The retail market is highly fragmented in Russia. However, modern retail formats such as hypermarkets and supermarkets are growing rapidly. Other key trends happening the Russian food and beverage industry include:
- Development of transportation infrastructure to make distribution more efficient
- Capital investment into the food processing industry
- Increased health consciousness due to an aging population and increased awareness of health issues
- Busier lifestyles leading to increased demand for convenience products and fast foods
Russian consumers are price sensitive and have become more conservative with their spending since the global recession.
However, consumers are brand conscious and are willing to pay premiums for particular types of food such as healthier products.
The Hotels, Restaurants and Institutions (HRI) sector is expected to benefit from Russia’s tourism potential. Russia has a variety of natural landscapes and will be hosting the Olympic Winter Games in 2014 and the Football World Cup in 2018.
Developments in the HRI sector are taking place in the largest cities, Moscow and St. Petersburg, as well as tourist cities on the Black Sea such as Sochi.
Regulations
Russian regulations on trade can change frequently, so it is important to check with a reliable source before exporting. Russia is a part of a Customs Union that comprises of Russia, Kazakhstan and Belarus.
The Customs Union develops regulations that are then applied to the three countries.
Import duties generally vary between 5 – 30 percent. Imports will also face a value added tax (VAT) and customs charges. The VAT is usually 18 percent, but some food and health products are taxed at a lower rate.
Imported food and beverage products will require a certificate or declaration of conformity from the government as well as additional permits depending on the product.
Opportunities
With the development of the food processing industry, Russia will be requiring more quality ingredients.
There is an opportunity for New Zealand companies in particular sectors that are lacking domestic supply such as meat, bakery, confectionary, juice and diary.
High income consumers in Russia are becoming more willing to pay premiums for quality products. This is an opportunity for New Zealand companies to position their products as high quality and leverage off New Zealand’s clean and green image.
