Produkty Pitania President Stefano Vlahovic spoke at the Adam Smith 8th Annual Russian Agri-Food Forum
— 2009-11-19 —

According to President of Produkty Pitania Company Stefano Vlahovic, even in economic downturn conditions the Russian FCP market has demonstrated sustainable growth. Despite the growth rates slowdown in 2009 (in natural terms the slowdown was up to 1% and in monetary terms – at about 3%), analysts predict that the market segment will be demonstrating growth in the following two years, which is explained by availability of raw materials, reduced inflation rates, popular income growth and, as a result, increasing demand.
Meat products remain accountable for the major portion of the frozen convenience products market (with almost 45% share of the total FCP segment). However, for the nearest future the most promising segment of this market will be traditional convenience meat products and average- and low-price segment products.
The growth in the meat segment, the largest segment of convenience foods market, is primarily based on the growing demand for chicken meat foods, which have demonstrated strongest growth on the market in the past 2 years. Indicative assessments show that 2009 growth rates in the chicken meat frozen convenience products segment was 10–17% in natural terms, and the average annual growth forecasts until 2011 are indicated at 6 - 8%.
Chicken convenience products account for 48% of the total convenience meat market. Chicken convenience products remain in the most affordable category. Growth in their consumption is twice as fast when compared to growth in consumption of beef, and is 2.5 higher than that of pork (2008 Meat Union data). Company President Stefano Vlahovic observes that 2009 consumption trends indicate stronger demand growth for chicken meat convenience products segment in comparison with growth in demand for other types of meat convenience foods thanks to affordable prices and increasing supply: this market development may provide additional momentum to the segment.
On the whole, effects of the crisis have had moderate impact on Russia’s food market. The downturn resulted in no reduction in frozen convenience products consumption to speak of. Today about 70% of Russians consume frozen convenience products. Even though frozen convenience products purchases have become les frequent, consumers still prefer these products and demonstrate that brand and producer loyalty, quality and taste of products remain key criteria for selection of convenience products. It is clear that in this respect the price component gains additional importance as quality trends go upwards, which is especially true about provincial Russia where the crisis has spurred competitive pressure from local brands and the consumption of cheaper no-name products is growing.
Stefano Vlahovic points out that the development of frozen convenience products segment in the next two years will strongly depend on the population’s purchasing power, expanded supply of affordable products of good quality, imports dependability, general distribution segment improvements and further development of joint efforts in retail.

Analytical data provided by AMI VETRA-Marketing Research Agency.