Chocolate industry spears opportunities in booming Russian market

By Lindsey Partos

- Last updated on GMT

Related tags: Chocolate confectionery market, Russia, Chocolate, Fudge

Two major confectionery players have this month announced inroads into Russia, demonstrating that cocoa ingredients suppliers and their customers are seeking to spear fresh wins in Russia's emerging, and burgeoning, confectionery market.

Leading pod-to-pallet chocolate player Barry Callebaut has unveiled its latest chocolate academy in Chekhov, Russia, while confectionery and chocolate maker Ferrero announces it will break ground on a €91m chocolate facility in the country.

Both firms will tap into a surging Russian chocolate confectionery market expected to grow annually, on average, by a considerable 15.3 per cent in value and 5.4 per cent in volume between 2007 and 2012, according to figures from market researchers Euromonitor.

These healthy figures shadow the diminutive 2 to 3 per cent growth rate for the global chocolate market.

Mirroring the same pattern as China, as consumer spending power increases, so does the desire for goods. According to investment bank Lehman Brothers, in 2002, Russians earned about $160 per month, while today they earn $540.

Zurich-based Barry Callebaut, said its first chocolate academy in Russia will offer "a diverse range of seminars, demonstrations, theoretical courses and practical workshops"​ designed "to inspire"​ a range of chocolate users, including confectioners, bakers and caterers.

“We are on track to triple our sales in Russia within the next three years,"​ said Filip De Reymaeker, vice president Eastern Europe at Barry Callebaut.

Adding that growth in the chocolate market in Russia is defined by a shift in consumer preference "towards high-quality premium products",​ De Reymaeker added that the academy can respond to the trend "by helping chefs enhance their chocolate-making skills."

"Russia’s middle class is expanding rapidly – also outside the urban centres of Moscow and St Petersburg. This is leading to a strong increase in the country's overall chocolate consumption,"​ he continued.The training centre is located on the premises of the Barry Callebaut chocolate factory in Chekhov, 60 km south of Moscow.

This latest opening brings the firm's network of academies to twelve. Prior to Russia, in July the company announced a chocolate academy opening in India.

Delving deeper into the booming Russian confectionery market, Russian media Arturo-Maria Cardelus announced that German construction company Hochtief said it would be building a € 91m chocolate factory for Italian confectionery maker Ferrero in Russia.

According to local media reports, production is expected to be up and running by the end of 2009.

General Director of ZAO Ferrero Russia is quoted as saying Russia was Ferrero's fastest growing market. "Ferrero is successful in numerous regions all over the world,"​ said Cardelua. "But building the factory in Russia underscores our commitment to becoming firmly established here in the long term."

And in an interview with the UK's Financial Times earlier this month, US confectionery group Mars said Russia will soon be its third-biggest chocolate market after the US and UK.

Related topics: Emerging Markets, Markets, Chocolate

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