5 big reasons to make Russia your next food & drink market

As we come towards the end of the third year of Russian food sanctions, you might be asking yourself why you should even bother with that market. Well park that cyniscism because, even though imports of certain food items are restricted, there are still lots of great reasons to export food to Russia.

Here are five of them.

5 reasons why Russia is your latest food & drink export destination

Russia still imports billions of dollars’ worth of food

While it’s true import levels have dropped off – these things will happen if you ban food and drink items from the world’s largest common market (the EU) – but that doesn’t really tell the whole story.
 
Throughout 2016, Russian buyers imported food and drink items worth around $25 billion. That makes Russia still one of the world’s top ten importers of food.

Not all varieties of food were banned either. It was mainly the bigger product groups, such as meat, dairy, and fruit and vegetables, that got hit with the ban hammer. That means there are still plenty of opportunities for more niche manufacturers in sanctioned nations to get their goods to the Russian market – it just depends what kind of goods they are.

Speaking of sanctions…

Sanctions creates market gaps for non-sanctioned states to fill

With EU, US, Norwegian and Australian produce off the table, significant markets gaps have been opened up for countries immune to Russia’s trade embargo. Countries from the Middle East, South Africa, and Asia have enjoyed significant boosts in Russian trade, thanks to the food bans.

Argentina and Brazil, for instance, grew their meat exports by 25% and 10% respectively in the aftermath of the food bans. Pakistan has seen its exports, mostly fruit varieties, expand by 14% too. Demand for produce that cannot be grown domestically remains high in Russia, and it’s producers in these countries that are reaping the benefits.

Improved infrastructure at ports and across the Russian railway network is also making it easier for internationally-sourced goods to make their way to Russian consumers.

You can find out more about the opportunities available for non-sanctioned nations in our free 14-page market report. Click here to download your copy.

Russia is a huge market

Russia’s the biggest country in the world, by size, but also has one of the biggest populations, largest economies, and largest food and drink markets.

Roughly, including production, food and drink is a $150 billion industry in Russia, while food sales account for 53% of total retail revenues nationwide.
 
144 million people make their homes in Russia, and the population has been growing at a steady rate since at least 2010. More mouths to feed means more food and drink items are needed to keep everyone fed and happy.

Turning to monetary matters, Russia falls just outside the top 10, falling in 12th place globally. Its GDP is around $1.2 trillion.

Since 2014, however, the value of the rouble took a nose dive, and the economy entered recession mode. But don’t panic – the Russian economy is returning to growth – at a rate of 2.5% this year, according to estimates from Russia’s Federal Statistics Office.

Purchasing power is likely to realign to pre-sanction levels relatively soon, suggesting more Russian buyers will have more cash to spend on imported items.

More niche sectors are emerging as Russian consumers’ habits change

With societal and economic factors in a state of flux, affected Russians are turning towards product groups that were not previously prominent – creating more market entry points for international suppliers catering to these specialities.

For example, healthy, organic options are starting to bed into Russian eating habits. 3% of Russia’s population regularly consumes organic food after the market grew 60% over the past five years.

Frozen food, in part down to tighter household budgets during Russia’s recession years and busier lifestyles, is enjoying increased sales too.
 
One of the biggest sectors that might be unknown to the larger global community is halal food.  20 million Muslims live in Russia, creating a domestic halal market worth around $1.1 billion.
 
There are plenty of emerging sub-sectors waiting to be filled by international produce in Russia. Can you supply them?

A big market for food production machinery

If your line of work lies in the production and supply of agricultural and animal-husbandry equipment, than Russia should really be on your radar. Import bans have been the catalyst for an explosion in Russian agricultural output which shows no signs of slowing any time soon.

With production of poultry meat, pork, dairy products, and fruit and veg, on the up, the government is hurling billions of roubles into agricultural subsidies. With these, Russian farmers from Kaliningrad to Vladivostok can purchase modern equipment and production machinery to boost output levels.

Meet the Russian food industry at ITE Food & Drink’s events

ITE Food & Drink is one of the world’s foremost organisers of food and drink exhibitions, including Russia’s biggest sector event: WorldFood Moscow.

We put on shows covering all aspects of the Russian food industry. So whether you are an exporter looking to get your products into Russia, a supplier of food production equipment, or just want to take the pulse of Russia’s food and drink industry, you need to be at one of our exhibitions.

For more information, head over to our events page.

Can’t find what you’re looking for? Contact our team today.

 

Related Article