Russian sausage market
Russian meat production market is developing quickly and has very steady growth trends. Meat industry has always been one of the most important.
Values of its development are the subject of acute attention from the state because they are a kind of indicator for the population's purchasing ability. It is not a secret that the growth in life level leads to the growth in meat production demand and the fall in bakery production.
Sausage holds one of the key positions in meat market. By the end of 2014, sausage consumption per capita in Russia has reached 17.6 kilos. At the same time, it's worth noticing that the highest consumption level is seen in the most populated and economically developed regions.
There is quite focused specialization by groups of goods at the sausage market, but each group has its target audience and development specifics. Firstly, it is usual to highlight the production of everyday demand (frankfurters, French sausages, cooked sausages etc.) and the production of unsteady demand growing on holidays, such as delicatessen.
Thus, if we talk to the demand structure at the Russian sausage market, we can notice the significant domination of cheaper production. At the same time, experts forecast the strengthening of this trends this year because of the rise in sausage prices linked to the ruble devaluation and the implementation of the food embargo.
Together with that, if we talk to the industry specifics of Russian sausage market, it's worth noticing that its stabilization by production dynamics of the recent five years is seen: the growth/ fall rates vary from 2 to 3.5%, which shows quite stable demand for national production from the population.
If we talk of the market segmentation, it's worth noticing that sausage production (minced production among it) is the most popular with the market share of 64%, and the production volume for this kind has increased by 5% by the end of 2014. On the other side, the volume of smoked sausage inner production has fallen by 0.24% by the end of last year.
Another important circumstance is that the most of the sausage market is occupied by national companies. The imports share in the total inner production volume is not more than 2-3%, so the food embargo shouldn't reflect much in the supply volume and would mostly touch the premium class production.
By the end of 2014, the total sausage inner production volume is 2.5 million tons, which is 3.12% more than by the end of 2013. As a reminder, the growth rates of inner production by the end 2013 have shown negative dynamics and have fallen by 2,4%.
By the end of 2014, Russian sausage market volume (taking into count the outer trade volume) has reached 2,541 thousand tons in natural terms and 1,161 billion rubles in money terms. At the same time, by the end of last year the market has grown by 26.5 in money terms (in rubles) with the growth by 3.1% in natural terms. Such value difference can be explained by the ruble devaluation, the food em bargo implementation and the rise in prices for raw materials, as a result.
By the end of 2013, the total output of top 10 Russian sausage manufacturers has reached 43.3 billion rubles, having grown by 20% compared to 2012. But the situation is not so clear. Thus, three companies of the top ten have negative net profit dynamics together with the positive dynamics for income, which can show the outrun growth rates for production prime and other costs. There are 2,123 companies registered in Russia. The top ten companies by output in the industry are presented in table 1.
Table. 1. Biggest russian sausage producers, top-10
Cherkizovsky meat-processing plant, LLC is the absolute leader in Russian sausage production market. By the end of 2013, the company's output has reached 18.4 billion rubles which is 60.35% more than by the end of 2013.
For 2014, sausage production imports volume to Russia has fallen by 4% in natural terms compared to 2013 and reached 50 thousand tons. The negative dynamics can be explained by the implementation of food embargo in August 2014. At the same time, due to the ruble devaluation, the im ports volume in money terms have grown by 53% compared to 2013, reachinf 9,669 million rubles (rate for the end of 2014).
Belarus is still the biggest sausage production importer to Russia. At the same time it could strengthen it's positions at the Russian market using the political and economic situation. Thus, by the end of 2014, the share of Belorussian im ports has reached 81% in money terms compared to 57% a year before.
By the end of 2014, sausage production exports volume has reached 36 thousand tons, which is 2% less than in 2013. At the same time, in money terms, there is growth (in rubles) by 54%, due to the ruble devaluation. Thus, by the end of 2014, Russian sausage production exports volume in money terms has reached 5 billion rubles (rate for the end of 2014).
The biggest importers of Russian sausage products are post-Soviet countries, such as Kazakhstan (86% in money erms and 36% in natural terms), Abkhazia (7% and 1.4% in money and natural terms correspondingly) and Azerbaijan (5% and 2% in money and natural terms correspondingly)).
From January 2014, sausage prices show record growth rates. The price maximum was seen in December 2014. Thus, the average price for sausage products for the end of 2014 was 495.76 rubles per kilo, which is 29.87% more than in the similar 2013 period.
At the same time, the inflation changes have mostly touched the prices for cooked and cooked smoked sausage which belong to low and middle price segment. Thus, the average price for cooked sausage by the end of 2014 has reached 310/54 rubles per kilo, which is 18.84% more than in the similar period in 2013.
Together with this, it is worth noticing that until the end of the year the price dynamics has slowed its growth, which can be a sign of price stabilization at some level after the implementation of food embargo and the ruble devaluation last year.
Источник публикации: журнал Мясная сфера, №2 (105) 2015