Russian juice market analysis

Transcription

1 Russian juice market analysis

2 Russian concentrate market Concentrates increases in off-trade RTD volume by 3% and in off-trade value by 14% in 2011 Powder concentrates increases by 1% in off-trade RTD volume terms during 2011, while liquid volume growth is higher, at 3% The average retail unit price of concentrates increases by 13% during 2011 Local manufacturers remain the leading players in concentrates and no significant changes occur in the competitive environment during 2011 Concentrates is set to increase in off-trade RTD volume at a CAGR of 5% over the forecast period Three key players in liquid concentrates in Russia: Tekhplastservis ZAO, ANP OOO and Abriko TD OOO Liquid concentrates is led by Tekhplastservis ZAO with its Tekhplastservis Sirop brand The company retained its leading position in 2011 due to its effective promotional strategies. The manufacturer positions its syrups as healthy products which contain herbs and vitamins Market size concentrates, F 2014F 2015F 2016F Source: Passport by Euromonitor International Company shares (by National brand owners) concentrates, Retail volume, % ,8 1,6 1,4 1,2 1 Total value RSP - mln rub Total volume - mln litres and contain no preservatives 4,5 3,2 3 National brand owners and their brands Company name (NBO) Brand (GBO) Abriko TD OOO Abrico ANP OOO Pikanta Tekhplastservis ZAO Tekhplastservis Sirop Source: Passport by Euromonitor International 89,3 Source: Passport by Euromonitor International Tekhplastservis ZAO ANP OOO Abrico TD OOO Others

3 World juice market World juice market grows steadily over the last five years Orange juice production is the largest segment of the market Among top orange juice concentrate producers are Brazil, tons; USA, tons; EU, tons; Mexico, tons; China, tons; and Australia, tons (2011) In Europe, France is the largest producer of juices of all types; in 2011 juice sales totaled 1,6 bn liters Most Europeans prefer pure juices (50%), then come juices restored from concentrate (30%) and nectars (20%) Most juices in Europe are sold in supermarkets (63%) and discounter shops (26%); 11% of juices are sold in bars and restaurants Large international companies like Pepsi Co. and Coca-Cola make up a considerable part of world s juice market World s greatest juice-only producers (2011) Company Name Sales, US m Market Cap, US m Location 1 Ocean Spray Cranberries Inc. 1,611,24 - USA 2 China Huiyuan Juice Group Ltd. 593,16 533,79 China 3 China Haisheng Juice Holdings Co. Ltd. 326,60 86,14 China 4 Jamba, Inc. 226,43 189,13 USA 5 Yantai North Andre Juice Co. Ltd. 213,30 176,73 China 6 SDIC Zhonglu Fruit Juice Co., Ltd. 180,94 313,82 China 7 Sun-Rype Products Ltd. 144,49 68,43 Canada 8 China Tianyi Holdings Ltd. 102,65 179,29 Hong Kong 9 SkyPeople Fruit Juice, Inc. 84,02 74,23 China 10 The Apple Rush Co. N/A 0.00 USA Global juice consumption dynamics, billion liters / year Source: Factiva Juice consumption in various countries, liters per capita, , ,8 37, Canada Germany USA Russia Denmark Italy 39 40,1 41, Source: D&B, FactSet Research Systems Inc. Note: Based on publicly traded company data. Source: Factiva

4 Russian juice market: overview In Soviet times, cheap pure juices of local origin dominated the market After collapse of the Soviet Union, juice industry based on local fruit and vegetable production quickly degraded Since 1992, new companies were established, which used European package and juice production technology In 2012, the Russian juice market ranked 4 th largest in the world after USA, Germany and China All juice production in Russia is divided into juice, nectar, and juice drink categories The Russian juice market showed modest 3% volume growth and 12% value growth in 2011 The fastest growth area was to be found in Nectars, with unfrozen nectars up to 12% in volume terms. Unlike nectars, reconstituted 100% juice showed substantial 8% volume decline. Juice drinks volume growth reached 9% in 2011 Most popular juices in Russia are: apple (18%), orange (13%), peach (11%), tomato (8%), and multi-fruit (14%) According to the Russian Statistics Bureau, average price of 1 liter fruit juice equaled in 2011 US$1,6; average price corridor lies within US$1,2 and US$1,8; the highest prices are in the Far East Over the last 10 years, juice prices grew at 16% CAGR, in 2001 and 2010 prices stagnated Leading importers of juices, nectars and juice drinks supplying products to Russia, 2011 Source: DISCOVERY Research Group The Russian juice market broken down by segment, 2011, % Source: Russian Union of Juice Producers

