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The sweeter things in life: A look at the Russian confectionery market

As the world’s third largest confectionery market, in terms of consumption volumes, Russia certainly seems to have something of a sweet tooth. ITE Food & Drink has prepared this quick overview of the market so you can get to grips with the sweetest section of Russia’s food and beverage industry.
 

Confectionery in Russia: The headline stats

 
A report from industry trade publication Russian Food Market suggests that Russia’s confectionery sector is currently worth $10.3 billion, with an average of $110 per capita spent annually on sweets. According to research firm MarketLine, market performance is expected to accelerate with a compound average growth rate of 6.9% over the five years from 2014-2019 and ultimately be worth $18.2 billion.
 
Imports of confectionery items, including chocolates, gum, sugary snacks and other products total around 250,000 tons annually. Germany represents 17% of import values and 13% of total import volumes on the Russian market. For context, $645 million worth of chocolate confectionery products were imported to Russia in 2014 – more than sugar confectionery, of which $203 million worth of goods were imported in the same year.
 
An important point to note is that domestic chocolate producers rely heavily on ingredient imports. Some 60% of raw materials needed by Russian producers is imported from overseas – providing ample opportunities for foreign ingredients producers to expand into Russia.
 

What are the top products enjoyed by Russian confectionery consumers?

 
Russian Food Market suggests that Russian consumer’s sweet tastes are leaning more towards baked goods with a longer shelf life than other perishable varieties. However, at present, chocolate still rules the confectionery roost.
 
According to Research & Markets, chocolate is the fastest growing category, in terms of volume consumed. Consumption per capita stands at around 4.5kg. Research & Markets also suggest Russians buy candy to treat themselves, which goes some way towards explaining why 5% of the chocolate market is made up of premium offerings. 
 
75% of all the candy consumed in Russia is some form of chocolate product.
 
Sugar confectionery, referring to a range of products including boiled sweets, toffees, marshmallows and fondants, saw a 5% increase in value growth in 2015, according to Euromonitor International. A slowing down of economic conditions was behind this value growth, as these candy types are generally cheaper than chocolate offerings.
 
As mentioned briefly above, baked goods, such as pastries and biscuits, are rising in popularity. Russia is the fourth largest consumer of this type of confectionery, behind the UK, Germany and US. 
 
Despite prices increasing on key ingredients and production costs, which suggests Russian producers will start looking overseas for quality ingredients soon, sales have bumped up according to Russian Food Market.
Gum, on the other hand, remains stagnant, according to Euromonitor International, with only bubble gum showing positive market growth levels of 3% across 2015. 
 

Will the future be sweet or bitter for the Russian confectionery market?

 
As touched on earlier on in this article, there is strong growth forecast until 2019 where the market is predicted to be worth over $18 billion. However, economic concerns will affect performance as Russian consumers are likely to favour cheaper offerings.
 
Where can foreign companies fit into the market? A number of multinational firms, including Nestlé, Mars and Mon’delez already control major market shares of 26%, 21% and 16% respectively. Mars, specifically, is planning on increasing its dominance of the gum market, of which sub-brand Wrigley’s controls 71%, by investing $9 million in its St. Petersburg production plant.
 
It seems the easiest space for overseas companies to slot into will be in the supply of raw ingredients, such as cocoa and sugar, in order to meet Russian production quotas.


 

Related Events

Event24 Sep

WorldFood Moscow..

24-27 September, 2019
RUSSIA

MOSCOW, RUSSIA
Venue: CROCUS EXHIBITION CENTRE

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