Sauces (Russian market)

• Food industry in Russia

2023

Mayonnaise production in Russia increased by 7%, to 871.1 thousand tons

In 2023, 871.1 thousand tons of mayonnaise and mayonnaise sauces were produced in Russia. This is 7% more compared to 2022, when the volume of production of these products was estimated at 813.8 thousand tons. Production is growing, despite the fact that the industry is close to full saturation. This is stated in a study by BusinesStat, the results of which were published at the end of August 2024.

It is noted that the market for mayonnaise and mayonnaise sauces in Russia is characterized by a high degree of consolidation. Despite the fact that production is carried out in almost every region, the five largest participants control about 85% of the industry. Leading players include Essen Production AG (Makheev brand), Efko Group of Companies (Sloboda), Nizhny Novgorod Fat and Fat Plant (NMZHK - Ryaba, Astoria), Rusagro Group of Companies (Moscow Provençal, Mistress's Dream) and Nefis Group of Companies (Mr. Ricco). Moreover, in 2023, Rusagro gained control over NMZHK, as a result of which the share of the combined structure was approximately 40%.

The industry is showing unstable dynamics. According to estimates, in 2019, 852.8 thousand tons of mayonnaise and mayonnaise sauces were produced in the Russian Federation. In 2020, a 3.4% decline followed - to 824.1 thousand tons. In 2021, the volume of production increased by 2.4%, reaching 844.3 thousand tons. However, in 2022, another decline followed: production decreased by 3.6%. In general, from 2019 to 2023, the production of mayonnaise and mayonnaise sauces in Russia increased by 2.1%.

Analysts say the market's potential is significantly limited by competition with other, newer sauces for consumers applied to make specific dishes, such as meat. In addition, global trends related to a healthy lifestyle and functional diet have an impact on the industry, which excludes the use of fatty and high-calorie products, which include mayonnaise. A promising channel for the sale of Russian mayonnaise and mayonnaise sauces is export - primarily to the CIS countries.^[1]

The production of tomato paste, sauces and ketchups in Russia for the year increased by 2.9% to 655.1 thousand tons

In 2023, the production of tomato products in Russia reached 655.1 thousand tons. The growth compared to the previous year, when 636.8 thousand tons were produced, amounted to approximately 2.9%. Relevant data are provided in the BusinesStat study, the results of which were published on July 10, 2024.

The statistics presented cover tomato pastes and purees, tomato juices and drinks, tomato sauces and ketchups, as well as whole or cut into pieces canned tomatoes. A feature of the production of these products, as noted, is the presence or absence of its own raw materials from enterprises. Some companies process tomatoes grown in their own fields and produce semi-finished products (raw materials for further processing) or finished products. However, a significant share of market participants produce their goods using ready-made pasta. In the second case, raw materials can be purchased from both Russian and foreign suppliers.

In 2019, 612.8 thousand tons of tomato products were manufactured in Russia. A year later, production increased by 3.1%, amounting to 631.8 thousand tons. In 2021, a decline of 4.3% followed - to 604.7 thousand tons. After that, a new phase of growth came: for example, in 2022, an increase of 5.3% was noted with a result of 636.8 thousand tons.

At the same time, the report says that in 2022, under the conditions of sanctions, the supply of tomato paste and mashed potatoes from the EU countries decreased significantly. The own capacities of Russian plants were not enough to cover the increased demand. As a result, domestic producers of tomato products were forced to increase purchases in China and Turkey. At the same time, the weakening of the ruble led to a significant increase in the cost of imported raw materials, which, in turn, provoked an increase in prices for finished tomato products.^[2]

6% increase in sauce sales to 1.28 million tons

In 2023, sauce sales on the Russian market rose by almost 6% compared to 2022 and reached 1.28 million tons. The growth was facilitated by the solution of problems that arose against the background of sanctions, such as a shortage of high-quality packaging and raw materials for some types of products. This is stated in the materials of BusinesStat, published in early February 2024.

The review looks at Asian sauces, mustard, salad dressings and ready-made second-course sauces, ketchup and tomato sauces, mayonnaise and mayonnaise sauces, marinades, soy sauce and vinegar. This takes into account products in different types of packaging, including plastic cans and bottles, as well as glass containers. Significant market players are Mars LLC, Unilever Rus LLC, JSC Agrocomplex Firm named after N.I. Tkachev, JSC Zhirov Combine and JSC Ether.

The research suggests that the industry is showing variable dynamics. Thus, in 2020, sales of sauces in Russia decreased by 3.6% compared to 2019 - from 1.2 million to 1.16 million tons. The volume of sales went up in 2021 amid a recovery in demand from the hotel and restaurant business after the easing of restrictions imposed in the context of the COVID-19 pandemic. Sales increased 6.7% year-on-year, reaching 1.23 million tonnes.

However, in 2022 there was another decline. Demand decreased by 1.8% - to 1.21 million tons. Due to the deteriorating geopolitical situation, prices increased. In addition, a shortage of raw materials and packaging materials provoked a reduction in the assortment. At the same time, as noted in the BusinesStat review, despite the crisis, sales of sauces remained generally stable. In 2023, suppliers managed to stabilize product prices by overcoming most of the problems with packaging and raw materials. As a consequence, the market has returned to growth.^[3]

2022: Mayonnaise sales down to 714 kt

In 2022, 714 thousand tons of mayonnaise and mayonnaise sauces were sold in Russia, which is 10.6% less than in 2018. Such data analysts BusinesStat published at the end of October 2023.

Researchers attribute the fall in the market to the growing popularity and expansion of the range of sauces relatively new to the Russian market: Asian sauces, a variety of salad dressings and ready-made sauces for second courses. A slight increase in sales volumes was noted only in 2021 (by 2% compared to the previous year), which was due to the recovery in demand after the COVID-19 pandemic, the study notes.

According to experts, the 2022 crisis only affected mayonnaise sales. High inflation rates, stagnation of household incomes and general economic uncertainty led to a contraction in demand for more expensive products, BusinesStat points out.

Mayonnaise dominated the sales structure, the share of which in 2018-2022 was almost 90%. Mayonnaise sauces accounted for about 10% of total sales. Over the five years, the volume of sales of both mayonnaise and mayonnaise sauces has decreased. At the same time, each of the markets reacted differently to crisis phenomena. So, in 2020, mayonnaise sales showed a sharper drop: under the conditions of the suspension of the work of catering establishments, consumers spent a lot of time at home, cooked on their own and more often purchased mayonnaise sauces to give the restaurant taste to home dishes. In addition, the pandemic forced Russians to take care of their health, and the low fat content of mayonnaise sauces relative to mayonnaise provided mayonnaise sauces with a more stable demand from adherents of a healthy lifestyle, the report adds.^[4]

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