We sum up the preliminary results of 2024 and assess what situation will develop on the Russian food market this year

Analytical data on the results of 2024 on the Russian food market are just beginning to appear, but it is already possible to draw preliminary conclusions and make forecasts on how the industry will develop in 2025.

Production and sales of food products

In 2024, food production developed in different directions from category to category. For example, the production of meat, vegetable oils, sugar, confectionery, soft drinks increased, while the production of bakery products decreased. According to the assessment of the information and analytical agency INFOLine, at the end of the past year, the dynamics of food production in comparable prices increased by 4-5%, and the dynamics of beverage production - by 6-7%.

As for the retail food market, it recovered in 2023 and increased by 4% after a 2% decline in food consumption in 2022. According to preliminary estimates of the Federal State Statistics Service (FSSS), by the end of 2024, physical volumes of food sales increased by 4–6%.

Among the main challenges that retail had to face in 2024, the Chairman of the Presidium of the Association of Retail Companies (AKORT) Igor Karavaev highlighted the growth of costs along the entire supply chain, including increased costs for logistics and transactions, staff shortages and increased regulation. And the main drivers of growth were online services, expansion of the product range (for example, due to local producers), new formats (the most dynamically developing today are small "convenience stores") and private labels.

In addition, last year the process of replacing departed international brands with local producers continued. In the first half of 2024 alone, over 3,300 new brands appeared on the Russian market. According to AKORT, the share of Russian food products today ranges from 80% to 99% depending on the category. In fact, Russia is fully self-sufficient in food products. For example, the country is currently supplied with vegetable oil by 226.9%, fish by 163.7%, sugar by 108.5%, meat by 100.5%, and dairy products by 85.9%.

Competition between manufacturers and private labels

Instead of international brands that have left the market, domestic food producers are now competing with private labels of retail chains. According to Marina Volkova, director of analytics and consulting at the Nielsen agency, the growth rate of private labels in food products is outpacing the growth of brands, and the growth of private labels is largely due to the launch of new products.

In five years, the share of private labels in FMCG retail has doubled. According to TASS, at the beginning of 2024, it exceeded 10%, and by the end of the year, the share of private labels in sales at food retailers reached 22%. In addition, today private labels can be found not only in the budget segment, but also in the premium category. At the same time, when buying private labels, the average bill increases by 32%.

Grocery products are the number one seller online

One of the main trends in e-com development in 2024 was the growth of food sales. For the first time, this category took first place online and accounted for 16.7% of the total volume in e-com. According to Igor Karavaev, Chairman of the ACORT Presidium, online sales of food retailers—ACORT members increased by an average of 40% in 2024. According to SberIndex, such categories as “Food Delivery” and “Ready-to-Eat Food” grew by 40 and 30%, respectively.

Despite the fact that the share of online sales in the total retail trade volume in 2024 was only 15.4%, experts from the Association of Internet Trade Companies (AITC) believe that the share of online retail will grow and by the end of 2025 it could take up about 18%. According to a survey of 100 CEOs and top managers of the largest Russian companies in the FMCG market, which is conducted annually by the Nielsen company, in 2025, 56% of manufacturers will focus on online trade, and 48% of retail chain managers plan to increase sales through their online stores, which is almost 3 times more than according to the results of the 2023 survey.

What about the prices?

In 2025, the food market will face inflation that will exceed the average for the economy. In this regard, according to experts' forecasts, the growth in food prices will be 8-12% compared to last year.

For example, prices for dairy products will increase by 10-15%, which is due to increased production costs and a possible shortage of certain types of milk on the market. The increase in prices for meat products will be 12% and will be due to the increase in prices for feed, as well as changes in supply and demand. The largest price increase is expected in the fruit and vegetable segment - by 15-20%. For example, the price of potatoes may be 40 rubles per kilogram, and tomatoes - 150 rubles. This is especially true for seasonal fruits and vegetables, since with the approach of the spring-summer season, the demand for fresh vegetables and fruits increases, but many products depend on weather conditions and crop yields.

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