Top concerns revealed in Russian chocolate sector

Related tags Cent Confectionery Chocolate Marketing

Our journalist Angela Drujinina brings you the latest
research on Russia¡¯s chocolate market, including producers¡¯
concerns, the market situation and market leaders.

Main Concerns (according to Marketing Advice Consulting​ survey):

92 per cent of producers were worried that their company might choose an incorrect marketing strategy.

More than three-quarters mentioned a decrease in purchasing capacity.

A little less than three-quarters mentioned the negative impact of Ukrainian chocolate imports, yet 70 per cent said they worried about imports from Belarus.

60 per cent feared the appearance of a new strong player on the Russian chocolate market.

42 per cent mentioned rapid raw material price increases ¨C out of which 24 per cent mentioned sugar prices increase and 22 per cent mentioned nuts.

42 per cent of those questioned were also worried about the principle of Soviet assortment in their companies. 30 per cent are worried about Russia¡¯s entrance in World Trade Organisation.

Two per cent mentioned the war in Cot d¡¯Ivoire and its effects on raw material prices. The same proportion also spoke about low chocolate prices in the Russian Federation.

Market Situation

Analysts say that the Russian confectionery market is almost saturated, but that the chocolate market is still expected to grow by 30 per cent up to 2010. The Russian Confectioners Industry association (ASKOND) said the chocolate market was developing the quickest of all, now accounting for about 25 per cent of confectionery market volume.

As for consumers favourites: ACNielsen​ said milk chocolate was most popular in 2004, accounting for 61.4 per cent of products. Second place goes to dark chocolate with 23.9 per cent, while white chocolate has 9.4 per cent and mixed varieties have 5.4 per cent.

Specialists think that the leader in sales is chocolate tablets with different ingredients, such as nuts or raisins. These are believed to make up 41.2 per cent of tablet sales compared to 31.1 per cent for traditional tablets. Third place goes to porous chocolate on 18.8 per cent.

For chocolate packed in boxes, ACNielsen gave first place to chocolate truffle and nougat, accounting for 39.3 per cent of products, with assortments on 25.5 per cent and Souffl¨¦ on 8.6 per cent. Chocolate with alcohol accounts for 5 per cent.

In sweets, consumers are increasingly looking to premium products.The market share of ¡®cheap¡¯ sweets (up to RUR300 for 1 kg) decreased from 84.8 per cent in December 2003 to 76.8 per cent in December 2004. Meanwhile, elite chocolate sweets (from RUR501 for 1kg) increased their share from 6.1 per cent to 8.4 per cent.

Market Leaders:

According to Business Analytika​, 2004 chocolate market shares were as follows: Nestl¨¦ 22 per cent, Krasnyi Okteabri 6,6 per cent, Babayevski 5.2 per cent, Rot Front 5.2 per cent, Kraft Foods 9.5 per cent, Mars 9.5 per cent, 'SladCo (owned by Orkla) 5.3 per cent.

In the segment of chocolate tablets, the leader is Nestl¨¦ with 35.4 per cent. Second place belongs to Kraft Foods with 27.4 per cent and third place belongs to United Confectioners Holding with 14.3 per cent.

In the segment of packed chocolate Nestl¨¦ is again leading with 25.7 per cent. The second place belongs to United Confectioners with 14.4 per cent, and third place goes to §¡.Korkunov with 12.8 per cent.

The segment of weighed chocolate sweets is led by United Confectioners with a 42.3 per cent share. Far below the leader is Nestl¨¦ in second with 11.2 per cent, and third place belongs to Orkla subsidiary SladCo with 9,5 per cent.

Mars is leading the segment of chocolate bars with 66.3 per cent. Then comes Nestl¨¦ with 20.7 per cent, and third place goes to Cadbury with 9.2 per cent.

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