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Russia: moderate 8% setback

Russia’s fruit imports have decreased less than expected, dropping from 6. 3 million tons in 2013 to 5 million tons in 2015.

Russia’s fruit imports have decreased less than expected, dropping from 6. 3 million tons in 2013 to 5 million tons in 2015.

All players in the fruit and vegetables market are well aware that fruit imports into Russia have decreased significantly since the food embargo it introduced in 2014. Indeed, from 6. 3 million tons in 2013, Russia’s fruit imports fell to 5.6 million tons in 2014 and to 5 million tons in 2015, the country’s customs data shows. A deep market analysis was presented during WorldFood expo during a conference organised by RK Marketing and FruitNews media. It included well-advised speakers such as Ilya Vinkler from the research consumer panel GfK Russia.

Abrupt cutback in value-added categories

Imports of nuts, dried fruit and kiwis into Russia have decreased the most, by 57%, 50% and 49% respectively. Other fruit that suffered most are apples (-35%), tropical fruit (-33%), pears (-32%) and grapes (-30%). But imports have remained almost the same in some categories – bananas, citrus and kaki – and in the case of melons and watermelon increased 21%. What is remarkable, however, is that fruit imports overall would have shrunk more under the embargo, if not for some fruit being imported illegally. Belorussia has notably become one of Russia’s top three suppliers, soaring from fruit exports of 208,000 tons in 2013 to 829,000 tons in 2015. Russia has a low level of domestic fruit production, something that has not changed much since the embargo. However, the amount of Russian-grown deciduous fruit (apples and pears) has risen from 614,000 tons in 2013 to 642,800 tons in 2015, that of grapes from 342,500 tons to 362,000 tons, and berries from 12,260 tons to 14,700 tons. Meanwhile, the stone fruit crop has shrunk from 40,300 tons to 29,900 tons. It is worth remembering, however, that 46% of Russians own a plot on which they grow their own fruit and vegetables to eat fresh and many also preserve and freeze them for winter.

This is an excerpt from an article which appeared on page 26 of edition 146 of Eurofresh Distribution magazine. Read that issue online here.

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Fresh Food Russia brings together retailers and producers

Dedicated to the production and retail sale of fresh produce, the VII international forum Fresh Food Russia 2016 was held at the Moscow World Trade Center on November 24, drawing top managers from national and regional retail companies and the heads of fresh produce companies who discussed burning issues such as the development of the fresh category in Russian retail stores and collaboration between retailers and producers.

Dedicated to the production and retail sale of fresh produce, the 7th edition of the international forum Fresh Food Russia 2016 was held November 23-25 at the Moscow World Trade Center.

Organised by BBCG B2B Conference Group, Fresh Food Russia drew top managers from national and regional retail companies and the heads of fresh produce companies.

Burning issues for the sector, such as the development of the fresh category in Russian retail stores and collaboration between retailers and producers, were among the topics discussed there.

Among the 25 expert speakers were Van Vreden (Lenta), Valeriy Vergun (Dixy), Oksana Shuliko (O’Key), Evgeniy Rimsky (VkusVill) and Egor Shumilin (X5 Retail Group).

Vergun said Dixy has moved to closer cooperation with local growers of fresh produce and local brands now account for the largest share of its assortment.

Valery Vergun, Dixy Group

Shuliko, head of the fresh category purchase at O’Key, said one of its current strategies is the development of the cooperation with the local producers.

Vreden, commercial director of Lenta, stressed the importance of close cooperation between suppliers and retailers, direct supplies and modern logistics infrastructure

Rusbaltika founder José Rodríguez discussed data on trade in fresh produce, recent import changes and major trade partners, as well as sharing some success stories. 

Forum moderator K. Kamenskaya said the results of the forum confirm the importance of bilateral meetings between relevant stakeholders.

A welcome trend was observed in the relationships between retail commercial departments and key suppliers of fresh produce – they are shifting to long term contracts.

On the second day, B2B meetings took place between fresh produce suppliers and retail buyers, including from companies such as Magnit, Perekrestok, Dixy, Gyperglobus and Azbuka Vkusa.

Oksana Shuliko from O’Key Market Company (right)

Images source: http://www.b2bcg.ru/events/fresh-food-russia-2016/photo.php

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Convenience and quality in Belarus

Rublevskiy operates more than 70 convenience stores in Belarus

“Our company operates through 70 Rublevskiy brand stores”, said Tatiana Petrashkevich, head of the import department.

“The first store was opened 15 years ago in Minsk, and since then we have continued to develop the convenience store format, opening new shops in Minsk and in other Belarusian cities”.

