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Methodology
This article is based on the results of a consumer study of the fresh fruit market in Russia, conducted by ACNielsen in April-May 2004. The following techniques were applied to achieve the project’s objectives: secondary information analysis, questionnaire of 50 Russian fruit dealers, personal interviewing of the sample of 2,000 consumers representative of the Russian population of 18-65 y.o. living in cities with more than 100,000 residents.
Imported vs local
Picture 1. Structure of fruit import to Russia, % of organic turnover in January-December 2004 (Source: State Customs Committee)
Bananas, apples and oranges make three major fruit categories imported to Russia; this corresponds with the results of research of Russian shoppers' preferences and urban residents' habits cited below.
Strong demand for apples is partially satisfied by local production, whereas bananas are exclusively imported product. This fact, as well as the popularity of this fruit in Russia (bananas are the second most preferred and frequently eaten fruit after apples), explains its prevalence in the import structure. According to the Russian State Customs Committee, bananas accounted for 27% of imported fruit’ organic volume (vs. 22% for apples and 14% for oranges) in the first 11 months of 2004.
As for suppliers, St. Petersburg-based JFC International LLC is the major one. In the first six months of 2004, the company accounted for 34% of the total banana import in Russia. Elstar LLC and Omega LLC are the second and third top suppliers importing 11% and 9%, accordingly, as of the first half of 2004.
Picture 2. Bananas Buyers’ Awareness of Banana Brands
The awareness of their favourite fruit brands is still low with Russian shoppers. As much as 81% of consumers find it difficult to recall any brands of bananas they purchased. “Bonanza” (country of origin – Equador; brand owner – JFC International LLC) is the most frequently cited banana brand, recalled Top-Of-Mind by 5% of shoppers, and overall 8% being able to name it spontaneously. American “Chiquita” and “Dole” follow with TOM awareness with 4% of respondents. “Favorita” brand (Equador) is cited TOM by 2% of shoppers.
Culture of Fruit Consumption
Fruit essentially belongs to the food basket of Russia’s urban residents aged 18-65 y.o. It is ranked second among the products most frequently eaten at home (mentioned by 89% of respondents), and first among those consumed outdoors (49% of respondents said they eat fruit out-of-home).
However, fruit is not normally perceived as a component of main meals (breakfast, lunch or dinner). At home, it is most frequently a snack between the main meals (68% of urban Russians); if consumed outdoors, most people take fruit along on a trip (32%).
According to the ACNielsen study results, fruit undoubtedly prevails among all home-eaten snacks (e.g., between breakfast and lunch, or after dinner), leaving chocolates, yoghurt, kefir, cottage cheese and even the all-common sandwiches, pies and hotdogs far behind. At the same time, it is less popular for breakfast - only 19% of Russians regularly eat fruit for breakfast (for comparison, 69% eat sandwiches for breakfast). Of the three main daily meals, dinner is the most likely meal to include fruit (36% of consumers).
Picture 3a. Products Most Frequently Eaten at Home
Picture 3b. Products Most Frequently Eaten Outdoors
Sandwich competes with fruit on journey meals as well. Yet, this eating context is considered to be the most favourable for fruit consumption compared to outdoors eating where snacks like nuts, croutons, or chips are considered more appropriate. 23% of respondents consume fruit in the office for lunch. This is an option in the absence of a cafeteria or dining-area, as fruit don’t require cooking and are easy to bring.
Picture 4. Seasonal Frequency of Fruit Consumption
Over half of Russians eat fruit at least once a day - 69% in the summer season and 55% in the winter season (see Pic.4).
Melons, water melons, and berries enjoy maximum amount per serving per one person. Lemons are eaten in the least quantities of all fruit. Bananas, oranges and mandarines are normally eaten one or two at a time. The amount of fruit eaten varies with the season – 58% Russians say they consume weekly 2 kg of fruit or less in summer, 81% say so in winter. Seasonality of this product is further confirmed by the following: percent of consumers eating fruit once a week or more rarely increases in winter months from November to April (9% - in summer; 22% - in winter). Number of those eating fruit several times a day increases by 70% in the summer months from May to October.
Wider assortment and higher affordability of fruit, as well as the harvest from own gardens, boost fruit consumption in the summer season in Russia.
Semi-annual per capita fruit consumption volume makes up 45.6 kg in May-October and 27.7 kg in November-April in Russian cities with the population of 100,000 or more (for Russians aged 18-65).
What fruit do Russians eat?
Apples are the most popular fruit with Russians aged 18-65. Quarter of Russians prefer apples to other fruit; all but 4% of Russians said they ate apples during past half a year (November’03 to April’04 both months inclusive); slightly over a half – 51 percent – eat them most frequently (see Pic.5). Bananas are the next preferred fruit, with 18% Russians preferring them, 92% having eaten them during the past half a year, and slightly less than a quarter (23 percent) eating them most frequently. Oranges are the third top preferred and consumed fruit (12%, 91% and 11%, respectively), followed by the frequency of consumption by lemons (6% eat most frequently, 82% ate for the past half year), mandarines (2% & 70%) and pears (4% & 61%). However, as far as preference is concerned, the next three most preferred fruit after oranges are pears, grapes and peaches, with 9%, 7% and 6% Russians preferring them , respectively.
