South Korean food in Russia


At each edition of the WorldFood Moscow international food and drink exhibition, brands from the Republic of Korea are always well represented. South Korea’s culinary charms are gaining traction worldwide – and its next destination is Russia.

Russo-Korean cuisine, a fusion of traditional Russian tastes with Korean meal preparations and ingredients, has been evolving since at least the 1970s. For example, Russian Carrot is a Russian take on that old Korean favourite kimchi, made using carrot sliced into thin slices and seasoned with a slightly sweet marinade made with garlic, coriander, pepper, vinegar, sugar and sunflower oil.

This is just one of the Korean-inspired meals being enjoyed across Russia right now. Korean barbecue restaurants are cropping up in major Russian cities like Moscow, St. Petersburg and Krasnodar too so a cultural culinary fusion is underway. Now, the big question is: how does this benefit Korean manufacturers looking to enter the Russian market?
 

South Korea – small Russia food & drink exports so far with room to grow


Apart from the culture-sharing aspect of global food and drink partnerships, there is of course the pure trade-focussed aspects. Businesspeople from South Korea will want to know their options when checking out Russia. Statistics from the MIT Atlas of Economic Complexity global trade database says South Korea exported $7.6bl worth of food stuffs, including animal goods and fruits and vegetables. Of this, Russia currently represents only 2% of total Korean food and drink exports, or roughly $147 million in foodstuffs.

Russian wholesalers and importers are trending more towards Korean ingredients or grocery items at the moment. Such products cover the bulk of import revenues, totalling $137m in 2016. Individually, the most in demand products from Russian buyers from Korean producers are:

•Food preparations - $19.8m
• Flavoured water - $19.4m
• Coffee & tea extracts - $18.6m
• Sauces, condiments & seasonings - $17.8m
• Soups & broths - $7.7m
• Baked goods - $7.24m
• Fish & seafood - $6.15m

This tells us that Korean goods are gradually infiltrating the Russian mainstream. Russian buyers want to secure supplies of key raw materials from Korean producers. Elsewhere, retailers are starting to stock more products from the Republic of Korea as well.
 

How Korean producers can grow their market niches in Russia


From the above, we can see the clear split between consumer-focussed foodstuffs, i.e. condiments, soups, waters, and those products more suited to production. Groceries are possibly the most effective route to get goods directly onto Russian supermarket shelves, and into consumers’ cupboards.

Food retail represents an enormous chunk of total shopping spending throughout the Russian Federation, as revenues regularly exceed $160 billion a year. As an international food and drink event, WorldFood Moscow is used by representatives from the biggest Russian chains to find the latest products. Manufacturers and suppliers from the Republic of Korea should really be at the show. It’s the only real way to meet and do business with buyers from Russian supermarket giants like X5, Auchan, Dixie and others.

We can also see an increased demand for packaged and processed goods in contemporary Russia. It’s the eight largest market in the world of such items, with 27.5 million of trade volume for food. Drinks show similar impressive stats. The market volume for bottled drinks is around 26 billion litres. Demand, which has been growing steadily since the turn of the decade, is expected to grow. By 2020, it’s estimated the market will grow 7.7%, meaning a total of 29 million tons of packaged groceries would be needed to keep Russian shoppers happy.

It’s also worth noting we are nearly now four years on since Russia implemented its food and drink embargo. If you are unaware, producers in the EU, US, Australia, Canada, and Norway, are limited in what they can export to Russia. That has created a huge deficit in sectors like fish and seafood, meat and poultry, and fruits and vegetables. South Korea faces no such sanctions. That means it’s producers are free to export essentially any foodstuff to Russia – a significant advantage over food suppliers in sanctioned states.
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