Morozko is Russia's leading frozen food producers, and has a reputation as a quality producer: indeed, it is the only Russian frozen food firm to export to western Europe. The Maslenitsa brand of frozen pancakes is one of the crown jewels of its portfolio, the second largest pancake brand in the country and a major player in a growing market.
According to market research group Business Analytica, frozen pancakes' share of the total Russian frozen food market is 9.6 per cent, up from 8.9 per cent last year. With 35 different flavour variants of Maslenitsa alone, it is perhaps no surprise that pancakes account for such a relatively large share.
But Maslenitsa's quality reputation has come at a price, as Morozko has invested heavily in modern production technology to ensure consistently high quality output - in turn tying up cash which could have been used for marketing and promotion. A lack of funds has also prevented the company from expanding distribution beyond its home region, a common failing among Russian food producers.
But selling the brand to a specialist distributor and concentrating instead on production allows both parties to play to their strengths. Kairos had been looking for a potential brand in the frozen food market for some time, and Maslenitsa fitted the bill perfectly. Not only was the product well-known in Russia, it was also perceived to be of a high quality and was trusted by consumers.
Furthermore, it was a brand that Kairos knew well - Maslenitsa has been marketed by Kairos since its launch five years ago, as part of a wider distribution agreement with Morozko.
"We think that the purchase of the Maslenitsa brand is a logical step for a company like Kairos. We have wanted to buy a brand in this sector of the market for a long time in order to expand the range of products we distribute, and Maslenitsa is well known as a high quality brand which has been a hit with consumers since its launch," Andrei Zikin, sales director of Kairos-Moscow, told CEE-foodindustry.com.
Under the terms of the agreement with Kairos, Morozko will continue to be the sole producer of the Maslenitsa brand, allowing the quality to be maintained and ensuring a continued return on its investment for the company. Morozko will retain control of its other brands, although they will continue to be distributed by Kairos. The company makes more than 200 products, more than any other company in Russia, including beefburgers, pizzas, pies and pasta.
At present, around 50 tons of Maslenitsa-branded products are produced each month, but the change of brand owner is expected to lead to a sharp increase in demand, not least because Kairos sells its products throughout the entire Russian Federation. Kairos group plans to extend its operations to the CIS markets by the end of year.
But while it obviously has big plans for Maslenitsa, there are unlikely to be any immediate changes. "We don't intend to change the brand's pricing policy in the immediate future," said Kairos spokesman Nikolai Kuznetsov."What we are going to do first is to find additional markets for Maslenitsa distribution, as well as stepping up promotion through free samples, competitions and participation in food exhibitions. In other words, we are going to target not only our trading partners, but also consumers."
Kairos markets a wide range of food products throughout Russia, targeting the mainstream retail trade and horeca channels. Its brands include Aviko, Bonduelle, Dujardin, Dr Oetker, Farm Frites, Hortex, Mars, McCain, Unilever, Zolotoi Petushok, Morozko and Ravioli.