Through the co-operation of Moscow-based agency Market Advice, Ceefoodindustry.com was able to speak to the vice-president of the National Food Ingredients Manufacturers Union, Tatyana Katkova, who discussed the challenges the domestic ingredients sector is facing.
"Put simply there is a lack of food ingredients manufacturers in Russia," Katkova said. "Presently domestic ingredients suppliers can only meet around one third of the total ingredient requirements of Russian food manufacturers. But in response to this a programme to increase the availability of domestic raw materials is now in place, which will hopefully help the situation in the future.
"Russian ingredients manufacturers can meet the requirements for quality but not for quantity. Food manufacturers have become accustomed to international quality standards for ingredients because of the high rate of importation. This means that Russian ingredients suppliers have had to match these standards. In the area of emulsifiers for the dairy industry, as an example, there is one main domestic supplier - Nizhniy Novgorod's M.ZH.K - which is of a very high quality, in line with that offered by international suppliers."
Presently there is no development structure for the domestic ingredients sector. This, Katkova points out, creates problems, especially when it comes to establishing concrete rules for structuring the sector. Ingredients are divided into 25 groups, these groups being linked to different branches of the food-processing industry. For example, soya ingredients (isolates, concentrates) are linked to meat-processing and dairy, while improvers are linked to baking etc., but currently this is the extent of the structuring.
Quality self-regulating
With regards the all-important area of quality, Katkova says that there are government guide lines for food quality, but that largely the sector is self-regulating.
"The quality standards (GOSTs, TUs) are constantly changing. But it is the food manufacturers which are driving these changes rather than national food safety laws. Manufacturers constantly require higher quality, which ingredients suppliers have to comply with if they want to remain in business. In response to these requirements most ingredients manufacturers have research and development teams that are devoted to maintaining the quality of ingredients supplies to food manufacturers."
Katikova also points out that in reality many food 'manufacturers' in Russia simply buy in the cheapest ingredients from overseas and mix them together to form compounds which are then sold on to other food manufacturers. This is a practice which enables many processors to reduce costs, but also hampers the efforts of domestic suppliers who are unable to compete on such a scale.
Domestic supply of raw materials
The domestic supply of certain raw materials and ingredients can also be problamatic. The major raw ingredients are generally in good supply, but more specialised ingredients, of which demand is currently growing at unprecedented rates, are harder for domestic suppliers to source and work with. "Domestic suppliers of aromas, pectins, sugar substitutes and modified starches are often extremely hard to come by," Katkova said.
This has been born out of the growing complexity of ingredients, a problem which has often found domestic ingredients suppliers without the resources to cope with demand. "Just 10 years ago, vegetable oil was not refined at all. Now it has additives such as extracts of spices, and a variety of aromas which are adding to the increasing product diversity," said Katikova.
The Russian ingredients sector is currently struggling against a market which is saturated by cheaper imports from overseas. For it to compete against the international market it is clear that a development structure will have to be put in place in the near future. That the supply of raw materials is presently being addressed is only half the battle.
The interview for this article was bought about through the kind co-operation of Moscow-based market analysis company Market Advice.