Russia food & drink market update: March

March brings more interesting news from Russia’s vast food and drink industry. Check out the latest big stories right here.

Russia embraces plastic packaging

While the West is scrambling to roll back its reliance on plastic packaging, Russia, as ever, is doing its own thing. Russian shoppers are coming to regard foodstuffs packaged in plastic as top-quality produce that is safe to eat. At present, Russia is dealing with fake and unsafe food on the market, fuelling this trend. “A lot of our customers are asking us to pack the produce now,” Ivan Gulyaev, Deputy Head of Purchasing at Russian fruit importers Tropic International. “In December 2016, around 20% of the citrus we handled was packaged. Last December we did 40%, and retailers still want more.”

Russian stores have been plastic-free zones up until recently, according to Gulyaev. “Now there is demand for consumers,” he told Fruitnet. “People see that quality is better, and perceive the product as safer. When you go to the supermarket in Europe, all you see is plastic packaging. We will see this in Russia too.”

Belarus set to export $400m of organic food to Russia

Organic food’s popularity is skyrocketing throughout Russia, becoming one of the export categories to watch. Neighbour Belarus, already a top agricultural supplier to the Russian market, is getting ready to grab its own share of this expanding sector – and export tons of organic food to Russia in the coming years. Russia’s organic food market has grown 60% over the past five years and is expected to keep expanding into 2018 and beyond.

“We have the opportunity to provide our people with organic food products and sell them abroad,” Belraus’ Deputy Agriculture and Food Minister Vladimir Gakun said during government talks in Minsk on March 3rd. “The Russian Federation is ready to purchase $400 million worth of such products.” Belarus’s organic sector is comprised of 20 companies at present, including private farms, businesses, and agroholdings like the Zhdanovichi Agricultural Complex.

Meat fraud reportedly rife in Russia

Up to 22% of meat products on the domestic Russian market were fraudulent in 2017, according to Russia’s food safety watchdog Rosselkhoznadzor. The Russian body has stated that pork products have been sold as beef, while sausage manufacturers have provided misleading ingredients information on product labels.

A study conducted in February 2018 by independent consumer-protection agency Roscontrol discovered products labelled as beef were actually pork, and in some cases contained traces of poultry. Roscontrol had earlier estimated up to 75% of sausages nationwide have been fraudulent. Some products tested by Roscontrol have even revealed traces of diseases like E.Coli and salmonella. Russia’s meat giants, including Miratorg, are now under fire from critics, who say they should do more to enforce food safety.

These are warning sides for the domestic meat industry – and could play into higher levels of meat imports as Russian-produced goods fail to meet health and safety standards.

Sbarro plots Russian return

Favourable market conditions have tempted US pizza brand Sbarro back into Russia after the franchise fell prey to downturns previously. Once Russia’s top fast pizza chain, Sbarro closed most of its Russian outlets after Russia’s finances fell in the wake of the recent global oil price collapse. With Russia’s nascent economic recovery on the way, Sbarro is taking a more cautious market re-entry approach. Rival’s Papa Johns and Domino’s – both American brands – have been aggressively expanding across Russia over the past decade. In response, Sbarro has partnered with the HoReCa Band Group and has unveiled plans to open more than 300 restaurants nationwide by 2027. HoReCA Band Group plans to open 10 to 12 Sbarro restaurants in Moscow in 2018. A further 14 to 16 are expected to be opened in other regions by sub-franchisees. Russian fast food sales cover over 54% of Russia’s total consumer food service sales.