Russia’s organic food & drink market: what can you learn from successful exporters?
Published on 24/08/2016
Organic food and drink is very much in demand amongst Russian consumers. Data from the nation’s National Organic Union (NOU) shows substantial market growth in recent times, expanding 60% over the past five years.
If your business wants to dive headlong into the market and enjoy the fruits of Russia’s organic revolution, where do you start? What do potential exporters need to know? ITE Food & Drink chatted with Carole Bingler, Export Manager for Dutch organic tea and coffee company Simon Levélt, to discuss her experiences in entering the potentially lucrative Russian sector.
Simon Levélt operates close to 50 specialist tea and coffee shops across the Netherlands and Belgium. The Dutch company took its first tentative steps into the Russian market nine years ago in 2005.
Russian appetites are going greener
"When we started exporting, the organic market was very, very small and not known in Russia,” Ms Bingler explained. “But, after a trade show, we made a contact with a company that was busy with organic agriculture in Russia while the market was growing. It was a good contact so we just clicked. We are still very busy with them today."
“During our time in Russia, the organic food market has definitely expanded,” Ms Bengler commented, a statement which can be backed up by some impressive stats. The organically produced food industry held a market valuation of $178 million in 2015, an increase from 2010’s $116 million total, which demonstrates how Russian consumers are hungry for healthier offerings.
Euromonitor has also noticed increased spending on pre-packaged organic food and drink in Russia. 2015 saw consumers purchase close to $12 million worth of packaged eco-foods.
Roughly 3% of Russia’s population regularly choose healthier, organically sourced options. This equates to four and a half million health conscious Russians on the look for out for organic products – and this demand is only set to rise.
Making your mark on the Russian organic food market means partnering up
“My advice for businesses looking to enter the Russian organic food market is to find the right partnership and distributor – especially if you are a smaller company,” Ms Bingler advised. “You may not have the manpower to get through the bureaucratic process. Bigger companies may be fine, but smaller companies need to find the right partner for to be successful.”
Simon Levélt’s initial, and still primary contact, is organic heavyweight Arivera. Arivera is a major player in the Russian health food market, acting as both a retail point and distributor for importers. It’s the chain’s logistical heft that makes them a worthwhile partner for Simon Levélt.
“Through Arivera, we sell to other supermarkets and shops,” Ms Bingler explained. “We also sell through Arivera’s own stores as this gives us a strong presence in Russia.”
Forging strong relationships with key industry distributors is essential for success in Russia, according to Ms Bingler: “Entering the Russian market was quite long. There are lots of procedures to go through relating to the ingredients and customs and whether they will let you export to Russia.”
Organic ingredients are a hot topic for exporters
Russian authorities are particular sticklers when it comes to the careful monitoring of organic ingredients. Single ingredient products, such as coffee, come under less scrutiny from Russian inspectors as a dry product: “With coffee, it is a dry product. There is no liquid or funny ingredients,” Ms Bingler told ITE. As a result, the import procedure was sped up so Simon Levélt’s coffee could be moved from supermarket shelves and into Russian cups much faster.
“With tea, it is a little bit different,” Ms Bingler stated. “Different flavours are used. A tea could include 20 different ingredients which could be difficult to trace or could potentially be seen as dangerous.” Exporters are advised to know their products and supply chains inside out. Doing so will make getting produce to the Russian market a much smoother procedure.
Russian organic consumers prefer simpler flavours
The organic element amongst Russia’s population appears to prefer more straightforward products, at least where tea and coffee is concerned. Simon Levélt’s biggest selling products in Russia are basics such as black tea, Earl Grey - “nothing too fancy, just yet”. For context, Simon Levélt’s biggest selling product in Russia is loose tea sold in 100g bags.
Ms Bingler’s experiences tell us that exporters should keep things simple initially. Offer a wide range of goods, for sure, but be aware that simpler may be better. As long as the goods are organically sourced, provably so, then success in Russia’s burgeoning eco-food sector won’t be far away.
Exporters should also be wary of the ingredients of any new foodstuffs or products they plan to launch once settled in Russia. The same rigorous checks and testing procedures will be applied to these.
Prudent planning, product knowledge & proper partners points to success
Organic food demand is on the rise in Russia. And, given President Putin’s December 2015 comments on turning Russia into a world leader in eco food, grassroots support and growth can is almost a sure thing.
Simon Levélt’s experiences in entering the Russian organic food market offers terrific insights into how to launch a successful enterprise. There are no real tricks. Simply put, exporters need to plan thoroughly, know their products and their ingredients inside and out and keep an eye out for that perfect import/export partner.
One major factor in Simon Levélt’s success in Russia came from making the right contacts. Meeting an Arivera representative at a trade show paid off for the Dutch brand in big ways. If you are an exporter looking to break into Russia’s rapidly developing organic food and drink market, exhibiting your goods at industry expos should be your number one priority.
The WorldFood series of trade shows, including Russia’s largest such exhibition,
WorldFood Moscow, offers exhibitors the optimal space to get their products exposed to Russia’s key health food industry figures. Learn more about the show today and make your first steps towards Russian success.