Drinks in Russia

• Carbonated beverages (Russian market)
• Alcoholic beverages (Russian market)
• Juices and Nectars (Russian market)
• Export and import of alcoholic beverages in Russia
• Export of water and soft drinks from Russia

Chronicle

2024: A plant for the production of non-alcoholic carbonated drinks was built near Voronezh for ₽5 billion

In the special economic zone "Center" of the Voronezh region, the construction of a large enterprise for the production of non-alcoholic carbonated and tonic drinks has been completed. Investments in the project amounted to more than ₽5 billion. The new enterprise, built by Global Drinks LLC, began receiving the first cargo through the recently opened customs terminal in the territory of the special economic zone. The company plans to reach full production capacity by 2026, when production will exceed 800 million units. Read more here.

2023

Growth in the volume of the Russian mineral and drinking water market by 8% to 12.42 billion liters

At the end of 2023, sales of mineral and drinking water in Russia reached 12.42 billion liters. This is 8.2% more compared to 2022, when the volume of sales was estimated at 11.48 billion liters. Such data are given in the BusinesStat study, the results of which were published in early December 2024.

The review takes into account mineral canteens, medical canteens and medical waters, as well as drinking still, carbonated and treated waters. Among the significant market players are named "Archa," "Wimm-Bill-Dann," "Vologda Dairy Plant," LVZ "Saransky," MPBK "Ochakovo," "Multon Partners," "Pepsiko Holdings," PC "Aqualife," Firm "Agrocomplex" named after N. I. Tkacheva and others

According to estimates, in 2019, 10.23 billion liters of these products were sold on the Russian market. A year later, the figure increased by 1.9%, reaching 10.43 billion liters. In 2021, an increase of 7.1% was recorded with a final result of 11.17 billion liters, and in 2022 the increase was 2.8%.

Stable positive dynamics, as noted, supports the trend towards environmental friendliness and a healthy lifestyle. Consumers have become more demanding on the quality of water and its composition. In addition, the demand for mineral and drinking water from the tourism and health sectors is increasing. As the low quality of tap water persists, with the complete purification of which purchased filters do not always cope, the demand for clean water is growing. The provision of bottled drinking water is part of the "basic" service in many service areas - from hotel service to transport. Urbanization, the development of online trading and delivery channels also contribute to growth. In general, during 2019-2023. sales of these products in Russia rose by 21.4%.^[1]

Growth in kvass consumption by 5% to 5.1 liters per person

In the summer of 2024, it became known that the volume of kvass consumption in Russia demonstrates stable positive dynamics in the period from 2019 to 2023. Consumption of this traditional drink per capita has doubled in monetary terms, reaching the rate of ₽130 per person by the end of 2023.

According to the GuideMarket study, the average annual growth rate of kvass consumption was 18%. In physical terms, the indicators also showed an increase - from 4.2 liters per person in 2019 to 5.1 liters in 2023, which corresponds to an average annual increase of 5%.

Kvass sales peaked in 2021, which was due to the recovery in economic activity after the COVID-19 pandemic, favorable weather conditions in the summer and increased demand for traditional drinks.

Analysts of GuideMarket note that in order to maintain positive dynamics, manufacturers need to develop wide sales networks, including wholesale partners, retail chains and catering enterprises. In addition, an important factor in success is the revision of the assortment policy, taking into account the production of unique kvass tastes to attract a young audience.

Experts emphasize the importance of local advantages for small producers - proximity to sources of raw materials can be a key factor in competitiveness in the absence of competition from local brands. Given the introduction of excise duty on sugary drinks and the higher profitability of kvass, manufacturers are advised to revise the pricing policy to strengthen competitive positions in the soft drinks segment.^[2]

Kvass production in Russia decreased by 2% to 783.2 million liters - BusinesStat

During 2022-2023, kvass production in Russia decreased by 2% - to 783.2 million liters. The market situation is described in the BusinesStat review, published in mid-August 2024.

The study considers different types of kvass (bread, okroshechny with additional flavors) in different types of packaging: PET, jar, bag and glass. It is noted that domestic raw materials are largely used for the production of kvass in the Russian Federation. Russian companies use imported ingredients such as juice concentrates, fillers and flavors, primarily when producing kvass with different flavors, the share of which in total sales is small. Among the key market players are named LLC, Brewery PepsiCo Holdings Company LLC, Baltic JSC, AB Inbev Ephesus CJSC and Moscow Brewery Company Moscow Beer and Non-Alcoholic Plant JSC.Ochakovo

According to estimates, in 2019, 610.4 million liters of kvass were produced in Russia. In 2020, an increase of 4.5% was recorded - up to 638.1 million liters. The sharp jump occurred in 2021, when the volume of production rose by 25.3%, reaching 799.6 million liters. In 2022 and 2023, there was a drop of 1.8% and 0.2%, respectively - to 784.9 million and 783.2 million liters.

