FFB finds huge potential in the Russian market

Food from Britain’s trade development visit to Moscow on 17-20 September discovered first hand the huge potential for UK food and drink producers in this exciting market. British produce ranging from teas, beers and ales, cereals, dried fruit, sauces and more could be found in all retail stores visited. 

The majority, 80%, of the UK companies who took part in the visit will be pursuing distributors they met during the trip and following up successful leads generated in Moscow individually or with the help of FFB. The trip highlighted the information needed in order to enter the Russian market such as customs control procedures, product certification and labelling.

Russia is an exciting emerging market for UK food and drink exporters.  The food sector is currently worth $180bn (retail prices) and is growing at approximately 15-20% per year.

Moscow and to a lesser extent St Petersburg are high-income cities with approx 10.4 million consumers in Moscow and 4.6 million in St Petersburg. Consumer incomes are showing spectacular growth and consumers are becoming more open to innovation and new product concepts. Russian consumers are showing signs of interest in speciality, health and convenience foods. Growing opportunities exist for niche and premium foods, where the modern retail trade dominate with 80% shares of sales. 
 
The market is attracting major foreign players, who are expected to enter via acquisitions and Russian importers and distributors are increasingly hungry for new brands. 

UK food and drink exports to Russia increased from £95 million in 2005 to around £110 million in 2006. Although most categories have shown an increase, top UK exports include fish and seafood, confectionery and baking related goods.

Although the potential for UK producers in Russia is evident, market success requires careful planning and local control of implementation. Costs of entry are lower now than when the market will consolidate but are rising.

 

09 October 2007