total consolidated revenue of “Dixy” (including “Victoria” revenue since the acquisition of 15 June 2011) for 6 months of 2012 increased by 89.5% in rubles (77.1% in U.S. dollars) compared to the same period of the last year and amounted to 70.9 billion rubles ($ 2.3 billion), as the company representatives said.
Total revenue of “Dixy” for 6 months in 2012, based on pro-forma report  (including “Victoria” revenue from the beginning of 2011) grew up by 20.7% in rubles (12.8% in U.S. dollars), compared to the same period of the last year.

“Dixy’s” new marketing strategy is yielding favorable results

The “Dixy” Goup, that belongs to the Igor Kesaev’s “Mercury” Group, has managed to raise the net profit 4.4 times until 554 million rubles during the first half of the year. The company’s revenues have increased 22%, until 37.4 milliard dollars. The gross margin of the “Dixy” Group has grown until 25.1% (contra 23.7 % during the first half of the year 2010), and the EBITDA profitability—until 6.6% (5.8%). On Tuesday “Dixy’s” share quotation on the MICEX has grown about 5%, almost 310 rubles for the paper.

According to the Alfa-bank analysts, the “Dixy’s” investments in logistics and new marketing initiatives are yielding favorable results.

In summer 2010 Danny Perekalsky has become the “Dixy’s” marketing director, and under his command the company has changed its marketing strategy. The quantity of fruit and vegetables in the assortment has grown a lot. Moreover, “Dixy” has changed the salesroom planning, the display of goods, and created a greater variety of products of its own merchandise marks. The retailer is planning to spend about 500 million rubles on renovations during 3 years.

Source: www.fruitnews.ru

Earnings of Dixy Increased by 21.6% tо Rub 31.2 bln

One of the largest food retailers in Russia OAO Dixy reported earnings growth by 21.6% in the first 5 months in 2011 to Rub 31.2 bln. In the financial  year 2010-2011 the company experiences significant rebound after the recession. As per IFRS the company’s earnings have been growing since 2005. After two years of profit growth in 2005-2007, the company suffered from losses during the financial crisis 2008-2009. To date the net profit index is back into the black, but hasn’t reached the pre-crisis level yet.

Source: www.retail.ru

Dixy Group Completed Acquisition of Victoria

Dixy Group closed acquisition deal of Victoria chain with total value Rub 25.6bln, including debt. To finance the deal the company offered 38.75mln shares, each Rub 391 worth, and raised a 4.5bln rubles loan. The major shareholder Merkuriy participated in follow-on offering.

Victoria operates 257 stores in Central and North-Western federal districts, as well as in Kaliningrad region, but only 35 of them will change their name in 2011 (with Rub 1mln investment pro each store). The significant part of integration expenses will fall on 2012. The expected earnings in 2011 will amount to Rub 34bln. The consolidated turnover of Dixy Group will reach approximately Rub 115bln.

Source: www.retail.ru

Dixy Buys Victoria

Russian food retailer Dixy said it will acquire rival Victoria Group in a cash and share deal worth 25.6 billion roubles to become the nation’s third largest retailer by revenue and shops. Victoria’s shareholders will become minority shareholders of the new joint company, Dixy will hold the controlling stake – 50% of the shares plus one share. The total amount of transaction is RUB 25.6 bn.

On May, 12 2011 the Federal antimonopoly service of the Russian Federation satisfied a motion for the purchase of 100% shares of Victoria on one condition: Victoria should close all the stores in Serpukhov (a satellite town in the Moscow Region).

Dixy, controlled by tycoon Igor Kesayev via the Mercury Group, is in the midst of a rapid expansion drive to take advantage of strong growth in domestic consumer spending amid a broader economic recovery.

Source: www.retailer.ru, www.reuters.com

Russian Retail Market: Dixy Increased Q1 Profit by 27%

The large Russian food retailer Dixy reported the Q1 net profit growth by 27% up to 164.1m rubles. Net retail sales increased by 21% to 181.1bn rubles; EBITDA grew by 28% to 1bn rubles. The like-for-like sales soared by 7.6%. Dixy is preparing a RUB 25.6bn acquisition deal with Victoria retail chain. The control packet of Dixy shares (63.7%) belongs to the multi-field holding company Merkuriy, owned by Igor Kesayev.

Source: www.retailer.ru

Facts and Figures about Russian Retail Market 2011

2011 the Finnish retail chain Prisma is planning to open a new hypermarket and two supermarkets in St. Petersburg. The premium-class supermarket chain Globus Gourmet will open four stores in Moscow and St. Petersburg, with the investment volume reaching RUB 600m. Russia’s retail market leaders – X5 Retail Group and Magnit – accounted for 80% of all the new stores opened by the largest market players in Q1 2011. Dixy’s net revenues in 2010 amounted to RUB 257.7m. The sales of Lenta, retail chain from St. Petersburg , grew by 35% in Q1 2011.

Source: www.retailer.ru