The authors of the report say that the formed geopolitical situation did not have a significant impact on the market in question. In general, during 2019-2023, kvass production in Russia increased by 28.3%. This attracted the attention of multinational companies from related categories - PepsiCo (brand "Russian Gift"), Carlsberg Group ("Bread Land") and AB InBev Efes. The increase in the number of players led not only to increased competition, but also to an influx of investment in the industry, as well as an increase in the audience of consumers. In addition, brewers paid close attention to kvass due to the stagnation of the beer market.^[3]

In Russia, the production of power engineers has doubled

During 2019-2023, the production of energy drinks in Russia increased 2.2 times - from 498 million to 1096 million liters. Teenagers are showing great interest in tonic drinks, as stated in BusinesStat materials published on June 7, 2024. Read more here

Production of bottled water in Russia for the year increased by 58% to 670 million liters

The production of bottled water in Russia in 2023 increased by 58%, reaching a five-year high. This became known at the end of spring 2024. According to the state marking system "Honest Sign," 670 million liters of water were produced in January 2023, and in May 2023 this figure was already 1 billion liters.

According to Izvestia, the bulk of the produced water was still drinking water, which accounts for 65% of the total production. Carbonated mineral water accounted for 18%, carbonated drinking water for 10% and non-carbonated mineral water for 7%. In general, the production of bottled water in Russia in 2023 reached 10.5 billion liters, which is 16.4% more than in the previous year.

According to the Center for the Development of Advanced Technologies (CRPT), the operator of the Honest Sign system, from March to May 2023, water consumption in federal districts of Russia increased by an average of 36%. A significant increase in sales of products was observed in the Volga Federal District (+ 46%), the Ural Federal District (+ 41%) and the Far Eastern Federal District (+ 37%).

The largest volume of mineral and drinking water production was formed by the Central Federal District, which produced 32.2% of the total. In the segment of mineral natural water, the North Caucasus Federal District leads with a share of 44.2%, while in the segment of treated water the Central Federal District occupies 46.6%.

According to Yulia Kuzmina, head of the excise-free food department of the CRPT, the growth in the consumption of bottled water in Russia is the result of the withdrawal of foreign producers from the market, which allowed local companies to increase production and expand the sales market.

Natural waters forming the basis of the market account for 64.1% in physical terms at the end of 2023. Mineral natural waters (canteens, medical canteens and medical) make up 30.3% of the production volume, and natural drinking water (non-mineral) - 33.8%.^[4]

4-Year Soft Drinks Market Growth by a Third

In 2023, approximately 9.41 billion liters of soft drinks were sold on the Russian market. For comparison, in 2019, sales were 7.01 billion liters. Thus, in four years, the volume of the industry increased by more than a third - by 34.2%, as stated in the BusinesStat report in mid-April 2024.

The study notes that the consumption of soft drinks in the Russian Federation is growing steadily. In 2020, sales of these products rose on an annualized basis by 3% - to 7.22 billion liters, and in 2021 the increase was recorded at 16.5% - to 8.41 billion liters. At the end of 2022, an increase of 7.5% was demonstrated: the final result was 9.04 billion liters.

In 2023, the main drivers of the industry were the revival of consumer demand amid the recovery in real incomes of Russians and the expansion of the range of soft drinks. The development of the domestic market is facilitated by the current geopolitical situation, against the background of which Coca-Cola and PepsiCo left the Russian Federation. This was taken advantage of by their competitors, who began to actively occupy the vacated niches. Russian and foreign manufacturers launched additional brands and expanded the range with new flavors and packaging formats in different price categories.

At the same time, according to the materials of BusinesStat, Russian companies that occupy a leading position in the market faced certain difficulties. In particular, from July 1, 2023, an excise tax on sugary drinks was introduced: products that contain more than 5 grams of sugar per 100 ml are taxed at 7 rubles per 1 liter. These rules affected the bulk of soft drinks. The introduction of excise taxes led to an increase in costs and a decrease in the profitability of production, which, in turn, provoked an increase in prices.^[5]

Soft drink output up 6% to 19.76 billion litres

In 2023, approximately 19.76 billion liters of soft drinks were produced in Russia. This corresponds to an increase of almost 6% compared to 2022, when the volume of output was 18.69 billion liters. The departure of foreign companies from the Russian Federation due to geopolitical tensions allowed domestic enterprises to occupy a vacant niche. Market statistics in mid-February 2024 were published by BusinesStat.

