IFF, one of the world’s top three flavour firms, has been represented in Russia by agents since the early 1990s. In late 2007 it decided to set up its own operations, as Russia is recognised as a major emerging market with much potential for future business.
Hernan Vaisman, group president for flavours at IFF, told FoodNavigator.com that the company strategy is to put more resource into all emerging markets. This year new creative centres have opened in Sao Paolo, Russia, and Shanghai, China.
The aim is to be amongst the leaders in the Greater Russia flavour sector – and that means having a stronger presence in the area.
“It makes a huge difference if you are working remotely or if you have people on the ground,” said Helga Moelschl, regional sales director for Russia, Ukraine, Belarus, and Central Asia.
Vaisman did not disclose the proportion of IFF’s sales that currently stem from Russia or from emerging markets overall, but between 70 and 75 per cent of the company’s sales are outside the United States.
The new facility, in the Moscow City business district, occupies a 460-square-metre building. It includes a test kitchen, application kitchens and a laboratory – as well as space for sensory and consumer insight analysis, and offices.
IFF has been recruiting local employees for the last 12 months, who will help bring greater understanding of tastes in the region. Since IFF has a global organisation, the team in Moscow will be supported by expertise at other sites in France, The Netherlands and the UK.
Karen Crofts-Hotston, VP regional general manager EAME flavours, said:
"While we are very proud of this facility, the best tools and equipment are meaningless without passionate people with energy, expertise, creativity and drive. I am proud to say that we have some of the best talent working here with one goal in mind: To create the very best flavours and fragrances for our customers."
Russian tastes
Russia is considered a market of high potential for the food industry as rising incomes are having an effect on eating habits.
“The population is very sophisticated and young, and people are catching trends coming from the West,” said Vaisman. The major trends in Russia are the same as those seen in other parts of the world, but with local taste twists.
In snacks and culinary flavours, for example, a very typical taste is dill; in beverages, tomato juice has a huge consumer following; and in confectionery the flavour profile of condensed milk is popular.
On the other hand, people are very curious to taste new things and are keen to try ethnic foods.
Touran Cheraghi-Kroon, director C&A, innovation EAME, said that preference profiles do differ across Greater Russia in subtle ways. One important driver in Belarus and Central Asia she pointed out is a need for cost-cutting. “That is more relevant than in Moscow.”
Logistics
One of the big challenges to going business in Russia is geography, said Vaisman. “It’s a big country, and the plan is to cover all territories in the years to come.”
He explained that every company on the ground is facing the same challenge – how to bring your goods to a customer that may be very far away. IFF will be working hard to secure its distribution network, so it can be sure that even if a consignment must travel far, it will still embody the company’s standards, vision and mission on arrival.