Russia Food and Beverage Market Overview
Russia is the largest country in the world by landmass and has the world’s ninth largest population of 140 million people as of 2010.The population is unevenly distributed across the country, with the highest density around Moscow city.ii Due to low birth rates, the population is expected to decline to 139 million in 2011.iii Despite the declining population, Russia’s economy is growing. Russia’s GDP was US$1,548 billion for 2010 and is forecast to grow 4.4 percent in 2011.
GDP per capita is expected to increase to US$12,398 in 2011.iv While low income consumers currently outnumber the wealthy, there is a growing middle class and overall incomes are rising gradually. Most high and middle income consumers are located in the two largest cities, Moscow and St. Petersburg.
Inflation rates have been falling in the past few years, but remain a challenge for the Russian economy. In 2010, inflation was 9.9 percent.For food and beverage products, inflation for the year ended January 2011 was 14.2 percent.
Russia currently imports around 40 percent of its food consumption. In particular, over half of the meat and milk products in large cities are imported.iv Food and non-alcoholic beverage spending accounted for 28 percent of consumption in 2010. The food retail market in Russia was valued at US$225 billion in 2009 and is expected to grow at a compounded annual growth rate (CAGR) of 20.5 percent for the next 4 years.
Volume consumption per person for meat, fish and vegetables are all expected to rise.