5 Russian juice market in details (1) In 2004, customs duties for juice concentrate were lowered from 15% to 5%; this lead to production growth of restored juice Imported juice makes up a small share of the market - no more than 2% of the market; imports of cheap price segment come from Ukraine and Kazakhstan. More expensive products of premium segment imported from Netherlands, China, Israel and Poland Juice imports in 2010 evaluated at US$340 million, or 49,5 million liters. Juice imports in 2011 evaluated at 50,1 million liters Juice export in the period ranged from 2% to 4% of the market. In 2010, Russian exports of juices and nectars was 49,5 million liters and In January-September 2011 was 50,7 million liters. In general exports are to CIS countries Sales of juice products are characterized by pronounced seasonality: from December to April the demand increases by a total of 40-50%, and in the summer the demand is reduced In the dynamics of sales, according to retail audit company AC Nielsen, in the last two years have also seen a positive trend. After a decline in sales by 10,5% in 2009, in 2010 sales rose by 6,5% and in 2011 by another 1.8% Critical factors in selecting juice, % Source: COMCON. TGI-Russia (Russian Target Group Index) Sample: Russia, cities with a population of 100 thousand people or more. Age 10 years or older, consumers of juice Juice consumption growth, % Source: COMCON. TGI-Russia (Russian Target Group Index) Sample: Russia, cities with a population of 100 thousand people or more. Age 10 years or older

6 Russian juice market in details (2) Average juice consumption per capita in 2012 totaled 20 liters There are differences by region: Moscow people drink nearly 25 liters of juice per year Top juice consumption regions are Moscow, Saint Petersburg, Siberian and the Far East; in these regions over 70% of people drink juices The least juice consumption was recorded in Southern regions (less than 57%) In 2010, market size equaled to US$5,9 billion, with annual growth at 2,9% In terms of quantity, the market exceeded 3,1 billion liters Market dynamics of juice products in in terms of value, billion dollars. Number of people buying juices, Russian regions, % Source: COMCON. TGI-Russia (Russian Target Group Index), 1 half 2011 Sample: Russia, cities with a population of 100 thousand people or more. Age 10 years or older Market dynamics of juice products in in real terms, billion liters. Source: "Market Analysis", according to industry sources during Source: "Market Analysis", according to industry sources during

7 The Russian market of juices and purees for kids In contrast to the adult juices market, baby food market has no concentration of shares in the hands of small number of producers Market shares of the major producers in the category of "children's juice" in 2011,% Baby food market is considered promising for growth, but not so capacious. The main trends on the Russian market of juices and purees for kids: Large Russian and foreign companies are launching new innovative products on baby food market Smaller producers leave from the market The baby food producers increase marketing budgets Companies that produce low-quality products or used for packaging bottles and cans in the old form or not involved in marketing to promote products leave from the market Source: "Market Analysis" Market shares of the major producers in the category of "children's mash" in 2011, % As for the food market, there is a search for new forms of packaging, packaging with new properties (convenient and hygienic covers, various capacities from 100 to 250 ml) and new products for children (soups, puree based on cereals, meat, fish, various teas, a children's water, jelly and so on) Major juices producers release food for kids in carton Source: "Market Analysis"

8 Leading players on the market Major players on the Russian juice markets are international companies PepsiCo and The Coca-Cola company. The total market share of these two giants reached almost 80% in volume terms; they acquired local producers in Wimm-Bill-Dann and Lebedyansky used to be public companies, they were delisted after acquisition by Pepsi Co. The only local producer Sadi Pridonya (meaning "gardens of the Don river") accounts for 7% of the marked; it produces pure juices Other smaller producers are Interagrosystems (3,8% of the market) and Sunfruit (4,5%); they are based in the Southern region The market broken down by producers in terms of value, 2011, % Source: "Market Analysis" Company Some popular brands Total number of brands Controlling shareholder OJSC "Nidan Juice" Да, Моя семья, Сокос, Caprice 6 European refreshments (wholly owned subsidiary of The Coca-Cola Company) CJSC "Multon" Nico, Rich, Добрый 6 The Coca-Cola Company OJSC "Lebedyansky" Тропикана, Я, Тонус, Фруктовый сад 11 Pepsi Co. OJSC "Vimm-Bill-Dann" 100%Gold, Любимый, J7 19 Pepsi Co. OJSC "Sady Pridonya" "Сады Придонья", "Золотая Русь", "Мой" 5 OJSC "Sady Pridonya"