Russian food market research

It’s becoming harder for Russian producers to compete with Poland

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During the recent week the sales of domestic apples of  green varieties has substantially declined. In winter the demand for them is much smaller than for red varieties of fruit. The reason for this was the influx of Polish imports, which come to the Russian market in large quantities, and they are mainly red varieties.

To date, the maximum cost of a kilogram of green apples grown in Russia is about 22 rubles. However, a significant portion of transactions are performed at 15-20 rubles per kilogram. The value of Polish fruit at this time is fixed at 24-25 rubles for the same weight.

The situation is more favorable with the sales of domestic apple of red varieties in the range of 22-27 rubles per kilogram. However, Russian manufacturers believe that if in the near future the pressure from Poland will not decrease, Russian suppliers will be forced to significantly reduce the prices.

Source: www.fruitnews.info

Many of Russian State Standards will be replaced with WTO-regulations

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From 2013, due to the entry of Russia  into the WTO and its inclusion into the Customs Union, a technical regulation is getting into force in Russia, which establishes mandatory requirements for many types of products.

Thus, in June technical regulations of the Customs Union will be issued, on food safety, its labeling and other aspects of the production, processing and marketing.

In Russia, many qualitative indices of fruit and vegetable products are fixed in state standards, which from summer 2013 will become the evidence base for adopted technical regulations.

Source: www.fruitnews.ru

Apple export from Belgium to Russia decreases frightfully

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According to statistical data of the Russian federation, Belgium exported 2,800 tons of apples to Russia during the period July to November 2012. That was 37% less than the previous season in this period. The share of the Belgian apple export decreases steadily. This is the result of Russia importing more from other countries. In season 2005/06 Belgium was the fourth biggest apple exporter to Russia with a share of 7%. In the season 2011/12 the country was only number fourteen and the share in the total apple import in Russia was only 1.3%. At the same time it must be mentioned, that the Belgian apple export may still get a place this winter and that volumes will still increase during the remainder of the season.

Source: www.freshplaza.com

Logistics key to retail expansion

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Thanks to relative political stability and strong oil and gas prices, Russia’s retail turnover more than quintupled from 2001 to 2011 and now exceeds US$600 billion annually. Data suggest that this sector is entering the steepest part of its growth curve. How will Russia’s retailers face the challenges of this critical period of expansion? Will foreign retailers manage to get a slice of this growing pie?

Russia’s enormous size and level of economic development mean that the retail market is currently divided among many players. While large retail chains dwarf the majority of competitors in market capitalization, their market share is relatively small. The X5 Retail Group, the largest food retailer, for example, controls only 5.6% of the market, and the top 10 food retailers comprise less than 20% of the market. This is in stark contrast to the developed markets of Western Europe, where leading food retailers hold a quarter of the market or more e.g., Tesco (30% market share) in the U.K. and Edeka (26% market share) in Germany.

This opportunity for consolidation is fueling a pitched battle among Russia’s retail chains to establish regional and national market share. Which chain prevails as top dog will depend on how well it can confront the logistical challenges of the country’s decaying infrastructure, responsibly manage expansion and successfully navigate an uncertain regulatory environment.

Russia’s road network stands at 610,000 miles, of which only 482,000 miles are paved. (In comparison, the U.S. has four million miles of roads, of which 2.7 million are paved.)

In addition, there is a lack of quality warehousing in the country. Colliers International reported that there are 81 million square feet of industrial space in all of Russia, while the Chicago market alone houses 537 million square feet, according to real estate service firm Newmark.

All the leaders in Russia’s retail sphere are rapidly modernizing their logistical operations. Retail chain Magnit is currently recognized as the cutting-edge logistics innovator. As a result, it is rapidly closing in on X5’s lead as Russia’s largest retailer in terms of revenues. Its profits more than doubled in the first half of 2012 compared to the previous year, while X5’s profits over the same period dropped 20.6%. X5 appears to be playing catch-up in logistics. During this period, its margins were hit by the high costs of opening a new distribution center and the set-up costs related to adopting a direct-import model.

Magnit’s main advantage over its competitors has been its effectiveness in bringing the supply chain completely in-house and cutting out the middle men who previously added costs and delays. Today, Magnit runs a fully independent supply chain, with over 3,900 of its own vehicles and a proprietary network of 15 distribution centers totaling close to 3.9 million square feet. It continues to expand this network, opening a new facility in late December 2012 to serve the Volga region and Ural region.

