10 years ago, in 2014, a food embargo was introduced on dairy products

Back then, in August 2014, the most common comments about the ban were: “The embargo will be lifted soon,” “This can’t happen,” “We won’t be able to produce that much,” “There can’t be Russian Camembert,” “There will be empty shelves.”

Now, 10 years later, we can safely say that all these fears were not justified.

The session, dedicated to key trends in the development of the dairy industry, was attended by:

Svetlana Bobrova
Director of Business Development
Nielsen

Polina Tyurina
Director of BigData Product Development
Evotor

Ekaterina Durr
Brand Director of HoReCa
EkoNiva

Irina Vedenetskaya
Ambassador of the Association of Dairy Producers in the Northwestern Federal District, co-founder of the Dairy Industry Marketers Club, co-founder and CEO
Labelmen

Maria Selivanova
Member of the Board of Directors
"Aton-milk products" & "RENAR"

Elena Vorontsova
Manager and consultant of food and retail projects, director
FoodRetail.Club

Over the years since the introduction of restrictions, milk production has grown by 46%. This happened largely due to support measures: preferential lending, CAPEX compensation for the construction of companies, as well as a large freed-up market share.

In the cheese market, the share of imports during this time decreased from 56% to 29%, while production increased by 132%.

In dry whey, the share of imports before the embargo was 68%, and now it is 20%, domestic production has increased by 220%.

In the butter market, imports accounted for 38%, over 10 years this figure has dropped to 25%. Butter production has grown by 45%.

Dependence on imports in the dry milk category was 69%, now it is 23%. Production has increased by 99%.

These figures show that the market has successfully adapted to the introduced bans, but now we are faced with a new wave of sanctions and the resulting technological restrictions, disruptions in supply chains, and a packaging crisis.

In addition, there remains a high level of import dependence throughout the entire production chain: equipment - 60%, livestock breeding - 50%, agricultural machinery, construction materials, feed additives, spare parts and components - 50%, seeds - 37%, plant protection products, packaging - 40%, veterinary drugs - 55%, technologies - 70%.

Svetlana Bobrova , Director of Business Development at Nielsen , spoke about trends in the dairy market.

Traditional dairy products now occupy more than half of the market (52%), modern ones - 19%, but they are developing three times faster. Cheeses occupy 29%.

The growth rate of sales in physical terms has noticeably accelerated over the past year, meaning that the market is growing due to demand.

At the same time, there is a reduction in product range in many categories.

The dynamics of sales of private labels is accelerating. The exceptions are the largest categories of private labels: pasteurized milk, butter, cottage cheese.

Traditional dairy sales are gradually recovering after a decline in 2023. At the same time, the online channel continues to gain importance. The share of online sales in the industry increased by 1.3 pp over the year and reached 4.5%.

In the category of traditional dairy products, the share of promotions is decreasing.

One of the notable features of the current market situation is that each category is developing its own unique trends. For example, in the pasteurized milk category, preferences are changing in packaging (more and more the choice falls in favor of plastic bottles), volume (towards larger ones) and fat content (towards fattier ones).

The most dynamic growth is observed in the category of modern dairy products. The development of individual trends in categories is also observed. Thus, in the category of thick yoghurts, the demand for larger packages, lower fat content is growing, and there is an increase in preference for yoghurts without flavor additives.

The cheese market has also moved towards developing natural sales. Soft cheese turnover is growing the fastest, seven times faster than the average growth rate. The share of online sales in the cheese category is the largest — 5.3%. A noticeable trend in cheeses has been the growth of the processed cheese segment, especially chocolate.

As for the portrait of the buyer of dairy products, here, according to Polina Tyurina , Director of Product Development at BigData Evotor , it is impossible to single out clear socio-demographic characteristics. However, in this category, there is a clear division into high-priced buyers (16%), who are ready to overpay, and regular (84%). At the same time, buyers with a higher check prefer select milk, while regular buyers more often stop at traditional fat content (2.5 and 3.2).

Ekaterina Durr, a representative of the leading raw milk producer EkoNiva, spoke about the experience of vertical integration . In 2021, the company began producing cheeses and was faced with the fact that not all milk is suitable for cheese production. It is the fact that the company implements the “from field to counter” concept that made it possible to select and develop class A milk suitable for cheese production.

Irina Vedenetskaya , ABCR Ambassador in the Northwestern Federal District, co-founder of the Dairy Industry Marketers Club, co-founder and CEO of Labelmen , spoke about consumer trends in the category . In general, the market is characterized by both specific and global trends.

Among the global ones, Irina noted the following: food for mental health, a mix of flavors and textures, dairy products for weight maintenance, high-protein products, and a willingness to overpay for a quality local product.

The Russian market is characterized by the following consumer behavior trends:

// Traditional dairy products
// Trust in products from dairy regions
// Convenient packaging that preserves taste and quality
// Interest in farm products
// Snack on the go
// Lactose free products
// Fast cooking
// Conscious consumption
// Eco-friendly packaging
// The most important values: health, family, children
// Promotion addiction
// New consumer experience, pleasure
// Lots of protein
// Plant product
// Additional benefits
// Good for digestion

Generational preferences are also changing. Thus, generation X chooses the No. 1 brand on the market, is loyal to local producers and prefers mass varieties and types. Generation Y is guided by the emotional aspect of the brand, craves variety and pays attention to the composition. But the youngest generation H is looking for originality and, in addition to naturalness, pays attention to the environmental friendliness and social responsibility of the brand.

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