One quarter to one half of Russians have also eaten grapes, kiwis, pomegranates, grapefruit and pine-apples for the past 6 months.
Picture 5. Preferred and Consumed Fruits
Apples are featured with the highest consumption frequency - 89% & 80% of Russians eat apples once a week or more in summer and winter, respectively. Although, only one quarter report apples their favourite fruit.
Fresh berries, lemons, bananas, water melons, melons, and pears are frequently eaten in summer. Lemons and bananas are considered also winter fruit, together with oranges and mandarines.
Interestingly, the ratio between the number of people preferring certain fruit and those eating this type of fruit most frequently turned out to be the biggest for grapes. It means that a substantial number of grapes lovers satisfy their taste for this fruit only partially due to a high price, seasonal availability, dietologic or other reasons.
Compared to Europe, fruit consumption pattern in Russia is most similar to that in Czech Republic where apples are also the most eaten type of fruit. Bananas are most popular in Nordic countries, in particular Norway, Finland and Sweden, whereas Southern Europeans (Italy, Spain, France) prefer citruses and pears.
Picture 6. Fruit Consumption in Russia and other European Countries (Compliances Analysis Method)
Sales Channels
According to dealers’ poll results, about 70% of fruit sales in Russia fall on wholesale warehouses and markets. Also, the majority of shoppers (81%) indicate that they choose markets for fruit purchase. On the one hand, this choice is explained by a lower price of fruit sold in the markets compared to groceries and supermarkets. On the other hand, shoppers are attracted by the quality of market-sold fresh products – the common belief is that market produce is fresher because of a shorter logistics chain. Moreover, some of the shoppers mention a wider assortment available at markets.
Fruits purchases from street stands or motor vehicles located out of the open market territory, as well as from kiosks, are also widespread in Russian cities with the population of 100,000 and more. Shoppers commit to buying there regularly (23%) or ‘from time to time’ (20%). Their major advantages are convinient location (on shopper’s way) and ease of purchase (‘pass by – see – buy’).
Regarding ‘indoor’ purchases, modern trade formats, such as supermarkets and hypermarkets are not yet as popular as traditional, over-the-counter stores. When asked where they usually buy fruit, only 14% of shoppers said they do it in super- or hypermarkets, versus 31% who admitted going for fruit to traditional stores. And this is despite multiple answer choice was possible.
Share of supermarkets in retail turnover of fresh fruit is slowly but steadily increasing due to overall development of modern trade formats in Russia. Regular supermarket and hypermarket shoppers do not mind buying fruit together with other products, to save their time and avoid the discomfort related to market shopping, such as abuse from brassy vendors, fear of being cheated, and poor sanitary conditions.
The shift in balance between markets and ‘civilized’ trade formats will mainly depend on how soon retailers, in cooperation with suppliers, will be able to win consumers’ confidence and provide them with an adequate alternative to markets.
Picture 7. Where Russians Usually Buy Fruit
Development Trends
The share of fruit in the food basket in Russia has significantly grown for the last 3-5 years. The index of fruit consumption growth, calculated as a ratio of consumers who have increased and decreased their consumption, with a provision for those who’s consumption remained at the same levels, stands at +0.37. The index values range from –1 to +1; positive index values signify consumption increase.
Picture 8. Changes in the Russian Food Basket for the Last 3-5 Years
A relatively strong growth trend is oserved in consumption of dairy products, fresh fruit and vegetables, their growth indices standing at +0.46, +0.37 and +0.24, respectively. However, the share of dairy products in the food basket is smaller than that of fruit - 60% of Russian urban citizens aged 18-65 consume dairy products at home vs. 89% who consume fruit. At the same time, consumption of canned food, butter, chocolate, sausage, spaghetti and bread is going down, which speaks for healthier nutrition.
It should be kept in mind though, that the Index indicated general consumption trends and cannot be used for any quantitative or absolute value estimations, since it is calculated on the basis of respondents’ subjective perception of changes in their nutrition.
The Future of Fruit Sales in Russia
Unlike in most Western European countries, the Russian fruit market is growing and is far from saturation. Most of Russia’s regions demonstrate positive fruit consumption dynamics.
Over two thirds of dealers mention purchasing power and price levels as major factors impacting fruit sales volumes in Russia. In other words, significant sales growth can be expected in case of a major price drop and/or increase of Russians’ purchasing power. Fruit quality and seasonal availability are the next most important factors influencing fruit market development. Both factors are considered to be significantly less important than the financial ones, but still they should be taken into consideration when forecasting sales. In terms of quality, consumers are caucious buying imported fruit in winter, such as grapes, apples, pears, etc., and often refuse to buy them because they are tasteless or lack aroma. Other characteristics relating to fruit quality are visual appearance, size and durability.
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