The Russian retail market is heavily saturated, and barriers to entry are high. The two foreign chains that have found success have one thing in common: They struck when the iron was hot. German retailer Metro and the French chain Auchan entered the Russian market in the early 2000s, before competitors became well-established. Of the top-10 leading food retailers, Metro and Auchan have been the only non-Russian firms to command a leading position in the retail sector.

Walmart is looking at a second attempt to access this market, having recently hired former X5 CEO Lev Khasis and appointing him senior vice president for international operations. Khasis was key in positioning X5 as the Russian market leader and grew the company to annual revenues of US$15 billion. He will likely be the strategic player for Walmart’s eventual entrance into the sector.

Source: www.freshplaza.com

Poland has become the largest exporter of apples this season

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According to the report of experts of the USDA and the U.S. Foreign Agricultural Service, by the results of this year, Poland has become a major supplier of apples in Western and Eastern Europe.

Industry experts believe that the Polish growers will produce about 2.9 million tons of fruit this season, which is 14% more than in the previous period. And the deliveries from Poland to the members of EU make 26% of all apple import of these countries.
The main “oriental” consumers of Polish fruit remain Russia (imports about 55% of total production), Ukraine, Belarus and Kazakhstan. And in the EU the import leaders are the Czech Republic and Germany.

Source: www.fruitnews.ru

Decline in pear imports and production

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According to the industry experts, approximately 120 thousand tons of pears have been exported to Russia in the current season. The Russian Federal State Statistics Service (Rosstat), says this shows a decrease of 13% compared to last year.

The main importers of pears into the country remain Poland, the Netherlands and Belgium. It should be recalled that, in 2012, the fruit production was reduced by one third on average in these countries, thus, the decrease in supply to Russia is quite natural.

The production of pears in Russia itself is decreasing. According to the information provided by the Foreign Agricultural Service (FAS) of the United States, the fruit harvest in the country was only 110 000 tons – 21 percent less than last year.

Source: www.freshplaza.com

Russia increases the import of Azerbaijani apples

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According to official data provided by experts from Russian Statistics, since the beginning of the current season about 43 thousand tons of apples from Azerbaijan has been  supplied to Russia. This is 41% more than last year.

U.S. Foreign Agricultural Service (FAS) has also published its own study of the issue: according to the American experts, this year Azerbaijan has exported only about 50,000 tons of apples, which equals to last year indices. At the same time, given the increasing consumption of the fruits in the country, the import of apples to Azerbaijan has increased, too – up to 15 thousand tons per year.

Source: www.fruitnews.ru

Poland has become the largest exporter of apples this season

Written by

According to the report of experts of the USDA and the U.S. Foreign Agricultural Service, by the results of this year, Poland has become a major supplier of apples in Western and Eastern Europe.

Industry experts believe that the Polish growers will produce about 2.9 million tons of fruit this season, which is 14% more than in the previous period. And the deliveries from Poland to the members of EU make 26% of all apple import of these countries.
The main “oriental” consumers of Polish fruit remain Russia (imports about 55% of total production), Ukraine, Belarus and Kazakhstan. And in the EU the import leaders are the Czech Republic and Germany.

Source: www.fruitnews.ru

Kabardian gardeners are planning to fill up the Russian shelves with domestic apples

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Gardeners in Kabardino-Balkaria decided to deal seriously with the dominance of foreign apples in Russia. By the most humble data, the share of imported fruit at present is about 80%.

According to the experience of farmers of the southern republic, the cost of setting up, and growing gardens on one hectare of land is approximately 1.5 million rubles, and the harvest from this area brings 50-80 tons of fruit. It is sufficient to pay for all the investments in the second year.

Let us recall that in the last four years, there has been laid about a thousand acres of apple trees in Kabardino-Balkaria, from which growers have collected 72,000 tons of fruit. Harvest of this size completely satisfies the needs of the republic. But in the future farmers plan to increase the area of gardens to 20 hectares and to enter the markets of the neighboring regions of Russia.

Source: www.fruitnews.ru

In October, Russia increased production of apple concentrate

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Market statistics of apple concentrate in Russia show that production increased nearly 1.6 times as compared to October 2011. The total amount of manufactured products has totaled in 16,000 tons.

This result was predictable in the early summer, as in the period from July to October inclusive, production increased 1.5 times and reached the level of 55 000 tons.
Let us recall that only 36,000 tons were produced during July-October last year.

Source: www.fruitnews.ru