March 15 2006, 10:59

Market of frozen berries, fruits and vegetables is growing 30% per annum

Analysts of "Agrooglyad: Vegetables and Fruits", which is the leading Fresh Produce industry magazine in Ukraine, informed today about essential increase in the level of investors' interest in flash-freezing of vegetables, berries and fruits in Russia and Ukraine. In 2005 several companies in Ukraine have started to produce frozen vegetables, fruits and berries under their own brand names.

Similar situation is observed in Russia. At the end of 2005 "Khladokombinat Zapadnyj", which is part of the "BIT" group of companies (ТМ "Chetyre Sezona", ТМ "Bistro" and ТМ " Nash Shef") announced plans to capture at least 50% of the market of frozen vegetables in 2006. The company said that it had invested around US $30 million is this new venture. Plans to develop production of deep-frozen vegetables were also announced by "Morozko" company, which is more known in Russia for frozen pancakes. The company was interested in constructing a factory in suburbs of Krasnodar, which, according to participants of the market, could produce up to 7 thousand tons of frozen vegetables and berries per month and would cost to the investor approximately US $10 million.

Recently another company "Inmarko" has also mentioned about its plans to occupy a modest 3,5 % of the Russian market of the frozen vegetables and berries. "Inmarko" is one of leaders of Russian ice-cream market. The company has developed a brand "Yest ideya" and is planning to place production of frozen fruits & vegetables at the Polish factory Oerlemans Foods Siemiatycze.

Companies that are already working with frozen products are interested in the segment of fruits, vegetables and berries because of its high rate of growth. Moreover, it is possible for them to use already available infrastructure even more efficiently: warehouses, transport, distribution, etc. According to various sources, Russian market of frozen fruits & vegetables is growing by 25 to 40% per year. Polish company Hortex is a recognized market leader in this segment. By various estimates, the share of Hortex on the market varies between 30% and 60%. Russian brands "4 seasona" is the second and "Domashniy Obed" is the third.

According to Mr. Andriy Yarmak, senior market information specialist of the Agricultural Marketing Project, several new companies are planning to start production of frozen vegetables, fruits & berries in Ukraine this season. It is partially caused by growing demand for these products on the Ukrainian market, where presently brands from Poland, Denmark, Holland and Belgium still play dominant roles. According to the expert, new investments in this industry could also be attributed to growing demand for frozen fruit and vegetables from Russia and the EU countries as well as from some processing enterprises in Ukraine. Rapidly increasing production of vegetables and berries in Ukraine where modern technologies are being applied is another factor behind the growing interest of investors. Fruit, vegetable and berry production of Ukraine is also experiencing a significant increase in investments from many small farms and firms as well as from several large industry players.