Magnit relies on regional producers of dairy products

According to the speaker, the development of local regional producers in the traditional dairy sector is the main current trend, on which Magnit makes the main bet. The healthy lifestyle that is gaining momentum in Russia contributes to this.

‘We are witnessing the emergence of strong regional players with serious brands, we see that those producers who were engaged in raw materials 5-10 years ago have now started making their own trademarks,’ said the head. ‘They have serious ambitions to "capture" the regions and enter the federal market. These are always products to which a local buyer is loyal, buys them and recommends them to relatives and friends.

According to the expert, the development of regional brands greatly helps the retail chain Magnit in the sale of products. Two years ago, the retailer, with a view to the future, organized a regional structure with offices in eight regions of the country, which are tasked with increasing the number of local manufacturers cooperating with the retail chain.

‘Part of this trend was the development of small farms, whose products are increasingly appearing on the dairy and cheese shelves of the retail chain,’ the speaker said. ‘We are still talking about small volumes, short shelf life of products, which is a certain challenge for the retail chain Magnit, and the revision of all positions, including manufacturers.

According to Sergey Ermolaev, working with farms due to insufficient supply volumes brings additional difficulties to the retailer in logistics, but despite the difficulties, Magnit satisfies small producers’ needs. As an example, the head cited a farmer from Krasnodar region, who began shipping dairy products to the southern districts of the region, but could not go to the northern ones yet, because there are difficulties with logistics.

‘We understand such moments and are ready to work together on solving these issues,’ the expert stressed.

He also reported on the development of such a trend as own trade mark, which is being implemented by the retailer for several years and which "gives an annual increase".

Another trend - an increase in demand for vegetable milk and vegetable products - still looks modest.

‘Here, of course, you need to understand that the absolute sales volumes of plant products are small, calculated in tenths of a percent,’ concluded the head. ‘The buyers are the younger generation, they appreciated the plant products, they like the fact that they are in bright packages, which is also in trend. You can write a post on Instagram and get a like. We, as a market, of course react to this. We are closely following this trend. Of course, we are not ready to give half of the shelf for such products now, since traditional dairy products are still in priority.