I would like to note the serious changes in the Russian confectionery market, which affected me, my family, and also did not pass by each of you and your loved ones. These changes open up new opportunities, and today a candy store as a business is promising and timely. What changes are these, why small businesses in the confectionery industry are getting new chances for development, we will look into this in a detailed article.

 

The history of the confectionery business goes back more than 20 centuries. The first traders of sweets arrived on the territory of modern Europe from the east back in the 6th-5th centuries BC. Primitive candies, simple pastries, cottage cheese and sugar baklava were on the tables of the ancient nobility. In the Middle Ages, spices were brought to Europe from India and chocolate from South America. This was a revolutionary moment in the history of the confectionery business.

Coffee shops and chocolate shops opened in France, and scones (a type of cupcake) that are still popular to this day appeared in England. Russian pretzels and pies also attracted interest abroad. However, they were able to combine cultural traditions, different techniques for making confectionery products, textures and completely different ingredients only towards the end of the 18th century, and already the next century is considered the birth of world confectionery cooking. France is rightfully considered its homeland. But there is another, no less popular direction of confectionery art - oriental.

It is difficult to compare French desserts and oriental delights, baklava and Saint Honore, Turkish delight and Tiramisu. However, oriental techniques for preparing sweets account for about 40% of fans all over the world, so one cannot ignore them.

Consumer demand for sweets has remained at a high level for almost 300 years. Moreover, the change in market conditions is obvious: if back in the 1920s gingerbread and cakes were bought as a festive attribute, now the culture of sweets consumption is bringing sweet dishes into everyday consumption.

We regularly see confectionery shops and coffee shops on the streets offering a wide range of complex and simple sweets. Strudels, cheesecakes, brownies, muffins, cupcakes await us at gas stations, in the halls of business centers, in parks and theater buffets, in street stalls and even McDonald's. Confectionery products have moved from the group of elite privileged products to the category of fast food.

But even this serious market change is not the root cause for a new round of development in the small business segment. The fact that cakes and pastries have become common, affordable “fast food” for every day has led to their reduction in price at the expense of quality. Instead of butter, confectioners use spreads, instead of vegetable fats - animal or synthetic fats, etc. This makes the cost of the product lower, which allows it to survive in competition.

Main features of the Russian confectionery market

The Russian confectionery environment, thanks to the fundamental school of the Soviet Union, has a good, high-quality theoretical and practical base. However, due to the closed nature of Soviet policy, the moment of flexibility was lost. Now the dynamics of development of domestic confectionery shops is significantly lower than Western ones. However, if we compare the quality of in-line products, then even taking into account the trend of cheaper products, the products of our Russian companies can be called tasty and edible, which, alas, cannot be said about many European products (I emphasize that we are not talking about private confectionery shops yet).

Features of the Russian confectionery market are:

• short lead time for products;
• the complexity of large-scale logistics and long-distance delivery;
• a huge number of types and subtypes of products;
• complete dependence of manufacturers on the quality of raw materials from suppliers (ingredient goods);
• tradition of consuming homemade baked goods;
• a wide selection of authentic, local raw materials for fillers (berries, fruits, nuts;
• intense competition in the niche of inexpensive confectionery products and low competition in the segment of natural, high-quality, expensive products;
• the prevalence of small businesses in the fresh baked goods segment.

Now, as mentioned above, the Russian confectionery market is filled with low-quality, cheap products, and finding a tasty, beautiful, and at the same time natural and safe for children’s health cake is practically impossible.

Private traders who make cakes to order, small mini-bakeries, private confectionery shops that operate 1-2 cafes or a couple of shops survive on this dissonance. Therefore, now a candy store as a business is interesting and has a good income prospect.

Experts comment on the market:

Alto Consulting Group, in its study of the Russian confectionery market, focuses on the constant and non-stop growth of piece goods turnover. Number of products. produced on the territory of the Russian Federation is growing, and so is consumption. However, compared to the price increase in 2013, the current market, despite major changes in the currency ratio, has remained virtually unchanged. The quality of the ingredients decreases, due to this, the retail price of the confectionery product, instead of a natural increase, is kept at the same level.

