To be a trend: dairy factories told about the market trends

New products, tracking market preferences, brand management and constant modernization – the key to the success of a dairy plant, not only in the world but also in Russia. The DairyNews talked to the companies and experts of the market of milk processing on the prospects of the sector.

TRENDS

Euromonitor identifies several types of modern buyers and food products interesting to them: among them are healthy food products, products in a convenient packaging format for snack on the go, special products according to the type of health or preferences (this includes products for diabetics), functional products. Euromonitor experts emphasize that in the context of the widespread development of the Internet environment, companies should be represented on the Internet as much as possible, including for rapid response to consumer changes and rumors, to track information about their own brands.

In Russia, a separate trend is the popularity of economical and practical packaging for products. In recent years, the demand for both large "family package" and category of ready-to-eat, cut products has steadily increased.

The development trend of the Russian dairy market lies in two dimensions: mass product and value-added products. "Among the latter, the category of Greek yogurts is leading and is undergoing the greatest development: desserts and a variety of curds. In our company, we have been working with such products for a long time, have implemented many global projects and continue to move forward. The main issue in the development of such products is not so much in investment but in the proper management of technology and product range, as well as brand", - said Alexander Gelfand, Director of business development at Boccard in Russia in his comments to The DairyNews.

The expert stressed that the country still has a large number of plants in need of reconstruction, where, due to an overly conservative approach to solving issues with the food matrix, they have problems with finances. "There will be enough work for everybody! The growing need to improve the efficiency of mass production and ensure the return of value - added products, with the right approach, will be able to provide tasks to all the links of the value chain: from farmers and equipment manufacturers to processors and sellers of products", - said Gelfand.

Sergey Baranov, General Director of "Kieselmann Rus" stressed that the company captures a number of trends in the market. In general, they are in tune with global trends. Among the trends: an increase in the supply of functional products that are products of deep processing of milk or whey. These products can include sports nutrition and functional food for different age categories, as well as functional food designed separately for women and men. "Moreover, all these groups can be combined in different combinations, thus blurring the boundaries between these subgroups, for example, sports nutrition for women of age "30+", - said Sergey Baranov.

Bashir Uzdenov, managing partner of LLC “Basson” notes that there are no trends that can “blow up” the Russian dairy market yet. Industry analysts agree with him: the consumer market is gradually entering the global trends.

According to experts, the consumption of vegetable analogues of dairy products is going slower on the Russian market than in the world. This is due to the culture of consumption. Bashir Uzdenov, in his turn, notes that today the financial meaning of products with vegetable fats is lost.

"Due to the fall in the price of milk, processors are changing the benchmark towards the production of natural products. There appear companies that are inclined in the direction of increasing receiving of milk and reduce the production of products with the use of vegetable components. The financial meaning of the production of products based on vegetable ingredients is lost", - said Bashir Uzdenov.

Modernization is a renewal of outdated equipment and expansion of production lines. Supply of equipment and modernization of processing is a long process. The minimum project lasts from 4 to 6 months, global modernization takes 8-9 months, expressed his opinion the expert. Therefore, the decrease in the price of raw milk and other actual problems of the dairy market have not yet affected the change of technological lines, the vector has not swung significantly.

ENTERPRISES ABOUT TRENDS

Players of the milk processing market emphasize that modernization and monitoring of consumer demand trends remain the most important factors for the development of plants. Despite the steady demand for the traditional segment from local dairy producers, consumers in the regions as well as in the capital strive for new tastes and show new preferences for packaging. At the same time, the trend of demand for products of a lower price category remains stable; however, consumers carefully study the packaging and strive for a combination of "optimal price-quality".

Artem Bagreev, General Director of LLC «Derevenskoe molochko» 

– I do not notice any fundamental innovations in the production of classic dairy products in recent years. As a trend, we can note the general course on import substitution of cheeses, production of desserts and products of the so-called "youth" line with the use of functional packaging. At the same time, the classic range is still dominant, it is necessary to rely on practical, cost-effective package. Our company spends about 10% of revenue on innovation and modernization of production.

Anatoly Losev, General Director of the company «Molvest»  

– On the scale of the industry modernization of enterprises is aimed at increasing the shelf life of fresh dairy products. The company spends 30% of the profits on the modernization of production. It is necessary to work on cleaning the incoming of milk, creation of clean conditions for making products and proper packaging using the packaging line of the latest generation. In addition, it is important to observe the closed movement of the product from the process to the packaging. 

Unfortunately, the demand for products with a low price is steadily growing, which is most evident in the categories of cheese, cottage cheese and milk. People tend to want to buy food cheaper. It is necessary to remove the goods of inadequate quality from the shelves; this is the main thing to fight. It is not normal that under the guise of milk falsified products and surrogates are sold. This misleads the consumer.

Vladimir Starkov, owner of the cheese factory «Syr bez Dyr» 

Innovation implementation is a periodic thing. They are not a continuous stream, unfortunately. Therefore, the implementation is going by leaps.
In my opinion, the trend of consumer demand in the current period is a fluctuating decline in demand for elite varieties, as, for example, Gorgonzola, and as a result flowing into segments of daily demand and lower price category.

At my enterprise I am not able to develop the culture of cheese consumption. What remains is only communication at fairs and also education of managers and sellers of the shops how to sell my cheeses.

Unfortunately we do not cooperate with trading networks; today they are not interested in craft cheeses. All the networks need is a cheaper product with an increased shelf life due to the use of what we do not want to use.

I do not know who of our Union of cheese makers is working with trading networks. There are large dairy producers, according to my information, they cooperate at a minimum of profitability, they live somehow at the expense of turnover, which is impossible in the niche of handmade craft cheeses.

Sergey Anisimov, General Director of «Dairy Plant “Stavropolskiy” 

The consumer today chooses healthy natural products at an affordable price.

Actual at the moment is: 

• enrichment of dairy products with probiotics, prebiotics, symbiotics, 
• the use of fillers, which include the so-called superfoods (flax seeds, Chia seeds, Goji berries, etc.), 
• additional enrichment of dairy products with protein, 
• reduction in the amount of refined sugar in recipes, 
• the use of natural ingredients that allow you to produce products with a "Clean label". 

The most developing categories today are yoghurts (drinking and thick) and dairy desserts (including the ones on the basis of yogurt and cottage cheese), and in the case of our company ice cream.

We closely follow trends and innovations around the world. For the recent years, the motto of our enterprise is the phrase of Hippocrates "Let food be your medicine, and your medicine be food". We are actively developing all the areas mentioned earlier. In addition to the enrichment of dairy products with pro-, pre - and symbiotic, superfoods and protein, we are also actively expanding the range of low-lactose products and import-substituting cheeses. 

We will remind, such major industry players as Danone and PepsiCo plan to spend significant funds on the modernization of factories and the introduction of innovations. For example, according to open data, in the period from 2014 to 2017 Danone invested in the modernization of sites in Russia about $400 million. PepsiCo in early 2018 completed a program for startups in the field of food and beverages, selecting in Russia 12 projects related to healthy nutrition. The company can buy out the most successful products based on the results of the test market. This will give PepsiCo the opportunity to gain a foothold in the Russian market of healthy food with a turnover of 870 billion rubles per year, analysts say.

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