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The Russian Baked Goods Market: Looking Back and Looking Ahead
Bread has its special tradition in Russia. Bread puts its stamp on daily living. It is part of every meal. On average, the Russian person eats 100 kg (220 lbs) of bread annually. Roughly 10,000 Russian companies and bakeries produce about 7.7M tons of bread and other baked goods. By comparison, the average German consumes around 85 kg (178 lbs) of bread per year.
Industry Plays a Dominant Role in the Russian Bread Production
Of course, as of today the Russian production methods have not yet reached Western standards. Existing bread providers must modify and optimise their productions, and new production facilities need to be planned and created. International experts provide a great deal of expertise in this expansion. The foremost modernisation goal is a more cost-effective production. Rising energy costs are a strong motivator for investments in up-to-date production technologies.
Meanwhile, the demands of Russian consumers keep getting more sophisticated. Consumers look for quality before they buy. This however is the Achilles heel of Russian bakeries. Their baked goods stay fresh for only a short time and are not suitable for storage. More and more, packaging and freezing baked goods therefore get the lion's share of attention in modernisation plans.
Impressions of a Russian Bread Factory
Russian Consumers are Changing their Preferences
In the preceding 60 years, Russians had but a few choices of baked goods. Bread had taken the place of a basic commodity to be provided for the general population at a low price. The government fixed the price. There was little incentive to create a variety of tasty baked goods.
Recently, consumers have rediscovered their taste for quality baked goods. They demand freshness and variety. International breads certainly add to the variety. Examples are French baguettes and Italian Ciabatta bread. Russians particularly favour authentic breads with a large number of distinct flavour nuances.
Frozen baked goods guarantee freshness. While Western Europeans have long since grown accustomed to frozen baked goods, they are still somewhat of a novelty in Russia. Currently available frozen baked goods are almost exclusively imported from EU countries.
Russian bread providers have not yet embraced the advantages of producing frozen baked goods with long shelf lives using efficient automated production methods. So far, frozen baked goods are only offered to a limited extent to consumers in the metropolitan cities Moscow and St. Petersburg. On the other hand, the habit of crisping bread at home has created an interesting business opportunity for International providers.
The opportunity is tremendous, given the size of the Russian nation and the currently still lagging domestic frozen goods industry.
More and more Russian people now want to make healthy choices. Especially Russians who live in metropolitan areas and larger cities increasingly decide to buy healthy food. Breads containing whole grains, nuts and seeds keep gaining favour with Russian consumers.
To this day, small bakeries offering snacks and take out specialties are rather rare. However, the coffee shop wave is now making fast inroads into the large cities and coffee shops also offering baked goods are no longer quite so rare in the shopping miles. Snacks are the big trend in the Russian baked goods industry.