Now let’s take a closer look at the prices themselves, broken down by federal districts of Russia:

This picture demonstrates a hypothesis stating that a decrease in quality and a decrease in production costs frees up a niche for high-quality fresh baked goods and/or complex confectionery products with a short shelf life. This is exactly the segment in which small businesses can thrive. We have already discussed how to open a candy store or a confectionery shop from scratch in one of the articles, so we will not dwell on this point, but will limit ourselves to the statement that this business is now promising for a number of reasons:

• large manufacturers work on a whim, so they strive to maintain maximum sales times, which cannot be achieved by using exclusively natural ingredients;
• The need for high-quality, natural and safe products remains increasingly unfulfilled, especially in the children's product segment;
• The market requires great flexibility from manufacturers, the ability to follow fashion and capture changing taste preferences, which large factories and concerns cannot technically implement or do it very clumsily and for a long time.

Here is evidence of a change in the structure of demand, as can be seen from the graph below, an increase in the production of cakes and pastries for non-perishable storage

Rice. 2. Number of tons of products by type of confectionery products produced in Russia for the period 2010-2013. Dynamics of market development in unit equivalent.

How the confectionery business works: description of business models and brief market analysis

As in any other segment, in the confectionery business there are several models implemented for the purpose of making a profit:

Model 1: Production and sale of own products through a network of company stores and/or contractors (a striking example is the Red October Confectionery Factory, Moscow). The advantage of this model is direct communication with the consumer, and the disadvantage is high economic risks.

Model 2: Production of products to order from contractors (this is how the Lironas Confectionery Company works, Volga region). The advantage of the model is the reduced costs of selling products. but the downside is... that the manufacturer actually cannot track the buyer’s reaction to changes in the product portfolio and prices. quality and does this through focus groups and research. which is also not cheap.

Model 3: Production of products and sales through franchise clients. In this case, the manufacturer sells its products in stores operating under its brand, for example, the Medobory confectionery shop, Crimea. The advantage of the model is that there are virtually no costs for promoting sales and creating a distribution network, but the disadvantage is that the company’s reputation is unmanageable (if any of the franchise clients behave inappropriately with the buyer, the manufacturer’s image suffers).

In other words, you need to separate two business processes:

1. production of confectionery products and their sale. There are companies that combine these two processes.
2. production and wholesale, or wholesale purchase and retail. There are enterprises that use only one process in full, and the second - in a reduced manner.

Among the largest Russian manufacturers, the following can also be noted: the KDV Yashkino confectionery factory (Kemerovo region), the Konti confectionery group of enterprises, OJSC Lipetsk confectionery factory Roshen, the Akkond confectionery factory (Cheboksary), OJSC Kraft Foods Rus (Vladimir region), confectionery factory "Chipita" (St. Petersburg), confectionery factory "Galan" (Krasnodar region), JSC "ROT FRONT" (Moscow).

Important points in organizing a confectionery business are:

• selection of a niche for production/sales of products (today the snack group is full, and an acute shortage is observed in the field of short-term storage cream products);
• selection of location and competent calculation of turnover of a confectionery outlet;
• supplier selection.

It is on the choice of supplier that I would like to focus your attention. When a novice entrepreneur is about to plunge into the confectionery market, it is important for him to get a marketable product. To do this, you need to understand what kind of products you would like to sell.

Confectionery products are products of daily demand: on average, each resident of Russia in 2012 consumed 23 kg of sweets, of which 12 kg were sugary products, and 11 kg were flour products. At the same time, about 18% of sweets are bought in Moscow.

Competition in the Russian confectionery market is high. Today, there are about 1,500 organizations in the industry in all regions of the Russian Federation and more than 15,000 local confectionery shops (Rosstat data). enterprises producing 55 percent of the total annual turnover.

The largest segments of confectionery products on the Russian market:

• chocolates - 21%;
• all types of cookies (including crackers) - 20%;
• cream products (cakes, pastries) - 8%;
• slab and figured chocolate - 8%.

In the period 2010 - 2014, according to Rosstat, the share of imports was constantly decreasing and before the introduction of the food embargo in August, it was 12.2%. Domestic production, respectively, is about 87.8%. The main suppliers of sugar confectionery products to Russia (sugar products include sweets, caramel, toffee and dragees):

Over thirteen years (2000-2013), according to Rosstat indicators, the demand for raw materials such as sugar has shown constant growth, and since sugar is an integral ingredient in confectionery products, experts tend to see a direct relationship with the growth in demand for ready-made confectionery. The average growth rate is 5% annually. Those. we can say that every year the consumption of confectionery products in Russia increases by 5% (both in value and piece equivalent).

