Busier lifestyles & tighter budgets fuelling Russian frozen food sector


Times are tough for average consumers in Russia at present. Prices of fresh food and drink products seem to be rising, despite domestic efforts to replace imports. In the processed frozen sector, however, things are heating up.

Even before recession hit Russia, prior to import sanctions being put in place, frozen food sales were on the up. 2013, for example, saw a 13% increase in frozen product sales volumes over the previous year, exceeding 300 thousand tons.

Throughout the first half of this decade, positive trends have been emerging. Euromonitor research shows Russian frozen food revenues grew at a CAGR of 5.2% between 2010 and 2014. The market reached a valuation of $4.9 billion during this period. Consumption also rose during this time, at compound annual rate of 3.4%, hitting over 1 billion tons cumulatively. In 2015, Russia was home to 4% of all new frozen product launches — the largest share of any Central or Eastern European nation.

So why are more Russians turning away from fresh produce and heading to the frozen aisle instead? It is a question of both changing lifestyles and ongoing economic pressure. Russia’s import ban has had a negative impact on the prices of fresh foodstuffs, playing right into the hands of packaged producers. Purchasing power has dropped. Incomes shrank 4% in real terms during 2015, meaning value-for-money, cheaper offerings are the go to product group for Russian grocery shoppers at present. Additionally, Russians are enjoying busier, more active lifestyles, mirroring global trends.

The need for foods to be pre-prepared and quick to cook has fed into the ongoing rise in frozen food sales and consumption throughout the nation, providing a burgeoning consumer base for exporters. Popular frozen products in Russia 10 million tons of frozen vegetables were sold in Russia in 2015, reiterating this point, displaying a 3% increase on the previous level. Sanctions have lit a fire under domestic Russian producers, improving their competitiveness and product ranges to suit shifting habits. However, much of their raw material supply stemmed from sanctioned nations — creating a gap for overseas producers to fill.

66% of all fish (excluding herring) sold in Russia is sold frozen. Fish is a promising growth area, as consumption per head increased from 20.9kg to 22kg between 2014 and 2015, but this is still below the level recommended by Russia’s scientists (23.7 kg). In 2014 before the sanctions hit, 68% of Russia’s frozen fish was imported.

Around 7% of all frozen sales in Russia come in the form of ready meals. Of these ready-to-eat options, roughly 25% contains some sort of meat. Domestic delicacies dominate the processed frozen sector. For example, pelmeni, a kind of small dumpling stuffed with pork, beef, lamb, or other meats, holds a 50% market share. Blinis, a thin pancake similar to a French crêpe, take up 17% of frozen processed sales.
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