Katya Witham
Katya Witham is Senior Food & Drink Analyst, identifying and exploring the major trends across various FMCG categories, giving invaluable insights into the German market.
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While sanctions are shifting consumer focus towards all things domestic, Western food and drink trends are having an effect on Russian consumer behaviour. Russia’s food and drink market has seen a range of turbulent political and economic events that have affected both the industry and the population’s consumption patterns.

FOCUS ON AFFORDABILITY

Declining oil prices and the ongoing tangle of international sanctions have taken their toll on the Russian economy, sending the country into financial crisis. Russia’s worsening economic situation is also having an effect on Russian consumers and their eating habits. Consumers are increasingly shopping around to get the best deals, turning away from higher-end products and towards low-cost offerings. The affordability of food and drink products will remain the crucial factor for Russian consumers against a backdrop of challenging economic conditions.

GOING GREEN

The organic market in Russia is well placed for future growth, given the vast numbers of potential consumers and evolving preferences in favour of healthy eating and high-quality natural products. The absence of imported organic foodstuffs due to Russia’s ban on Western agricultural imports, coupled with consumers’ increasing appreciation for locally made products, will continue to boost domestic organic farming in Russia, providing incentives for the country’s small-scale farmers. However, the absence of a unified organic certification system and clear definition of what exactly constitutes organic food, as well as Russia’s current economic and political environment, will likely be the key barriers for export growth.

FUNCTIONAL APPEAL

Despite a challenging economic situation, the popularity of functional food and drink products continues to grow in Russia, in line with rising health and wellness awareness among Russian consumers. In particular, consumers with higher disposable incomes from Russia’s large urban centres are becoming more interested in fortified/functional food and drink products. This provides new opportunities for both domestic fortified/functional food brands as well as foreign exporters. Moreover, governmental interventions to push health reforms and to promote healthier nutrition habits will encourage Russians to switch to healthy products. This, in turn, will fuel functional innovation and reformulation in order to make the country’s food and drink offering more healthy.

MADE IN RUSSIA

As the Mintel Trend ‘Locavore’ explores, consumers worldwide are increasingly opting for locally sourced produce, driven by growing interest in regional foods and tradition. Moreover, access to local products and services is increasing along with consumer appetite for what comes out of their immediate communities. In Russia, a home-grown food trend is taking hold and helping food and drink brands and foodservice operators that cater to a new appetite for patriotism. The continuing embargo on exports to the country from the West has boosted domestic food and drink production in Russia and has created opportunities for Russian producers to better promote the heritage and tradition of domestic varieties.

NEED FOR SPEED

Despite a high degree of income inequality, the growing consumer base of the wealthier urban middle-class is fuelling demand for convenience foods in Russia. In particular, young people are more willing to spend on convenience products, with their busier lifestyles driving interest in quick meal solutions. However, convenience brands operating in Russia, and in particular international players, should not underestimate this market’s complexity. So a Western approach to convenience may not always be suitable. Culinary culture and tradition are very important in Russia, with home cooking still being a preference of the majority of Russian consumers. While presenting a challenge to convenience foods, the home cooking trend can at the same time be leveraged to better engage with consumers.