Experts believe that by 2017 the market size will reach $4.5 billion.

Since confectionery products are not essential products, the demand for them is determined by traditions and external market influences.

The structure of food expenses of the average Russian family includes about 9.5 - 15% of expenses attributed to confectionery products. With the food basket of 1 Russian family (3 people) amounting to 9.5 thousand rubles, an average of 1,500 rubles per month is spent on confectionery products. If this figure is related to the number of households in Russia (52,707 thousand), we obtain the nominal market volume: 79 billion rubles/month.

Analysis of seasonality of the confectionery business

Seasonal fluctuations in demand for confectionery products are an objective reality in all areas of the market. This factor has a significant impact on both sales volumes and their structure. Therefore, a comparative analysis in this industry is most adequately carried out by comparing the same periods of the reporting and previous years, since adjacent periods can differ radically in the level of turnover and sales structure depending on the influence of holidays, fasting, the holiday season, the appearance of substitute goods (berries, fruits), etc.

Below are seasonality coefficients calculated based on the base December - as the month with the highest turnover in the confectionery industry, due to the consumer’s pre-New Year mood (see Figure 1, Diagram 1).

Table 1. Seasonality index of the confectionery business, due to traditional holidays and climatic conditions.

				Impact on consumer activity
				New Year according to the old calendar
				Easter, parent's day
				the appearance of the first seasonal berries
				Great demand for berries and fruits
				holiday season in coastal and tourist regions
September				holiday season in coastal and tourist regions
				weather driven demand
				New Year, corporate holidays

The same color scheme highlights periods with approximately the same level of buyer activity.

Thus, seasonal phase 1 (orange) is characterized by increased demand due to the presence of holidays. In this phase, February is weak due to the short monthly period.

Phase 2 of seasonality (blue) is characterized by a sharp reduction in demand until July, which is associated with Lent, the emergence of cheaper substitutes, and the onset of a warm period. In April, the production structure changes: sales of cream products by weight decrease, sales of flour products (Easter cakes) increase, which affects trade turnover. This phase is most in need of marketing stimulation and maintaining sales volume.

July (yellow) is a transition month from phase 2 to phase 3 (green), characterized by a gradual increase in trade turnover and, accordingly, output volume. In terms of seasonality coefficient, it is comparable to phase 4 (yellow) of consumer activity observed in October and November, where the opposite trend is observed - a decrease in trade turnover and output volume due to the outflow of tourists from recreational areas, the absence of traditional holidays until mid-December.

December (red) is the month with the highest turnover in the industry. These seasonality coefficients are average for the market as a whole.

Small business in the confectionery arena

The implementation of a confectionery business in the private enterprise segment is, as a rule, a cafe-confectionery. There are few options for implementing this format: a private owner can organize his own small production (a confectionery shop with a capacity of 100-300 kg per day) or purchase ready-made confectionery products from nearby suppliers.

The advantages of own production are direct contact with the consumer, the uniqueness of the offer and the ability to adapt the assortment to the needs of visitors. However, this is also the difficulty: to produce a new type of product, the workshop must develop technological maps and change the production scheme. These are time and financial costs.

When purchasing products from a large supplier (or several), the exclusivity of the product itself is lost, but the risk of unjustified costs for creating production lines is eliminated. In addition, this scheme pays off more quickly.

Therefore, you should start opening a cafe-confectionery with a fundamental decision: we produce it ourselves or purchase finished products from a large manufacturer. If an entrepreneur nevertheless decides to have his own mini-workshop, then he should take into account the costs of a technologist, replacement confectioners, equipment and warehouse space where both finished products and blanks will be stored.

It is warehouse storage that novice businessmen often do not provide for, which leads to enormous problems: the products are light, but very voluminous and capricious. For example. to place 20-25 standard cakes, you need a rack with shelves 1.5 * 1.5 m in a cool place with a sanitary permit. And if we are talking about baking, then the cornerstone is the durability of the equipment, since such products cannot be prepared for use.

