August 25 2008, 11:28

Russia: growth of the market of frozen fruits and vegetables to slow down

During the last 4 years, frozen products dominate in the structure of the Russian market of frozen vegetables and fruits, however, every next year they lose their positions. Redistribution of the market shares is explained by more rapid rates of the frozen market volume increasing: in 2007 it has increased by 29.4% in natural volume while the market volume of frozen vegetables – by 17.6%, RBK reported.

The volume of the market of frozen vegetables and fruits, according to the estimations of “Express-Obzor”, in 2007 totaled 214.000 tonnes. During the last 4 years, the market has actively increased. The market growth in value terms was faster than in natural. This is caused by seasonal as well as by structure reasons.

Low as compared to the previous season harvest of 2007 has substantially influenced the current price situation. The rising prices for logistic services as well as declining dollar exchange rate aggravate the current situation.

The experts’ opinion regarding dynamics of the market volume of frozen vegetables and fruits agree that despite availability of the market, rates of its growth will gradually slow down. At that, the market development will be possible at the expense of regions. According to the estimate of “Express-Obzor”, following the results of 2009, the sales of frozen vegetables and fruits will increase by 15% in natural value.

Rise in customer demand, caused by speeding-up of way of life, increase of the employment level and mean income of the Russian people, is one of the main factors stimulating market growth. Elimination of deficiency of raw material by the companies as well as introduction of the modern technologies for cleaning and freezing of the production. We should also mention that the market of the frozen vegetables and fruits is characterized by strongly marked seasonality: the market of frozen products is sharply decreasing in the period of summer and autumn months, when fresh vegetables and fruits are actively consumed, the period of harvesting.

The imported production takes a considerable share in the total market volume – nearly 80%. The Polish producers prevail, at that Hortex is an absolute leader on the market. We also should mention Hortino, Fritar. Besides the Polish producers, the Dutch (Aviko BV, Farm Frites BV), French (Bonduelle), Belgium, Hungarian producers sell their products to Russia.

At that, Hortex constructs a plant with annual capacity of 25.000 tonnes of frozen production in the territory of Russia (Voronezh oblast). Despite that the share of Hortex totals 50-60%, on the domestic market, the company still does not have its own production in Russia. Construction of the plant is a long anticipated step from the side of Hortex. Today, the company needs to compete not only with foreign and Russian brands but also with privat label of trade chains – almost all largest product retailers started to sell frozen products under their own trade marks.