Packaging and Packaging Materials (Russian Market)

2024: All types of food packaging are now produced in Russia

Russia has successfully ensured the localization of mass types of packaging solutions for dairy products, including all varieties of baby food. This was reported in the national union of milk producers "Soyuzmoloko" on February 8, 2024.

According to the organization, the main participants in the packaging market also localized the production of all the main raw materials components, and the volume of output fully covers demand. The study notes that manufacturers were able to prevent a "collapse in the food market" by quickly finding alternative suppliers in friendly countries, and also replacing key raw materials components. The new supplier base has about 400 companies, and packaging stocks have quadrupled, the study said.

source = Soyuzmoloko

According to Soyuzmolok, published in February 2024, 12.8 million tons of products requiring 32.2 million packages are packaged annually in the Russian dairy industry. About 31% of the packaging is multilayer cardboard, 17% is PET bottles, 25% is flexible polymer packaging, and the remaining volume is occupied by various materials such as polyethylene, paper, plastic and foil.

Analysts from Soyuzmolok believe that in order to completely switch to domestic packaging and reduce imports from China, it is necessary to develop a localization strategy, establish clear rules for the packaging industry and introduce tariff duties and other regulatory tools.

Experts also draw attention to the fact that by February 2024, point problems remain with certain complex types of packaging, such as EcoLean, SIG, Tetra Top. Difficulties are caused, for example, by individual packaging for melted cheeses, cheeses with mold, as well as packaging for cheeses in cut.^[1]

2023:11% increase in container and packaging production

In 2023, the production of containers and packaging in Russia reached 196.01 billion units. This is 11% more compared to 2022, when the volume of output was 176.63 billion units. Significant growth is associated, among other things, with the current geopolitical situation, due to which some large foreign companies left the Russian Federation. Data on the Russian market are given in the BusinesStat report, released at the end of March 2024.

Analysts take into account the sale of cardboard (paper) packaging, metal containers, plastic containers and packaging, glass containers, as well as products from other materials (ceramics, bast fibers, cotton yarn and other textile and chemical materials). Among the significant players in the industry are named AUR Naro-Fominsk, Packaging Systems, Petrus, Rusjam Steklotara Holding and Ken-Pak Packaging Plant.

The study says that the Russian market for containers and packaging has been steadily developing since 2019, when production amounted to 143.24 billion units. In 2020 and 2021, growth amounted to 7.4% each - up to 153.84 billion and 165.24 billion units, respectively. And in 2022, an increase was recorded at the level of 6.9%.

Analysts note that a stable increase in output occurs against the background of annual growth in domestic demand for products, as well as an increase in export supplies. In 2022, due to sanctions, some large manufacturers and suppliers, such as Tetra Pak, Elopak, Smurfit Kappa Group, Stora Enso, etc. left the Russian container and packaging market. In addition, there were difficulties in the supply of raw materials and equipment. However, Russian companies managed to cope with the consequences of the crisis, and the suspension of foreign enterprises freed up a niche. At the same time, the increased demand for packaging served as an incentive to modernize production facilities, develop new packaging solutions and expand the range of products.^[2]

2022

In Russia, the production of glassware decreased by 10.4% - to 1.84 billion units

In 2022, about 1.84 billion units of glassware were produced in Russia, which is 10.4% less than a year earlier. Analysts of the market research agency GuideMarket presented such data on August 24, 2023.

In their calculations, experts included glassware for laboratory, hygienic and pharmaceutical purposes. The study notes that the decrease in the production of glassware in Russia in 2022 reflects the current situation on the market. However, despite this, Russian manufacturers continue to work to meet domestic demand and seek to improve the quality and competitiveness of their products, analysts say.

Given that the market for glassware for laboratory, hygienic or pharmaceutical purposes and glass ampoules is at maturity and close to saturation, production volumes are expected to increase slightly in the short term, the report said.

It also follows from the report that the share of exports in production is small and tends to decline. At the same time, the share of imports remains stable in the study period. This suggests that Russian glassware manufacturers are more focused on the domestic market, which is due to the stable demand for such dishes in Russia for laboratory, hygienic or pharmaceutical purposes and glass ampoules, analysts say.

They add that the dynamics of glassware production volumes correlates with the dynamics of domestic market volume in the study period, with the exception of 2020, when the decline in production did not affect the decline in market volume due to the growth of import supplies. However, in 2022 there was a decrease in export supplies, which leads to a decrease in production volumes for foreign markets.^[3]

Sales growth of containers and packaging by 2.2% to 169 billion units

In 2022, 169 billion units of containers and packaging were sold in Russia, which is 2.2% more than a year earlier. The market volume continued to increase, but the pace declined sharply - in 2020-2021. they were measured at + 9.5% and 12.4%, respectively. This was announced in August 2023 by BusinesStat analysts.

According to them, in 2020-2021. sales of containers and packaging in the Russian Federation grew rapidly due to the active development of e-commerce and the emergence of various delivery services after the start of the COVID-19 pandemic. In the context of an unfavorable epidemiological situation, the number of delivery orders from stores and catering establishments increased, which led to an increased demand for plastic and cardboard packaging.

In 2022, the complication of foreign policy relations around Russia led to an increase in the cost of imported raw materials, which, in turn, influenced the rise in prices for packaging materials. The demand was also negatively affected by the suspension of activities and the departure from Russia of many foreign enterprises that were consumers of containers and packaging. In addition to consumer companies, foreign packaging suppliers also left the Russian market, which led to interruptions in the supply of corrugated packaging and tetrapak containers.

Among all market segments, the maximum increase in sales in 2022 was demonstrated by glass containers - by 9.7%. The share of domestic glass containers is more than 80% of the Russian market. The economic crisis did not affect Russian manufacturers of glass containers ractically, since most of them work on domestic equipment, satisfying not only domestic demand, but also supplying foreign buyers. At the same time, in 2022, domestic companies, in the face of increased demand, began to master the production of new types of products. For example, Interlass has launched the production of lightweight glass bottles designed for vodka and mineral water.

The only type whose sales decreased by the end of 2022 was cardboard and paper containers. Against the background of the introduction of Western sanctions, problems arose with the supply of raw materials for the pulp and paper industry, which led to an increase in the already high cost of cardboard packaging. As a result, food manufacturers and catering establishments were forced to resort to changing cardboard packaging to cheaper categories, the study said.^[4]

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