Benchmarketing: successful examples of small confectionery business implementation

Foreign models:

Ukraine

An unexpectedly interesting confectionery shop operates in the small Ukrainian town of Melitopol. Despite all the provincialism of the city itself, the confectionery surprises with its sophistication, competent products, wide coffee list and original recipes:

Coffee shop and confectionery "Bourgeois", Melitopol - restaurant project. This is a full-fledged coffee shop with its own confectionery shop. Interesting and sophisticated products, classic interior and low prices (average bill $10-12).

France

Pastry shop CAFÉ POUCHKINE, Paris - pastry shop in the style of a French palace of the 18th century. Visitors can choose from cakes with cream, honey, berries, fruits, jam, macaroons, custom cakes made from cream, sweets, and powdered sugar. Average bill$5-25

1

The purpose of the study is to study the purchase decision-making process, reactions to purchases, and factors determining the behavior of these consumers. In order for market analysis to be truly objective, it is necessary to comply with scientifically based rules of the survey procedure developed within the framework of social sciences. Correct positioning of functional products ensures their successful promotion on the market. The most popular flour confectionery product among respondents is cookies (28%), 25% of respondents more often buy waffles, gingerbread - 15, and only 5% - cakes. As a result of the study, it turned out that the main reasons for the low demand for preventive products, from the point of view of consumers, are: lack of awareness of the population about the medicinal properties of products, high prices, insufficient choice and unsatisfactory quality. Despite the insignificant interest of respondents in the nutritional value of confectionery products, most of them consider it necessary to produce products for preventive purposes. Only 4 % of respondents have a negative view of this issue. The motivation for respondents' preferences when making a purchase consists of income level, conservatism in demand, health status, limited choice, proximity to places of sale, appearance, etc.

Marketing

research

motivation

confectionery

1. Dzhakhimova O.I., Krasina I.B., Tarasenko N.A. Application of functional additives in the production of flour confectionery products // News of higher educational institutions. Food technology. – 2013. – No. 1 (331). – pp. 40–42.

2. Evdokimova O.V. Methodology for increasing the efficiency of promoting functional food products to the consumer market / O.V. Evdokimova, E.P. Kornena, T.V. Pershakova, A.A. Shchipanova, R.S. Fuchs // News of universities. Food technology. – 2009. – No. 2–3. – pp. 107–109.

3. Eremina O.Yu., Ivanova T.N. Analysis of the share of bread products in the consumer basket and cash income of the population // Food industry. – 2010. – No. 5. – P. 42–44.

4. Molchanova E.N., Shipareva M.G., Karusheva M.G. Marketing research of consumer preferences for flour confectionery products // Confectionery production. – 2012. – No. 5. – P. 28–32.

5. Soldatkina O.V. Results of a marketing study of consumer preferences in the market of bakery and confectionery goods in Orenburg // Bulletin of OSU. – 2011. – No. 5 (124). – pp. 59–63.

6. Tarasenko N.A. The use of dietary fiber obtained from sainfoin seeds in the production of waffle crisps // News of higher educational institutions. Food technology. – 2014. – No. 4. – P. 53–55.

7. Tarasenko N.A. Development of a new type of confectionery product - SPA waffles // News of higher educational institutions. Food technology. – 2014. – No. 5–6. – P. 50–53.

8. Tarasenko N.A. Development of technology for functional wafers using stevioside: dis. ...cand. tech. Sci. – Krasnodar, 2010. – 181 p.

9. Tarasenko N.A., Nikonovich S.N. Development of a recipe for praline sweets with a functional fat component // News of higher educational institutions. Food technology. – 2014. – No. 1 (337). – pp. 64–66.

From the perspective of modern marketing, in order to act more effectively in the market, the manufacturer needs to “create his consumer,” know his preferences in choosing goods and better adapt to his requirements. For this purpose, we conducted a study of consumer motivations and preferences when choosing confectionery products.

The purpose of the study is the study of the purchase decision-making process, the reaction to the purchase, and the factors that determine the behavior of these consumers. In order for market analysis to be truly objective, it is necessary to comply with scientifically based rules of the survey procedure developed within the framework of social sciences.

