Russian food market research

Russia considers organic move

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Attracted by opportunities on the EU market, Russian authorities are increasing support for the country’s organic farmers

Russia’s ministry of agriculture is investigating the possibility of becoming a supplier of organic products within the scope of the World Trade Organisation, according to a report from Pravda.

Lawmakers in the country are reportedly working on a bill, due to be handed over to the ministry this month, to support the production of organic agricultural products for the EU market.

They have provided a system of certification of environmentally friendly products, credits, subsidies, insurance and support, with small and medium-sized businesses that provide services to organic producers also receiving state aid.

Organic farmers promised to reduce costs on their products and use Russia’s participation in the WTO to enter the EU market with their products, Pravda reported.

In 2011, the Russian market of organic products was estimated at €46m-€62m, less than 0.1 per cent of all food consumed in the country.

Only 10 per cent of all organic products on the Russian market is produced by domestic farmers, with most coming from Germany.

Fresh Foods Russia 2012: Results

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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

Why is there no Russian products in Russian supermarkets?

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This question was asked at the conference Fresh Food Russia held in November 2012 by a representative of Russian retail, Andrei Yakovlev, CEO of grocery store network Globus Gourmet.
– Where is the domestic producer? I believe that tomatoes from Volgograd are no worse than foreign products. But it’s faster and more effective to get tomatoes from France than from Krasnodar. Or our Azerbaijani partners can deliver tomatoes all year round, but our producers can not somehow, – said Mr. Yakovlev.
The Russian retailer also suggested that the situation can be changed only after the producers seriously will be engaged in the development of supply chains and efficient delivery to supermarkets.
– I understand that we have steep demands, and dispose 20-30% of fresh products at the stage of acceptance. But why do the French and Azerbaijani cope with this, and we can not? – Asked the head of Globus Gourmet at the session.

Source: www.fruitnews.ru

Retail growth slumps

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Russian retail sales growth unexpectedly slumped in October after unemployment increased for the first time since January and slower-than-estimated gains in wages and incomes curbed consumer purchasing power.

Receipts at merchants rose 3.8 per cent from a year earlier, the slowest pace since February 2010, after a 4.4 per cent increase in September, the Federal Statistics Service in Moscow said in an emailed statement on Tuesday.

The economic figures “can be linked to slower growth in incomes, wages and a relatively high level of the inflation rate,” Alexander Morozov, chief economist for Russia at HSBC Holdings Plc in Moscow.

Source: www.freshplaza.com

European growers of apples and pears are worried by competition with Poland

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Almost all European gardeners admit that the biggest competition threat for them comes from Poland, which has an important advantage: low prices for apples and pears. Besides, the harvest of this year exceeds all the previous indices, as well as production volumes in other countries.

The Polish growers do not forget about the quality either, improving it annually. However, the European manufacturers do not despair, as serious competition is a normal state of a healthy market. For example, apples and pears from Holland are very popular in the inner market of the country, as well as in Belgium and in Germany. But the Eastern market is often closed for them because they find it difficult to implement the expensive production among the people with lower income then Europeans’.

Source: www.fruitnews.ru

The biggest Russian dry-cargo port will open in Kuban

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The decision to build a new dry-cargo facility was discussed on Monday, November the 19th, by the Territory Governor Alexander Tkachev and Deputy Minister of Transport of Russia Victor Olersky.

– This project has great political and socio-economic importance for the region’s economy and for the whole country. From our part, we will do everything for this project to be implemented. Of course, the construction will require tens of billions of rubles and infrastructure development, but we hope that the investor and the management company will work hard for the interests of the Kuban. It will create new jobs and increase the tax base, said the Kuban’ official.

The future dry-cargo port of Taman will be the largest project of its kind in Russia. The planned turnover will be about 100 million tons of cargo per year.
– This will be the port of the new philosophy, deep, and it will allow our shippers to literally open up new markets. And that will make our economy more competitive, – said Mr. Olersky.

 

Source: www.fruitnews.ru

Meeting of Rosselkhoznadzor officials and Russian retailers

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November 12, 2012: Rosselkhoznadzor organized a regular meeting dedicated to the “safety of plant products supplied to retail chains” with the representatives of organizations engaged in the sale of plant products.