The retailer offers fresh products and other fast moving goods to local residents, based on good quality and reasonable price. “The price/quality ratio has become the hottest issue recently due to the difficult economic situation,” Petrashkevich said. “That is why we are optimising all our work processes.”

More direct imports As a result, the retailer tends to import directly from producers, skipping the intermediaries.

“We have already begun to import fruit and vegetables from the producers of Poland and Turkey; now, when the stone fruit season begins we hope to find partners in Spain. That is why we are glad to participate in the Fruit Forum in Barcelona organized by PRODECA (the organisation promoting products from Catalonia).”

Rublevskiy is a socially-oriented retailer: the company offers special loyalty programs for retired people and participates in sponsorship programmes for non-commercial organisations. The retailer has a staff of over 4,000 employees.

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The Russian embargo and Turkey’s fruit and vegetable exports

In 2014, 43% of all the volume of tomatoes exported from Turkey went to Russia (336,000 tons).

Since January 2015, Turkey had exported to Russia food valued at $1 billion, or 4% of all Russia’s food imports, according to Russian Customs statistics.

The leading export products were tomatoes (292,800 t) and citrus fruit. Russia also imported grapes (68,000 t), peaches (26,000 t), apricots (28,800 t) and other fruit.

During the fruit season, the share of some Turkish products (for example, citrus) reached 50%.

In 2014, 43% of all the volume of tomatoes exported from Turkey went to Russia (336,000 tons).

“We can substitute Turkish tomatoes with those from Iran, Morocco, Israel, Azerbaijan and Tajikistan,” said Aleksander Tkachev, Russian Minister of Agriculture.

As for Turkish citrus fruit (250,000 tons imported in 2014), they can be substituted by ones from the RSA, Morocco, China, Argentina, Israel, Abkhazia and Georgia, he said.

It is possible that the embargo for Turkish tomatoes, in particular, will lead to price rises; however it is unlikely that the prices will be higher than last winter. In January 2015, 1 kg of tomatoes cost about $3; if it costs more, the demand will slump.

The government has ordered the Ministries of Trade and Agriculture to track price trends; and the Ministry of Agriculture to see how it can support Russian producers.

At the same time, the embargo does not extend to some specific products, such as lemons, lettuce, figs, etc.

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WorldFood Moscow reveals evolution of Russia’s food market post embargo

The 24th WorldFood Moscow exhibition took place in September and demonstrated the urgency of the exchange of the experience and advanced technologies of the leading world producers.

The 24th WorldFood Moscow exhibition, held in September, showed the urgency of the exchange of the experience and advanced technologies of the leading world producers.

More than 1,520 companies from 62 countries participated in the exhibition, which covered 54,600 m2. Half of the exhibitors were Russian companies.

WorldFood attracted 30,981 visitors, among them various leaders from the federal and local government, plus the heads of government authorities, industry associations, foreign missions and brand associations, as well as other guests of honour. More than 70 Russian and foreign journalists covered the event.

The national pavilions at the exhibition spanned 37 countries. Visitors to these could not only discuss professional matters, but get to know the country’s culture, hear its music and try its cuisine.

Numerous business events also took place In the framework of the exhibition. Conferences about the Russian food market, the fresh fruit and vegetables sector and the cooperation of producers with the retail sector were attended by 640 delegates. Leaders from Russia’s agriculture ministry, Rosselkhoznadzor, and from industry associations and large companies were among the speakers.

The 25th edition of WorldFood Moscow will take place in September 2016.

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Success in China for Aussie grape growers

Growers in the Australian Table Grape Association have nearly tripled their exports to China since 2014, with the volume rising from 7,000 tons to 20,000 tons.

Growers in the Australian Table Grape Association have nearly tripled their exports to China since 2014, with the volume rising from 7,000 tons to 20,000 tons.

The association, which represents grape producers across Australia, reports that of total production of 160,000 tons, 90,000 are exported. The main markets are Hong Kong, Malaysia, Indonesia, the Philippines, Singapore, Vietnam and other Asian countries.

“We also export our fruit to Japan and Korea; these markets have been expanding,” said Jeff Scott, the association’s CEO.

Talking about the growers’ success in selling grapes to China, Scott said the association has been participating in China FVF since its launch six years ago. “And three years ago our countries signed a relevant protocol, and we started to ship grapes to China. Now that country is the most rewarding market in terms of volume, because Chinese consumers like the taste and appearance of our grapes, and sales keeps growing, although the price is higher than for their domestic grapes.”

Australian Table Grape Association