The data covers segments such as mineral water and drinking water, refreshments, juices and nectars. The list of the largest players in the industry includes Pepsiko Holdings"," Wimm-Bill-Dunn"," "Brewery Company," "Baltic Firm" Agrocomplex "named after N.I.Tkevva and". "Moulton Partners

According to BusinesStat estimates, in 2019 the volume of soft drinks in Russia was 19.16 billion liters. In 2020, an increase of 3.1% was recorded - to 19.75 billion liters, and in 2021 production increased by another 9.6%, reaching 21.65 billion liters.

In 2022, a 13.6% decline followed: the result was at 18.69 billion liters. A decrease in output was observed for all types of non-alcoholic products, except for soft drinks. Temporary restrictions on the work of international corporations Coca-Cola and PepsiCo led to the reduction. In addition, Russian factories faced a shortage of imported ingredients. In particular, juice and nectar producers have complained of a shortage of tropical and citrus fruit concentrates. The industry has also been negatively impacted by difficulties buying packaging materials - caps, labels and paints. The situation began to stabilize in 2023: manufacturers built new trade ties, starting to purchase the missing ingredients in the CIS countries, in particular, in Uzbekistan and Armenia. Additionally, the formulation of some beverages was changed.^[6]

Production of filters for drinking water began to grow again in Russia

In 2023 Russia , about 95.8 million filters for drinking water were produced, which is 3.7% more than the previous year, when a decline was recorded. The industry began to recover, according to the BusinesStat review published on February 9, 2024. More. here

Growth in syrup production by 5.5% to 293 thousand tons

In 2023, approximately 293 thousand tons of glucose-fructose syrups were produced in Russia. This is about 5.5% more than in the previous year, when the volume of output was estimated at 277.8 thousand tons. Such data are given in the BusinesStat study, the results of which were published at the end of May 2024.

Glucose-fructose syrup is a product that is obtained by isomerizing part of the D-glucose of starch into D-fructose, that is, the syrup consists mainly of fructose and glucose, which makes it equivalent in sweetness and nutritional value to sucrose. Such syrups are used by manufacturers of soft drinks, canned berries and fruits, jams, ice cream, yogurts, confectionery, sauces and ketchups. Glucose-fructose syrup allows, without changing the structure of the product, to enhance its aroma and taste, as well as to increase the shelf life. Moreover, the price of syrups is usually lower than the price of sugar and molasses.

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BusinesStat

In Russia, the production of glucose-fructose syrups is growing steadily. So, in 2019, the volume of output was 187.6 thousand tons, in 2020 - 201.1 thousand tons, and in 2022 - 259.6 thousand tons. In general, in the period 2019-2023. Production rose by 56%. It is noted that at the end of 2023, the volume of production was twice as high as in 2014, when 144.6 thousand tons of products were produced in the Russian Federation.

The observed growth, as analysts note, is due to the rush demand of consumers for the purchase of goods in reserve, the replacement of sugar with fructose by food companies, an increase in the consumption of non-alcoholic and low-alcohol drinks in the country and an increase in the volume of the domestic tourism market. The departure of international companies against the background of the current geopolitical situation allowed local producers to adjust the formulations of products, replacing sugar with glucose-fructose syrups in them.^[7]

Bottled Water Market Growth of 38.9%

In 2023, the volume of the Russian bottled water (drinking and mineral) market increased by 38.9% compared to the previous year. At the same time, domestic production rose by 14.5%. Such data are given in a study by NeoAnalytics, the results of which are presented on March 22, 2024.

The report says that in 2023, the export of bottled water from the Russian Federation amounted to more than 150 million liters, which is 89.9% less than in 2022. The main consumers were Mongolia and. Azerbaijan The share of imports in the structure of the Russian market is about 1.3%. In 2023, a little more than 140 million liters were imported: the increase in relation to 2022 is estimated at 11.4%. Russia Bottled water is imported primarily in the upper price segment, and the leading suppliers are and. Georgia Italy

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NeoAnalytics

In 2023, the level of consumption of bottled water in Russia is about 45.7 liters per person per year. For comparison: in Europe as a whole, this figure exceeds 100 liters. In the structure of the bottled water production market in the Russian Federation, the share of mineral water is 47.5%. Drinking water, including carbonated water, accounts for 52.5%.

The development of the Russian drinking and mineral water industry is facilitated by the current geopolitical situation, due to which the largest foreign brands left the Russian Federation. Domestic manufacturers used this opportunity to expand the sales market, enter new regions and increase the range of products. As of 2023, the volume of domestic output significantly exceeds the volume of imported supplies. Almost all manufactured products go to the domestic market.

The largest volume of production in Russia, as noted by AnalyticResearchGroup, falls on natural waters. This means that the water is extracted from a particular source or well and treated by methods that do not alter the content and ratio of cations, anions and biologically active components in its composition. Another category is treated drinking water from any source, the preparation of which uses acceptable technologies such as filtration, antimicrobial treatment, ozonation, etc.^[8]

Growth in the production of soft drinks to 115.3 million decaliters

In 2023, the production of soft drinks in Russia amounted to 115.3 million decaliters against 107 million decaliters a year earlier. This is evidenced by the data of Rosstat, which became known in April 2024.

