Russian food market in May 2020. Results of two-months lockdown (due to virus) and future prospects.

On May 12, Vladimir Putin officially eases lockdown restrictions in Russia. However, each of 85 Russian regions can introduce additional measures to combat the virus if necessary. Officially, the lockdown lasted for 1.5 months, but in fact it was two full months. Let me briefly summarize all the consequences and share with you the most important information about the Russian food market.

During lockdown period only banks, pharmacies and food stores were allowed to work. People were asked to stay at home and avoid going out. Therefore, restaurants and cafes suffered the most within the food sector. Grocery stores feel the best.

Food companies that worked for HORECA segment had significant losses. On the contrary, companies that worked with small and medium-sized wholesale customers, food retailers and federal food chains had huge profits.

During lockdown Russians could go out only to food shops and only to the closest stores. When shopping for food, they bought much more at a time than before in order to reduce the number of times they went out for shopping. So, the average check in food shops in Russia grew by about 30%. What did people buy during lockdown period in Russia?

According to statistics, Russians mainly bought cereals, canned goods (meat, fish and vegetables), pasta, bread, dairy products, vegetables, fruits, and greens. Sales in this food category grew by an average of 20-40%

The same level of sales was in such categories as tea, coffee, juices, water, sausage, cheese, sauces, eggs, freeze and chilled meat, chicken, fish. Confectionery (cookies, chocolate, sweets) and ice cream also remained unchanged since these products are among the most beloved ones, so Russians do not save on them.

Sales of sports food and food for pets remained unchanged. The athletes could not violate their regime, and the life of domestic animals did not change much due to the lockdown.

Sales fell the most for the following categories exotic alcohol, craft beer, and all sorts of delicacies (such as salted fish or smoked meat).

As you can see, during the lockdown period Russians preferred healthy food. I should clarify a bit about the alcohol. Alcohol is a part of Russian culture and an important part of food for Russians.

So, as I mentioned above, only the sales of “exotic” alcohol dropped: limonchelo, sherry, bourbon, brandy, whiskey. The sales of vodka, wine and beer increased. For example, vodka sales rose to 5% in just two months even though alcohol cannot be sold on-line. If online sales of alcohol were allowed, sales of vodka and beer would have grown even more.

Wine is a more festive drink for Russians, but we can drink vodka simply while having lunch or dinner. Beer is a simple substitute for water to quench your thirst. Regular beer sales grew by 3-5%, but sales of craft beer fell by 73% since craft beer suppliers had always focused more on НОRECA segment.

If someone thought that sales growth of 3-5% is a little in two months, then I can say that sales of clothes and shoes fell by 90%, sales of cars by 78%, purchase of apartments by 99%. Therefore, I believe that even a 3% increase in profits is better than a 90% decrease in sales.

To sum up I can say that the stress test of food sales during the lockdown period showed that tastes of Russians did not change and most probably will not change in the near future. There are types of foods that Russians did not save on even in this difficult moment because these foods are a part of habits and historical traditions of food in Russia.

There are types of foods that in difficult times were not “essential” for Russians. So, such food producers certainly need to think more about future marketing. Smart food companies have learnt their lessons from this lockdown period, and now they will differentiate their sales and diversify their future customers.

Yours faithfully
Aleksander Sinyansky
Business Adviser on the Russian Food Market

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