Wine, Beer and Spirits in Russia Report
Executive Summary
Russia is by far the largest consumer market in Central and Eastern Europe, with an estimated population of 138.7 million as of July 2011. Approximately 73% of the population live in urban areas, with Moscow (the capital city), and St. Petersburg as the largest economic and cultural centres. Roughly 10.5 million people, or 7.6% of the Russian population, live in Moscow and its suburbs, while roughly 3.3% (4.6 million) live in St. Petersburg (CIA World Factbook, 2011).
The Russian population is unevenly distributed over the vast country. The Far-Eastern and Siberian Federal Districts cover more than 66% of the total Russian territory, but only account for 18% of the Russian population. Over 26% of Russians live in the Central Federal District, and of these, almost one-third live in Moscow. One-third of the population in the North-West Federal District live in St. Petersburg.
As a whole, Russia has twelve cities that each have over one million inhabitants, and more than twenty cities have more than half a million residents. The sheer concentration of residents in Russia's city centres offers significant potential.
Russia is a sophisticated market and there are opportunities for a wide range of value-added food and beverage products for both high-end retail establishments and foodservice outlets. These opportunities include the wine, beer and spirits sector.
In 2010, the average Russian drank 68 litres of beer, 12 litres of spirits and 7 litres of wine. In comparison, the average Canadian consumed 50 litres of beer, 4.3 litres of spirits, and 10 litres of wine in the same year.
Supermarkets are the largest retail channel for the wine, beer and spirits sector, largely due to sales of low- and mid-priced wines. However, there is also a developing market for premium wines through up-market food and wine speciality stores. The foodservice sector also offers opportunities for expansion.
It is important to note that significant differences in terms of consumer behaviour and preferences can exist from region to region, as well as between city centres and broader provinces. Companies considering entering the Russian market should consider preparing not just one nation-wide plan, but multiple or multifaceted plans to reflect the unique aspects of each region.
There is a growing number of regions that are considered to have high business development potential, including: Rostov, St-Petersburg, Krasnodar, Nizhny Novgorod, Irkutsk, Tatarstan, Bashkortostan, Yekaterinburg, Krasnoyarsk, and Samara.