The meeting was dedicated to discussing ways to improve the safety of plant products supplied to retailers. Among the participants were senior officials of Rosselkhoznadzor, representatives of X5 Retail Group LLC, Real Hypermarket LLC, Metro Cash & Carry LLC, Lenta, Okay, Belaya Dacha Trading JSC, National Agricultural Union.

The representatives of trade organizations acknowledged the need to develop a unified form to accompany the incoming plant products as it moves through Russia and the Customs Union. The meeting agreed on the need of development and short-term harmonization of such document.
The meeting resulted in a protocol on “Security of plant products supplied to retailers”

Source: www.fruitnews.ru

Russia takes on more Valencian citrus

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Exports increased 200 per cent over past three seasons, according to reports in Spain

Citrus exports from the Valencia region of Spain to the Russian market have soared over the past three years, growing by over 200 per cet.

According to Empresa Exterior, shipments to Russia jumped by 203.5 per cent between 2009/10 and 2011/12, with volumes growing to 65,194 tonnes from 21,475 tonnes.

During the three-year period, total citrus exports from Valencia to all markets grew 12.6 per cent, amounting to sales of 2.76m tonnes.

Source: www.fruitnet.com

Why don’t the retailers work directly with suppliers?

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Fruitnews.ru made a reseach why Russian retailers prefer working with dealers and middlemen to dealing directly with suppliers.

Several retailers leading their activities in Russia, organize their work in a way to exclude other companies from the supply chain of fruits and vegetables although this is certainly a real opportunity to get the best prices.  Certain retailers begin to interact directly with the growers, but then return to the established pattern, which includes dealers and middlemen.

There are certain reasons for that. It is the lack of modern storage facilities which has already become common in our country, lack of screening and treatment facilities, and poorly-organized supply chain:

– In cities where the producers have well-organized processes of logistics, training and storage of goods, we work directly with them. But if the grower does not comply with these requirements, we have to buy the product from the distributor, who is able to present the product, calibrate it and supply to supermarkets. For example, an onion grower from Rostov can only produce the product and put it in storage, – says Dmitry Agaltsov the Purchasing Director of the section “Fruits and Vegetables” of the “Lenta” retail chain.

The Divisional manager of the department “New Products” of the “Real – Hypermarket LLC” Christian Look also highlights the complexity of direct cooperation:

“Risk of the quality of the goods carried by the retailer. If a vendor supplies defective goods, the seller will have to spend time and money on sorting out and disposal, writing claims to the supplier. Meanwhile, this item will not appear in stores, so the seller also suffers damages due to reduced turnover. Also the retailer must go through all the procedures for customs clearance of goods, involving additional (and considerable) human resources, which are not always built into the company’s staff.
Then, too large amounts of supplies from manufacturers. Minimum order of goods of one type is, as a rule, not less than 20 tons. Usually, we do not need such a large volume. In addition, according to the quality standards applied in the “Real” chain, fruits and vegetables can not be stored in our warehouse for more than three days”.

Many experts also believe that, despite the willingness and desire of many retailers to pass to direct supplies one day, intermediaries will remain.

The reason is, many manufacturers are working on a prepaid basis, and quotas for shipments are counted in hundreds of tons. There are also air deliveries of exotic fruits and berries from Brazil, China, South Africa and other regions. This is a very expensive and risky way, which is, as retailers forecast, will long remain the responsibility of third parties.

Source: www.fruitnews.ru

Russia is ramping up the production of apple juice concentrate

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According to Rosstat, in the first 9 months of 2012 Russia produced 60.8 thousand tonnes of apple juice concentrate, which is 28% higher than the same period of last year when only 47.2 thousand tons were produced.

It should be noted that the upward trend in production can be traced for more than a year already.
Thus, in 2011 the production of apple juice concentrate increased by 13% compared with 2010 and amounted to 66.1 thousand tons. Despite the increase in domestic production, Russia also increased imports of apple juice concentrate. So far, for the first 9 months of 2012, 92.1 thousand tons of concentrate were imported, which is 13% more than in the same period of last year.

Source: www.fruitnews.ru