From 2013 through 2017, the total size of the cookies market in the Russian Federation was constantly increasing and reached 1,470.2 thousand tonnes by the end of 2017, which is 6% higher than the indicator for the previous year. The positive dynamics have to do with consumer demand shifting towards cheaper confections and switching from expensive goods due to reduced household incomes.
Average per capita consumption of cookies has had a stable trend towards growth since 2013, with average annual rates of around +4.5% – in 2013, the indicator equaled 8.4 kilograms per capita, whereas in 2017 it reached 10 kilograms per capita (+19% to 2013).
The share of Russian consumers’ expenditures on cookies in 2017 amounted to approximately 24% of all expenditures on flour and sugar confections. Cookies remain the most popular category due to their affordability, in particular in the low-price segment, in the conditions of declining household solvency in Russia.
Important recent trends in the market include the expansion of cookie product groups and the emergence of products with new flavors, additives, fillings and icing, as well as increasing demand for goods with additional healthy properties (vitaminized or low-calorie dietary cookies) as a result of the ongoing healthy lifestyle trend.
Domestic products dominate the Russian market for cookies – in 2017, their share was as high as 98%. Imports occupy the modest 2% of the market, most of which are supplied from Belarus, Poland, and Italy. Together, the 3 countries account for around 40% of all cookie imports. The share of imported cookies is not expected to actively increase in the medium term.
In the structure of imports by cookie varieties, the largest share belongs to sweet dry cookies (approximately 80% of supplies). In a more detailed distinction, cookies with icing and chocolate-covered cookies combined take up about 35% of imports in quantitative terms.
In turn, exports from Russia in 2017 amounted to around 64 thousand tonnes or cookies, or 4% in the total volume of goods produced. The largest export contractors are Kazakhstan, Belarus, and Kyrgyzstan, accounting for about 60% of exports. In the structure of export supplies, sweet dry cookies are also leading, having the share of 89% in the total volume.
Among Russia’s federal districts, the Central Federal District occupies the largest share in cookie consumption (approximately 30% of the total volume of the Russian market), which is due to demands of Moscow and Moscow region, growth in population, and local wages.
Sugar cookies are the most demanded variety, occupying around 50% of the total volume of consumption. Butter cookies are second in popularity, whereas the smallest share belongs to cracker-type cookies (around 15% of the market).
Russian cookie production was steadily growing throughout 2013–2017, reaching 1,511 thousand tonnes in 2017 (+5% to the previous year). The positive dynamics of Russian cookie output can be explained by stable consumer demand for these confections.
It is expected that in the medium term, steady growth in volumes of cookie production will be maintained, and a gradual increase in exports is forecasted.
The geographical distribution of production facilities is primarily determined by the concentration of effective demand and the proximity of raw material bases. Therefore, the Central Federal District is leading in the geographical structure of cookie production – the region accounts for around a third of the total output volume in the country. The three leaders also include the Northwestern and Southern Federal Districts.
Among the major manufacturers in the industry, one can highlight “Mon'delez Rus” LLC, “KDV Group” LLC, “Obyedinennye Konditery (United Confectioners)” OJSC, “Kellogg Rus” LLC, “Sladonezh” OJSC, and “Konti-Rus” CJSC.
Throughout the period from 2013 to 2016, producer prices for cookies were steadily growing – in December 2016, the price reached the level of 99,477.3 rubles per tonne, which is 39% higher than the indicator for December 2013. In 2017, the average annual producer price declined by 3% compared with the previous year and amounted to 93,443.2 rubles per tonne.
The dynamics of retail prices for cookies have been demonstrating annual growth. For instance, in 2016 it equaled 107% against the previous year. In 2017, the average retail price for cookies amounted to 148.3 thousand rubles per kilogram, which is 2.6% higher than the indicator of the previous year. In January–June 2018, the average retail price for cookies increased by 0.5% to the similar period of 2017, reaching 148.6 rubles per kilogram.
MARKET DEVELOPMENT FORECAST
The volume of cookie consumption in the Russian Federation directly correlates with the demographic situation, consumer preferences and the overall quality of life in the regions.
Up until today, development of the cookies market was taking place against the backdrop of structural shifts – the trend of demand shifting from more expensive chocolate confections towards flour confections with a long shelf life (cookies, waffles etc.) as a result of reduced average monthly salaries and declining retail trade turnover.
The volume of cookie consumption in Russia is expected to demonstrate positive dynamics with average growth rates at around +2.5% per year. As a result, by 2025, the volume of the cookies market in the Russian Federation may have reached 1.8 million tonnes, which would be 23% higher than the indicator for 2017.
It is assumed that the expected growth will occur along with a relative improvement in the socioeconomic situation in the country as well as increasing effective demand. At the same time, positive dynamics in the market will be ensured through Russian manufacturers expanding their product ranges.
Market Research Department