Although Russia has very high agricultural potential, with 8% of the world’s arable land, local production of fruit and vegetables remains small. The production landscape is fragmented, and modern mechanisation, agricultural techniques, seeds and storage facilities are lacking both the infrastructure and mentality inherited from Soviet times. Low production output results in Russia being a net fruit and vegetable importer. This is mentioned in a report from PMA.

Annual Consumption (kg per capita) of Potatoes (Dark Green), Vegetables (Light Green), Fruit (Blue) and Other Foodstuffs (Brown) by Socio-Demographic Factors 2012

Higher income Russians consume more fresh produce than lower income ones. Differences are most apparent for vegetables other than potatoes and particularly for fruit. Potato consumption varies least between different income groups. In other words, richer Russians consume up to 50% more potatoes; more than twice as much as other vegetables and almost three times more fruit than poorer Russians.

Considerable growth in fruit consumption
Growth in fruit consumption in Russia has been remarkable, close to doubling from 39kg per capita per year in 2004 to 74kg in 2012. The variety of fruit available has also greatly increased, mostly due to the rapid expansion of modern retailers, which attract customers with a sophisticated selection of common and more exotic fruit. Nevertheless, the overall per capita consumption of fruit remains at least half of that of developed countries. Apples, bananas, oranges, mandarins and grapes are the most popular fruits in Russia.

Vegetable Consumption Volume 2012 (‘000 metric tons)

Potatoes remain the most widely eaten vegetable
Potatoes are the most popular vegetable in Russia. The per capita consumption per year stood at approximately 65kg in 2012. Current consumption is down from 86kg in 2004, which was more than 200g per day and almost on a par with all other vegetables combined.

However, with growth in disposable income, other produce is gradually replacing potatoes, although they remain the key staple for many Russians, particularly in lower income groups and rural areas. Cabbages, tomatoes, onions, beetroot, carrots and cucumber are other commonly eaten vegetables. 2012 estimates suggest that Russians ate as much as 24kg of tomatoes, 13kg of cucumbers and 16kg of onions per capita.

Traditional grocery retail remains important, but losing ground to modern retail
Traditional grocery retailers such as independent grocery stores and open markets accounted for a 43% value share in grocery retailers in 2012. This is a decline from 2011, when these channels had a 46% value share.

Modern grocery has continued to stabilise its market shares and hypermarkets and supermarkets grew both in the number of outlets and value sales. Recent decades have seen the emergence of chained supermarkets and hypermarkets with notable expansion in Russia’s major cities, and together accounted for 88% value share in modern grocery retailers in 2012.

Supermarkets / hypermarkets: the key fresh produce channel
Supermarkets and hypermarkets are the key grocery retail channels for fruit and vegetables. In 2007, open markets were still the main channel, but the rapid development of modern retail and government endeavours to reduce informal trade contributed to a decline in their importance and the rise of supermarkets/hypermarkets. Open markets remain the key fresh produce channel outside the bigger cities, where modern retail is far less developed.

Steady consolidation in food service
While the market remains strongly fragmented, consumer foodservice continues to consolidate in favour of chained players, with chains gaining share over independent stores every year. In 2012 chained players continued to place stronger focus on expansion in the regions of Russia as markets in Moscow and St Petersburg are already saturated.

The most important vegetables in Russia
Potatoes are the single most important vegetable in Russia with consumption volumes equal to the two thirds of consumption volumes of all other vegetables combined. In the face of economic difficulties and increasing price sensitivity, the demand for potatoes as well as other staple vegetables is expected to rebound at the expense of meat, fish and other more expensive foodstuffs.

Tomato, cucumber and pepper consumption registered the fastest growth compared to previous years, and this trend is expected to continue, as Russians get more accustomed to greenhouse vegetables and increase their consumption during the off-season.

Apples, bananas and citrus fruit dominate fruit consumption
As local production is limited by climatic conditions and by production inefficiencies, an estimated two thirds of all fruit and one third of vegetables consumed in Russia are imported. Russia was the top global importer in 2012 in volume terms of apples, apricots, cherries, mandarins, onions, oranges, pears, plums and prunes. It is also the world’s second largest importer of cabbages, grapes, lemons, peaches, nectarines and tomatoes; and the third largest importer of carrots, cucumbers, grapefruit and mushrooms. Overall, Russia was the third largest fruit and vegetable importer in volume terms in 2012, after the US and Germany.

For logistical reason, imports consumed in the European part of Russia come from Europe and the Middle East, whereas a large share of produce sold in the eastern regions is imported from China.

Personal growing
On average, a third of vegetables and 10% of fruit consumed by households in 2012 were estimated to have grown in own gardens. Berries grow in considerable volumes in Russia, but few are commercially cultivated, as blueberries, cranberries and raspberries grow wild. In 2012, berry production volumes reached 709,800 metric tonnes; 27% of the total fruit production output.

Given the expected increase in fruit prices and the drop in disposable incomes, Russians are expected to limit their non-essential fruit spending to the most common fruits, such as apples, bananas, oranges and mandarins, which are also usually cheaper.

Source: PMA