28th International Food Exhibition
24–27 September 2019 • Crocus Expo, Moscow, Russia

Russian food & drink market: January update

News
If there’s one thing you can guarantee about Russia’s food industry, it will always be interesting. In the first news roundup of 2018, we take a look at some of the biggest food and drink-related news stories coming from the Russian market right now.
Russian food & drink market: January update

Russian food & drink news update January 2018

Import rise forecast
 
Predictions for how much Russia spent on food and drink imports are in – and they are looking good for international exporters. According to the Russian Ministry of Agriculture, Russia is expected to have imported 11.4% more food and drink products in 2017 than the previous year.
 
Data suggests Russia will have sourced $27.9 billion worth of food from overseas by the end of 2017, against the $25 billion imported in 2016.
 
Highest import increases in individual product groups include a 29% increase in supplies of vegetables and a 13% rise in fresh fruit imports. Imports of dry milk increased by 15%, while butter imports also rose by 7%.
 
Russians grow a taste for Australian wine
 
Wine is a market worth $693 million in Russia. Consumption is rising, and is expected to reach a total of 1.1 billion litres a year nationwide by 2020. Australian wines are emerging as new favourites for Russian consumers, with sales of Australian labels doubling across the last decade.
 
Australia is still technically under embargo by Russia – but alcohol is not amongst the restricted export categories. As such, Australian Rieslings and Shirazes are making waves amongst Russians.
 
And although only around $5 million worth of antipodean wines are bought in Russia, several brands are taking steps to grow their market share.
Penfolds, for instance, is investing in a series of brand awareness-boosting activities across 2018, such new product launches, and an Australian wine masterclass held for high net-worth private buyers, Russian sommeliers, and the media.
 
More Kazakh stores to open throughout Russia
 
Several Russian regions including Tyumen, Yekaterinburg, and Novosibirsk, are to see more Kazakh grocery stores open there in 2018, says the Kazakh embassy in Moscow.
 
“At present, there are two Kazakh food stores in Omsk and the number is planned to be increased to 50,” the Embassy said in a statement in January 2018. “Next are the nearby major cities – Tyumen, Ekaterinburg, and Novosibirsk.”
 
KazMarket LLC, the organisation behind this expansion effort, says it plans to create a whole food network, with a focus on natural, environmentally-friendly produce, across its Russian operations.
 
Trade between Russia and Kazakhstan represents over a quarter of all trade between the CIS countries. Kazakhstan is diversifying away from its hydrocarbons-based economy, hence this new drive to grow the presence of Kazakh food in Russia.
 
Uzbekistan eyes more Russian fruit & veg exports
 
Uzbekistan is emerging as a regional agricultural player – and it intends to start exporting more fruits and vegetables to Russia. Tohirjion Zhalilov, Chairman of exporters Uzbekozikovkatholding, is keen to develop this market further after a successful 2017.
 
Uzbekozikovkatholding grew its Russian exports by 32% in 2017, resulting in shipments of 162,000 tons of fruit. New and improved delivery infrastructure played a big role in growing these shipments.
 
“To date, fruit and vegetable products from Uzbekistan are supplied to Russia in three ways: by rail, by road, and by air. We started to use air transport exclusively in 2017. This method of delivery significantly increased the speed and allowed products to keep their freshness for longer,” Zhalilov said.
 
Yandex to grow Russia’s food-delivery segment
 
Food-delivery is nothing new, but apps like UberEats or the UK’s Deliveroo, have taken it to another level. They are giving consumers the option to buy from almost any restaurant and get it delivered straight to their homes.
 
Yandex has teamed up with Uber in a joint venture worth $3.7 billion to develop its Russian food-delivery sector.
 
Part of the deal is Yandex’s recent acquisition of Moscow’s second largest food-delivery specialist Foodfox in a deal worth a projected $10 million. The goal? Move Foodfox’s current Moscow-focussed operations from regional to national, utilising Yandex’s impressive resources, to spread food-delivery nationwide.
 
Yandex has appointed Foodfox’s founders, Mazim Firsov and Sergey Polissar, to head this expansion. Foodfox works with 2,000 restaurants in Russia’s capital at present.
 
Currently, food-delivery is a $1.3 billion market in Russia, and is mainly focussed on the larger cities like Moscow and St. Petersburg. With Yandex’s purchase of Foodfox, the market could be tipped to grow massively – and create more opportunities for foreign manufacturers to supply this burgeoning restaurant sector.