Russia Food and Drink Report Q3 2009

Russia Food and Drink Report Q3 2009

Published By: Business Monitor International
June 2009
R302-6635
Online Download $495.00

Description

In the BMI’s Business Environment Ratings (BER) matrix for the Central and Eastern Europe (CEE)region in Q309, Russia occupies pole position, to which it climbed from fourth previously. Although oneof the main reasons for its improvement is the more severe worsening of absolute scores of othercountries, Russia’s top spot also indicates the resilience of its marketplace in the face of severedifficulties. However, one of our core views for 2009 is that the effects of the external sector slowdownwill be much more sharply felt in private consumption, which has thus far held up relatively well. Asoutput contracts alongside investment reductions, the inevitable outcome will be rising unemployment,declining real wage growth and shorter hours worked in key sectors. Combined, these will be the feedthroughprocesses that push private consumption growth into negative territory in 2009. Overall, weforecast private consumption in Russia to contract by 5.0% this year.

Nevertheless, foreign companies continue to invest in Russia, clearly eyeing the longer-term potential ofthe country’s populous market. To this end, consumer goods giant Unilever acquired Baltimor Holding- the parent company of Baltimor - Russia's market leading tomato ketchup maker, and a popularSoviet-era brand. Around the same time, Unilever stated that it expects its Russian sales growth to be indouble digits in 2009, despite a slowdown in sales in H209, due to the global economic crisis. Around thesame time, India-based tea manufacturer Tata Tea Limited (a subsidiary of Tata Group) joined forceswith the European Bank for Reconstruction and Development (EBRD) to acquire a controlling stakein Russian tea and coffee manufacturer Grand. The Coca-Cola Company (TCCC) announced plans toinvest US$1.2bn in Russia over the next three to five years, as it aims to capitalise on growing demand forcarbonated drinks.

However, in what are perhaps surprising developments, other multinationals are cutting their losses inRussia. For example, Nestlé Waters agreed to sell its Russia-based bottled water arm Saint Spring torival bottler IDS Group, while Sun InBev, a Russian arm of the world's largest brewer Anheuser-BuschInBev (A-B InBev), is potentially to be sold off, as its parent company aims to reduce the amount of debtthat needs re-financing. It has been reported that should A-B InBev decide to entertain offers for SunInBev, SABMiller would probably be at the front of the queue, as it aims to expand its currently singledigitmarket share.

In terms of the domestic food and beverages, as well as the mass grocery retail (MGR) industry, the year2009 will be a challenging one as smaller companies fall prey to larger players. Leading dairy companyWimm-Bill-Dann (WBD) and private equity fund Russia Partners are already eyeing acquisition targetsthroughout the region. Global MGR operator Carrefour recently made a move to acquire the majorityshare of one of the top ten MGR operators, Sedmoi Kontinent, as it makes its entry into Russia, withthree Carrefour hypermarkets schedule to open during in the course of 2009.

Table of Contents

Executive Summary: SWOT Analysis; Russia Food Industry SWOT; Russia Drink Industry SWOT; Russia Mass Grocery Retail SWOT; Business Environment; CEE Food & Drink Business Environment Ratings
Table: Regional Food & Drink Business Environment Ratings Q3 2009: Russia’s Food & Drink Business Environment Rating; Macroeconomic Outlook
Table: Russia - Economic Activity, 2006 - 2013: Food; Industry Forecast Scenario; Food Consumption
Table: Russia Food Consumption Indicators - Historical Data & Forecasts: Confectionery
Table: Russia Value/Volume Sales of Confectionery (US$mn, unless otherwise stated) - Historical Data & Forecasts: Canned Food; Trade
Table: Russia Food, Drink & Tobacco Trade Indicators (US$mn) - Historical Data & Forecasts: Industry Developments; Market Overview; Food Processing; Leading Players; Dairy; Ice Cream; Cereals & Baked Goods; Confectionery; Snacks; Trade; Agriculture; Drink; Industry Forecast Scenario; Alcoholic Drinks
Table: Russia Alcoholic Drinks Sector Production and Value/Volume Sales - Historical Data & Forecasts: Soft Drinks
Table: Russia Soft Drinks Sector Value Sales (US$mn) - Historical Data & Forecasts: Hot Drinks
Table: Russia Hot Drinks Sector Value Sales (US$mn) - Historical Data & Forecasts: Industry Developments; Market Overview; Alcoholic Drinks; Beer; Wine; Spirits; Soft Drinks
Table: Russia - Volume Consumption Of Soft Drinks By Category (mn litres)
Table: Russia - Value Consumption Of Soft Drinks By Category (US$mn): Hot Drinks; Mass Grocery Retail; Industry Forecast Scenario
Table: Russia MGR Value Sales By Format (US$bn) - Historical Data & Forecasts
Table: Russia Grocery Retail Sales By Format (%): Industry Developments; Market Overview; Leading Players
Table: Russia - Structure Of The Mass Retail Grocery Market By Estimated Number Of Outlets
Table: Russia - Structure Of The Mass Retail Grocery Market By Value (US$bn)
Table: Russia Annual Average Value Of Sales By Format (US$mn): Competitive Landscape; Key Players; Food and Drink
Table: Key Players - Russia’s Food & Drink Sector (2008): Mass Grocery Retail
Table: Key Players: Russia’s Mass Grocery Retail Sector: Company Analysis; Food; Wimm-Bill-Dann Foods; Kraft Foods; Inmarko; Cherkizovo; Drink; Baltika; Sun InBev; Heineken; Mass Grocery Retail; Sedmoi Kontinent; X5 Retail; Paterson; Appendix; Commodity Price Forecasts; Corn
Table: Corn, 2005-2010: Soybean
Table: Soybean, 2005-2010: Rice
Table: Rice, 2005-2010: Wheat
Table: Wheat, 2005-2010: Cocoa
Table: Cocoa, 2005-2010: Coffee
Table: Coffee, 2005-2010: Milk
Table: Milk, 2005-2010: Sugar
Table: Sugar, 2005-2010: Country Snapshot: Russia Demographic Data; Section 1: Population
Table: Demographic Indicators, 2005-2030
Table: Rural/Urban Breakdown, 2005-2030: Section 2: Education & Healthcare
Table: Education, 2002-2005
Table: Vital Statistics, 2005-2030: Section 3: Labour Market & Spending Power
Table: Employment Indicators, 2001-2006
Table: Consumer Expenditure, 2000-2012 (US$)
Table: Average Annual Wages, 2000-2006: Food & Drink Business Environment Ratings; Ratings Methodology; Ratings Overview; Ratings System; Indicators; Limits Of Potential Returns; Risks To Realisation Of Potential Returns; Weighting; Weighting; BMI Food & Drink Industry Glossary; Food & Drink; Mass Grocery Retail; BMI Food & Drink Forecasting & Sourcing; How We Generate Our Industry Forecasts; Sourcing

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