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Knowing a new market Overview, trends, requests
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Brief summary
Russian fresh fruit market: data, forecast, trends
Most popular fruits
Wholesale trends
Retail trends
Brazil exports to Russia
Competition and ideas for exporters
JFresh – about the speaker
16 slides only!
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Fresh fruit import to Russia, thousand tons 2009 to 2010 +10% growth Brazilian imports: 0.4% in 2008 down to 0.25% in 2010
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Fresh fruit import to Russia General trends and 3-5 year forecast
Recession in 2008 influenced the market with 1 year lag and led to 5% import drop in terms of volume after 3 years of constant growth
In 2010 the market has recovered in terms of volume, not value
Full year (2011) volume growth +10%. Focus on conventional fruits, exotics have decreased
Per capita consumption ~53 kg/year, 74% (39 kg) – imports, 26% – domestic produce.
Organic growth – should be not more than 3-5% yoy (+3 kg p/a)
2015: 6 500 - 6 600 thousand tones of imported fresh fruit, 47 kg per capita
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Consumer preferences
Are not changing significantly over last 5 years
Recession had increased the share of conventional fruit – citrus, bananas, apples
Only apples and pears may be partially replaced by domestically grown varieties
Exotic fruits refer to higher culture of consumption
Exotics have periods of higher demand
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Wholesale trends
Affordable and variable logistics: import starts from 1 40’RF, not from one fully loaded conventional vessel
The amount of importers is growing (over 1000 companies), standalone leader can’t be distinguished. At the same time, top-15 can be named. Many import operators work via brokers
Top-5 “control” 16% of the import market; top-15 “control” 30%. Leaders depend on destination/specialization
Lot’s of small companies, providing service for retail from Europe. Bigger companies operate on further destinations
Demand for consignment deals in sector of conventional fruit
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Retail trends
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Retailers in Russia
Have doubled the amount of modern stores within last 5 years
Top-5 control 33% of industry turnover; top-10 control 40%. The market is still fragmented, but concentration increases
Have increased quality standards and tolerance levels
Are thinking of launching own import programs. Or at least aware of the FOB/CIF prices. MAGNIT is one of the biggest importers with own banana and citrus import programs
Try to dictate prices to importers on the basis of “shelf price�
Anyway, retail is the most common and desired client for most importers
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What we know about Brazil
Why not these fruits?
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Key fruits varieties from Brazil Volume of imports, 2010, kg
Share in total import
Mango
4 881 813
35.0%
Apples
3 313 079
27.3%
Limes
2 095 055
15.0%
Melons
1 283 385
9.2%
Grapes
935 799
6.7%
Watermelons
593 361
4.3%
Papaya
168 466
1.2%
Pineapples
106 944
0.8%
Avocado
92 607
0.7%
Other
484 158
3.5%
Total
13 954 667
Variety
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Dynamics of sales of exotic fruits (one hypermarket in SPb), kg 70 971
52 736 46 284 39 371
38 047
2005
2006
27 910 16 863
2003
2004
2007
2008
2009
26 855 25 361 24 233
18 979 16 935
17 396
2004
2005
6 904
2003
2006
2007
2008
2009
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Competition, threats, ideas
Consumption of exotic assortment is very vulnerable to recession
Demand from wholesalers depends on demand from retail. Retailers don’t make planning in exotics sector
Key characteristic for retail – long shelf life
European producers are offering similar products
Cost of labor is increasing
Air freight is expensive, sea freight – too long
Ecuador, Peru, Chile – developing exotics sector
It’s very important to find a partner, that has regular sales to retail
It might be good to use Europe as the turnover point for products. It also diversifies the possible markets
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Varieties, sizing, packaging
Russian consumers prefer bigger sizes of most fruits
Fruit
Easy peelers are the only fruits preferred small Wholesalers are ready to accept smaller fruit (or even 2nd category) if the difference in prices is significant Expensive fruit should be looking accordingly
box
optimal
Apples
18 kn
60-70-80
Pears
18 kn
60-90
Lemons
18 kn
88-113
Oranges
15 kn
64-72-88
Mandarins
10 kn
4-5
Red Globe
8.2 kn
L-XL-J
Thompson
8.2 kn
19.0+
Kiwi
10 kn
24-30
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Varieties, sizes, packaging how to teach consumers to distinguish varieties?
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JFresh
One of the biggest importers of conventional fruits
Wide regional presence
Long history
Experienced management
20-25% sales to retail
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Thank you! Dmitry Gerasimov JFresh dger@jfresh.org Skype: dimasgera