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Russia soft drinks market: Forecast to see growth between 2012-17
Soft Drinks in Russia - a new market research report on 2014-04-18 09:01:04
The Russia soft drinks market registered dynamic development over the review period. Although soft drinks suffered from the economic downturn, the recovery, which started in 2010, was healthy and fairly rapid. In 2010 besides the comeback from the slump, the market also benefitted from extremely hot summer weather conditions, which resulted in a very strong performance of soft drinks sales in that year. The following years 2011 and 2012 experienced a partial negative rebound effect. The soft drinks category which grew the most in 2010, recorded lower actual volume growth during those years given that the level set in 2010 was so high. However, further increasing disposable income of the population and manufacturers´ attempts to drive growth further resulted in an overall positive performance of the soft drinks market in 2011 and 2012.

Russian consumers demonstrated increasing interest in looking after their health over the review period. As more educational-type features and advertisements appeared in the mass media, consumers became more concerned about what they eat, drink and the kinds of products they use in their daily lives. In light of this trend consumers increased their demand for soft drinks which are positioned as natural. The companies across all soft drinks categories are putting increasing effort into responding to the newly emerging trend in the best way. Most of the launches, in one way or another, were directed towards emphasising the naturalness of the products or the benefits of each new launch on consumers´ health.

Consumer disposable incomes continued to rise throughout 2012, which stimulated demand for new flavours in soft drinks. The industry players, in response, have been actively introducing new products and expanding their current product lines with new flavours. All the categories, even stagnating ones, such as concentrates and those once already characterised by a very high selection of flavours, such as, fruit/vegetable juice, benefited from a large number of new launches. Higher disposable income enabled consumers to experiment with the new tastes without substituting previously preferred flavours.

Small grocery retailers has traditionally been the most popular soft drinks retail channel in Russia over many decades. However, the modern channels, such as supermarkets and hypermarkets, have been gaining in popularity. Although independent small grocers continues to generate the largest share of soft drinks sales, thanks to the offer of frequent price promotions and a wide choice of products, supermarkets and hypermarkets have steadily eroded the share of independent small grocers. Internet retailing accounts for only a marginal share of total sales, but has the potential for development in the future.

The Russian soft drinks market is expected to see further positive development, and is likely to demonstrate further confident growth over the course of the forecast period. The country´s economy is well placed for further development. The most dynamic categories, such as sports and energy drinks and RTD tea and coffee, are likely to perform strongly, while the most saturated categories, such as juices and carbonates, will develop at a more moderate pace. The health and wellness trend is expected to accelerate and drive the demand for products that are positioned as natural. However, there is no major reason to expect that any of the categories in soft drinks will suffer declining sales as a result of this new trend. Healthy lifestyles are gradually being adopted and most manufacturers will be able to adjust to the trend.

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