Active members of the National Union of Ice Cream Producers of Russia met in the capital on 17-19 February for their annual industry show and conference. Market results presentations and speeches from participants of the industrial congress revealed the current position of the sector as remaining buoyant and resilient to prevailing economic conditions, reported Moscow-based market research company, Market Advice.
In 2003 the Russian ice cream sector succeeded in achieving a significant increase in production volumes, which were up to 385,000 tons, an increase of 3.7 per cent on 2002. This gives the sector an estimated market value of more than $1 billion.
The import and export market still remains relatively small, on the other hand, with ice cream imports, which mainly account for the luxury end of the market, coming in at 3,1000 tons, and exports to other countries coming in at 11,7000 tons.
Although the overall production volumes look reasonably high, per capita consumption remains relatively low, coming in at 2.8kg of ice cream per person in 2003, compared with, for example, the Dutch who consume an average of 8kg of ice cream per head. On average, consumption of ice cream in the eastern European region is around one third of the volumes in western Europe and less than a quarter of that in the US, the leading global market.
Currently the ice cream market is divided up into the leading western European players - Nestlé and CIS Unilever - and the domestic producers Inmarko, Russky Kholod, Petrokholod and Belgorod. Although the country has around 360 ice cream processors, it is thought that around 10 of the biggest companies dominate the biggest share of the market.
Of these players there are four main players with retail activities in the 13 most strategic cities in Russia (populations over 1 million) - Talosto, Nestlé, Metelitsa and Inmarko.
Market research presented at the congress suggested that the most popular type of ice cream is the Eskimo brand in cups and wafers, with the least popular now being the ice cream sandwich. The market research also highlighted the marked increase in the retail price of ice cream, which has reportedly risen by 38 per cent compared to 2002.
Further market presentations expounded key trends in the market of ice cream in Russia during 2003. These included the consolidation of ice cream businesses, decrease in manufacturers' profitability, the rise in the use of vegetable fats, the promotion of national brands and the fight to win consumer loyalty.
Key players have also shown distinct signs of trying to open up niche markets, with products geared specifically towards children, teenagers and families all being launched. Currently ice cream of high quality in the average price category is in the greatest demand.
Finally, 2003 also saw a great deal of work carried out to create a new National Standard in ice cream. This is reported to now be well under way and is involving a number of the largest companies making significant investment to bring their production facilities up to the required standards.
The fact that the Russian ice cream market is now starting to target niche products is a sure sign that it is maturing, but the very fact that per capita consumption remains low indicates that there is still plenty of potential in this sector.
The interview for this article was bought about through the kind co-operation of Moscow-based market analysis company Market Advice.