PDF_-5_-_RUSSIA_new_market_for_Brazil

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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