According to Vedomosti, prices for soft drinks rose amid the introduction of exchange rate duties, which pushed producers away from exports and forced them to focus on the domestic market, where they had to increase the cost of products to maintain profitability. In addition, the changes in the market are caused by the introduction of mandatory labeling of soft drinks and a tax on them. The excise rate is 7 rubles per liter, and these costs are added to the price of products.

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Unsplash

The introduction of labeling for soft drinks and excise taxes on soda with sugar in 2023 could also affect the market situation, says President of Soyuznapitkov Maxim Novikov.

Both measures required the industry to translate part of the costs into the cost of products, and the increase in prices, in turn, is directly related to demand and production volumes, he said.

According to the Ministry of Finance of the Russian Federation, excise taxes on sugar-containing drinks of Russian production in 2023 gave the budget 7.2 billion rubles, on imported drinks - 1.1 billion rubles.

The increase in costs among manufacturers was also led by a change in the exchange rate, an increase in the cost of logistics and a shortage of personnel, said Arthur Gafarov, director of strategic development at the Institute for the Development of Entrepreneurship and Economics. According to him, as a result, the cost of sweet soft drinks among the largest producers increased by 10-15%.

According to NTech for 2023, in the category "Sweet carbonated drinks" in terms of market share in monetary terms, the Good trademark (25.1%) leads, followed by Chernogolovka (17.6%), Cool Cola (6.8%), Coca-Cola (4.8%) and Everness (4.1%).^[9]

2022

Growth in the production of soft drinks in Russia by 45% to 9.5 billion liters

In 2022, 9.5 billion liters of soft drinks were produced in Russia, which approximately corresponds to the volume of one year ago. However, compared to 2018, the market volume grew by 45%, according to data from the analytical company BusinesStat, published in December 2023.

According to experts, until 2022, Coca-Cola and PepsiCo dominated the Russian soft drinks market. Most of the sales of carbonated and tea drinks fell on these corporations, and the rest of the manufacturers competed with each other, trying to take a small segment of the market, or engaged in related types of drinks - kvass, still drinks and power engineers, in which the positions of the giants were not so strong, the study said.

In 2022, Coca-Cola and PepsiCo, instead of completely leaving the Russian Federation, chose the option of getting rid of all Russian assets and formally leaving in the form of stopping the production of products under international brands and restructuring their portfolios in favor of local brands. But local producers were not prepared to maintain the status quo and took advantage of the situation. A natural reaction to the withdrawal from the market of the classic three drinks Coca-Cola, Fanta, Sprite from Coca-Cola and Pepsi, Mirinda, 7Up Pepsico has an instant appearance of analogues.

The company Ochakovo"" followed the path of replacing the entire three, releasing analogues in all three types - Cool Cola, Fancy and Street. GK Chernogolovka"" also released an analogue of Cola - "Kola Chernogolovka," but, unlike "Ochakovo," at the same time intensively promoted other drinks from its range with tastes traditional for the Soviet-Russian market. Other Russian manufacturers have also released lines of analogues of cola and other popular soft drinks, add to BusinesStat.^[10]

Sales of finished syrups decreased in Russia - by 14.9% to 19.5 thousand tons

In 2022, 19.5 thousand tons of finished syrups were sold in Russia, which is 14.9% less than the previous year. The main reason for the decline was the compression of demand from the population and the catering sector due to rising prices and a reduction in assortment, according to a study by BusinesStat, published in July 2023.

According to analysts, in 2022, domestic manufacturers faced a shortage and rise in price of individual food components used in the manufacture of syrups, problems with product packaging and equipment maintenance, and importers significantly reduced supply volumes due to violation of supply chains and due to sanctions.

According to the study, most of the ready-made syrups and toppings are sold to catering establishments: coffee shops, bars, restaurants, hotels and catering companies. For a long time in Russia, these products were niche and were used only by professional baristas, bartenders and chefs, but in recent years the market has received a new impetus for development. The growth in sales of finished syrups was largely facilitated by the popularization of the consumption of coffee and mixed drinks among Russians, as well as the expansion of the range of syrups and toppings presented in retail.

The demand for drinks and desserts with favorite tastes remained and was realized through the purchase of ready-made syrups and toppings in retail stores and marketplaces. Also, many coffee shops have launched express delivery of drinks and desserts. It was carried out both in-house and by third-party services.

In 2022, about 100 different flavors of ready-made syrups and toppings were presented in stores. The five most popular among Russians included chocolate (7.6% of the assortment), caramel (6.3%), maple (5%), strawberry (4.8%) and vanilla taste (4.5%).^[11]

Notes