Russian food exports on the increase

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A question of taste: producers and exporters are seeking to increase the profile of Russian speciality foods Photo: Lori/Legion Media

Elena Krivovyaz, Russia Now

12:28PM BST 12 Apr 2012

As Russia's agricultural production increases, foodstuffs manufacturers aim to export more of their products abroad. Russia is one of the major exporters of raw materials to the West but its share of the worlds food imports is less than 1pc. Nevertheless, Russian food manufacturers have grand ambitions to introduce Western customers to their goods. And with the rapid rise in food production in Russia, the potential to expand the market is huge, say experts from the Ministry of Agriculture and the National Union of Exporters. Irina married Paul and moved to Britain from Russia several years ago. She enjoys life in London, but misses her favourite Russian foods such as ryazhenka , tvorog, kolbasa and pelmeni everyday foods for most Russians, but in England they are available in only a few specialist stores in London. Even my husband fell in love with syrki (a sort of iced milk dessert), when we were in Russia, she says. But its unlikely that syrki will be on offer here it is very sweet and I guess could be considered an unhealthy food.
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There are many other foods that are widely consumed in Russia that are very hard to come by outside the former Soviet Union.

There is a strong demand for our grain and we have consistent marketing outlets in many foreign countries, says Dmitry Bulatov, the president of the Russian National Union of Exporters. However, the situation with the supplies of pre-packaged foods abroad is pretty dire. The activities to promote our domestic food products to the external markets leave much to be desired. Although the export of Russian food has been steadily growing over the last decade up from $1.5bn (950m) in 2001 to $7.1bn (4.5bn) last year, the statistics dont tell the whole story. The lions share of Russian food products are traditionally purchased by the former Soviet republics and only around a third or a quarter of these goods are imported by EU and other foreign states.

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Its not surprising that ex-Soviet countries are the main buyers of Russian food as, for many decades, they were a part of the homogenous market. The stable trade relationship between these countries can be explained partly by inertia and shared history. When it comes to exporting food and drink products to the EU member-states, the US and other countries, only a few Russian producers have managed to do so. Manufacturers of alcoholic drinks have had considerable success exporting from Russia. Russian Standard Vodka, available in 70 countries, is one of the more popular drinks sold abroad. Some Russian wines, such as those produced by Fanagoria and Abrau-Dyurso, are sold in Britain, while Baltika beer is exported to Denmark. Alcoholic drinks raise $116.6bn from exports outside the former Soviet republics. Similarly, confectionery is making its way abroad. Products from the Udarnitsa factory are eaten in Norway, and sweets and chocolates made by Belogore go to Finland. But manufacturers of other foods may start exporting soon. We have many outlets in Russia that produce innovative food items, that arent produced anywhere else in the world and could compete outside of the domestic market, says Mr Bulatov. Among them is a type of wheat named Zhitnitsa which is produced by Pava. It has a unique nutritional composition and Pava has big export plans. Another exclusive producer is Wimm-Bill-Dann, a major producer of non-alcoholic drinks and milk products. The company intends to distribute its infant food abroad. Adapting to regulations

The recent survey of Russian food manufacturers and food exporters conducted by the Ministry of Economic Development sheds light on the problems they experience when trying to market their products abroad. Many Russian producers said they experienced difficulties in finding out the regulations for imported goods, such as sanitary and technical requirements. Most of the manufacturers complained that the rules set by foreign markets were very demanding. The EU imposes a wide range of restrictions on food imports, covering wrapping, sustainability, contents, additives and more. US regulations on imports go much further and its regulators often insist on inspecting the production site to check the conditions in which the goods are manufactured. If they are not satisfied with the conditions they may not allow the product to be imported. Many Russian food manufacturers are not properly equipped to meet the restrictions and regulations for exporting outside of the former Soviet Union. The Russian companies should not consider the requirements of western countries for imported goods a discrimination or sabotage , says Mr Bulatov. The food products of domestic European manufacturers meet these standards and fully correspond to them. Therefore, it seems fair that they set the same rules for import as well. The main task here is to assist Russian manufacturers in their attempts to understand foreign markets and their regulations. We should also strive to negotiate with our existing and potential importers about bringing compatibility to our mutual food regulations and their import rules. Promoting Russian food Another obstacle preventing Russian manufacturers selling to western markets is that foreign customers are not familiar with many Russian foods and even the names of these products are usually hard to spell, such as pryanik or ryazhenka. This is because, for many decades, the Russian market has been isolated from the West, culturally and politically. As a result, people in the West are unfamiliar with the national food of Russia. Mr Bulatov says promoting Russian foods at exhibitions and trade fairs could help them gain wider recognition. But he says manufacturers should also pay attention to advertising materials. Brochures, booklets and media kits must be produced in different languages, with clear explanations for each of the countries at which they are targeted. Another fundamental obstacle that both the exporters and the experts point to is the insufficient level of support from the state. A list of various fields of manufacturing that are eligible for state subsidies has recently been published, but the food industry, unfortunately, was not mentioned there, says Mr Bulatov. Other measures that could help the food industry expand include business privilege taxation, promotional bank loans and other forms of financial support. Dmitry Bobkov, press attach at the Ministry of Agriculture, says the role of the national agricultural sector is vital in terms of Russias export potential. We are about to reach the estimated targets for wheat, potatoes, sugar, sunflower oil and poultry production, he says. But targets for meat production will take another three to five years to be achieved. As agricultural production expands, exporting it will be a priority, according to the experts. But for now, Russian food remains the preserve of those living within its borders or those in the former Soviet republics.