New snack flavours capture Russian consumers
consumers' imagination with an array of experimental flavours and
products, overtaking PepsiCo's Lay's brand in market share and
growing by up to 50 per cent annually, reports Angela
Drujinina.
Sibirsky, born in late 1999, claims its Kirieshki brand now controls 12 per cent of the Russian snacks market, three per cent ahead of Lay's, and has grabbed 30 per cent of the Moscow market alone after launching there a year ago.
The firm said its success was rooted in an aggressive marketing campaign - it spent $3 million (€2.3 million) on Moscow - and a host of innovative flavours including hot dog, caviar, dried squid and fish. The company is also working on a similarly experimental range of sweet snacks under its newly formed Cantuccini brand.
Sibirsky's quick success in Russia again shows the advantage a well-marketed domestic brand can hold over foreign products that sometimes struggle against an 'alien' appearance.
Yet, Sibirsky has been forced to pay for its success by taking on greater costs through high-value ingredients and more timely production techniques.
"Caviar flavour is a very expensive product, but we don't save money on ingredients. In order to be a leader, we must manufacture products with expensive ingredients because otherwise unprincipled competitors will copy them," said a Sibirsky spokesperson.
The company, like many other top Russian producers such as Wimm-Bill-Dann and Saga, buys its ingredients abroad. Russian dairy firm Wimm-Bill-Dann said it was forced to do this because Russia lacked the quality and range of ingredients for innovative products.
Sibirsky has also found success by committing itself to a production technique more reminiscent of craft baking than the methods used by big industrial players.
The firm said it allowed bread to cool naturally after cooking. After that it is cut and dried further in special ovens. The crumbs are then sifted out, the flavour is added and then the product is packed. The removed crumbs are used for manufacturing the firm's Bombaster air snacks.
Sibirsky has two factories - one in Moscow and the second one in Novosibirsk. The company said it was forced to build a factory in Moscow because the market is large and logistics are expensive.
The firm said its next move would be to increase production of beer snacks and begin a seasonal rotation of its fish snacks, which it said sold better in the summer and not so well in winter.
The company even has a plan to become a leading international snacks player by 2009. Last year it had sales worth $140 million, though it claims these are increasing rapidly as the firm progresses in Russia and begins to sell more products across Eastern Europe and former Soviet countries.
