15 November 2018, The Russian Dairy Market is expected to reach USD 34.56 billion by 2025, exhibiting considerable growth over the forecast period. Massive investments in building large sized dairies, coupled with rising milk production in the country, are key factors expected to have a positive impact on market growth. Additionally, rising per capita income and increasing consumption of dairy products owing to health benefits are likely to contribute to market development in future.
Russia is seeking to become self-sufficient in the coming years, particularly in terms of meeting domestic demand for dairy products. Recently, the Ministry of Agriculture in Russia announced its plan to build more than 800 large-sized dairy farms in order to meet increasing demand. It is projected that this plan would probably increase Russia’s dairy capacity by nearly 5 billion tons of milk, to reach 36 billion tons.
In 2016, funds and subsidies offered by the government to companies and vendors in the dairy industry rose to double as compared to 2015, as a part of Russia’s initiatives for the industry. In addition to this, the Russian government provides subsidies on bank loans, reimbursement for capital costs of construction, and other forms of support to local milk producers. This was aimed at increasing the average profitability of dairy farms in Russia. As a result, investments in the sector are likely to improve in the coming years.
In 2014, Russia banned the import of agricultural products, owing to which, the net imports of dairy products fell to 30.0% in 2016. The cheese and curd segment suffered the most, with the ban wiping out about 2, 30,000 tons of imports, equivalent to 53.0% of the total imports in the previous year.
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However, domestic producers have highly benefited from the import ban. These producers ramped up their production processes to maximize the host of opportunities that became available.
There are many large- and small-scale companies in this market, which are engaged in production of dairy products. Very few companies or farms have the management capability, technology, and access to capital to deal with current market challenges. Entry of new companies is also opening new growth opportunities in the market. However, new farms have been facing tough competition from existing companies. As a result, they have been offering a variety of products at affordable prices in order to mark their presence in the competitive business environment.
Some of the farms and companies operating in the Russia dairy market are Nestle, Wimm-Bill-Dann Foods, The Lactalis Group, FrieslandCampina Russia, and EkoNiva-APK Holding.
Hexa Research has segmented the Russian dairy market report based on product and distribution channel:
Segmentation by Product, 2015 - 2025 (USD Billion)
Segmentation by Distribution Channel, 2017 (% share)
Key players analyzed
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