A report published last year by Leatherhead Food International showed that ketchup was the second most popular product in the sauces and dressings market in central and eastern Europe, with a 37 per cent share of a market estimated at nearly 700,000 tonnes. Only mayonnaise had a larger share (39 per cent) of both the Russian and regional market.
Leatherhead predicts that while growth in the sauces market as a whole will slow, there will continue to be opportunities for producers, with the total market set to reach 1.5 million tonnes by 2007, and with the Russian economy continuing to grow foreign groups are increasingly looking at investment opportunities in this sector.
US group Heinz is one such firm, with the company's president William Johnson recently reiterating the company's investment plans for the country, which along with China, India and Indonesia is seen as one of the four main development markets for the group.
Johnson said that the company was close to entering the Russian market following negotiations with a food producer there, and while he did not give any details of which company it was, all the indications suggest that it is Petrosoyuz, one of Russia's biggest producers of spreads.
Petrosoyuz announced recently that it was in talks with an (unnamed) foreign food producer over a possible co-operation agreement, and given Johnson's recent statement Heinz is clearly top of the list.
While Petrosoyuz has talked about a co-operation agreement, most analysts seem to think that Heinz would be interested primarily in a takeover of the company, estimated to be worth around $100 million.
Observers have also pointed to the marked decrease in advertising for Petrosoyuz's main brand, Picador, as an indication that the company's management is preparing to sell out, according to the Komersant newspaper.
St. Petersburg-based Petrosoyuz has seven manufacturing facilities in Russia, Uzbekistan and Ukraine, but its recent announcement of a plans for a new facility in Russia suggest that the company has not given up on going it alone quite yet.
Baltimor, the second-largest Russian player after Petrosoyuz, was also at one stage linked to Heinz, with negotiations between the two companies two years ago breaking down as a result of failing to agree on a price.
But speaking to the Russian newspaper Vedomosti, Baltimor's chairman Alexander Antipov suggested that Heinz would only be interested in Petrosoyuz's ketchup business - about 30 per cent of its total sales. As a result, a ketchup joint venture with Heinz, as a preamble to an eventual sale of the division, is thought to be the most likely, not least because it would allow Heinz to gain a clearer understanding of the ketchup market in Russia - estimated to be worth around $200-300 million - before committing itself totally.
But if it does eventually enter the market, Heinz will not be the only foreign player there. Czech group Hame, for example, is planning to begin production there in 2005, despite its relative lack of experience in this sector.
Hame is already present in Russia, where it claims to have some 30 per cent of the paté market, but in its home market it focuses primarily on meat products or other canned foods.
The Czech firm does already produce some ketchup, and its plan is to relocate the production line for this product from one of its other facilities to Russia in a bid to garner up to 7 per cent of the ketchup market there, mainly by competing with the raft of smaller players who share the 30 per cent of the market not owned by Petrosoyuz, Baltimor and Unilever and by focusing on more expensive ketchup products sold in glass rather than plastic bottles.