To develop and introduce new types of products, it is important to know the preferences of the population regarding goods of a particular group, in particular flour confectionery and culinary products, the level of consumption of which in Russia is quite high. The share of products for preventive medical purposes is on average 8-10% in Russia. In addition, there is a tendency to increase the volume of production of expensive products high in fat and sugar, which contradicts the basic principles of the theory of healthy eating.

Market analysis of flour confectionery products, as well as marketing research, make a significant contribution to the development of the production of these products.

As a result of one such study, it was revealed that the majority of respondents prefer to consume flour confectionery products several times a week (41% of men and 59% of women). Considering also that more than 20% of respondents consume these products daily, we can talk about the significant role of flour confectionery and culinary products in the nutrition of citizens. It was also recorded that waffle products are mostly preferred by people over 55 years of age.

To the question: “Would you consume flour confectionery and culinary products more often if they included healthy products?” 53% of men and 44% of women responded positively. This is especially welcomed by men under 25 (64%) and 45-55 years old (71%), as well as women 35-45 years old (70%). About 35% of respondents are not interested in the availability of healthy products.

The importance of the low calorie content of flour confectionery and culinary products was noted by only 27% of men and 46% of women. Among them, women 25-35, as well as 45 years and older (more than 67% in each category) and men over 55 years (37%) are especially attentive to this indicator.

In the modern world, food products for preventive purposes are becoming increasingly important. During their production, special attention should be paid to consumer goods.

As part of government policy, the share of consumer products fortified with vitamins and minerals should be at least half of the total production volume. Flour confectionery products remain one of the staple foods of the majority of the population, therefore the creation of products that are not only food, but also have therapeutic and prophylactic properties is an important reserve for improving public health. Correct positioning of functional products ensures their successful promotion on the market (Fig. 1). In this regard, research into consumer motivations and preferences when choosing confectionery products is relevant.

Cookies are the most popular (28%) flour confectionery product, 25% of respondents buy waffles more often than gingerbread cookies (15%), and only 5% buy cakes.

As a result of the study, it turned out that the main reasons for the low demand for preventive products from the point of view of consumers are: lack of awareness of the population about the medicinal properties of products, high prices, insufficient choice and unsatisfactory quality.

Consumer opinions about the most significant indicators when purchasing preventive products are presented in Fig. 2.

Thus, the most significant criteria for buyers are freshness, taste and smell, and appearance.

Despite the insignificant interest of respondents in the nutritional value of confectionery products, the majority of them (70%) consider it necessary to produce products for preventive purposes. Only 4% of respondents have a negative attitude to this issue.

Rice. 1. Diagram of the relationship between respondents’ attitudes towards confectionery products for preventive purposes

Rice. 2. The importance of the properties of flour confectionery products for consumers

The motivation for respondents' preferences when making a purchase consists of income level, conservatism in demand, health status, limited choice, proximity to places of sale, appearance, etc.

Analyzing the data obtained, we found that the main motive is the conservatism of consumer demand, in second place is the level of income.

Currently, the consumer of confectionery products strives to buy high-quality products from a wide range, without spending effort on searching for places of purchase, purchases them in close proximity, without paying attention to the manufacturer.

Thus, marketing studies of consumer motivations and preferences when choosing confectionery products led to the conclusion that ensuring public health is possible through an integrated approach to the selection of functional ingredients for fortifying confectionery products.

Based on all of the above, the department of technology of grain, bread, food-flavoring and subtropical products is developing flour confectionery products using functional food additives.

Thus, the authors studied the chemical composition and properties of dietary fiber obtained from the seeds of sainfoin, a plant of the legume family, and investigated the possibility of introducing dietary fiber in the production of a new type of flour confectionery product - wafer crisps by replacing from 3 to 10% of flour. It has been established that dietary fiber from sainfoin seeds reduces the moisture content of products and wetness, which can be explained by a significant increase in the density of the waffle dough with an increase in the dosage of fiber and the reduced humidity of the additive itself, which has a reduced water absorption capacity. As a result, the optimal dosage of 5% fiber by weight of flour was chosen and the recipe for wafer crisps “Health” was developed. The use of dietary fiber obtained from sainfoin seeds in the production of waffle crisps will make it possible to obtain products that have a positive effect on the physiological functions of the human body and enhance the taste and aroma of the finished products.

The process of creating high-quality products that can best satisfy the needs of modern consumers requires a clear understanding of current market trends and the introduction of innovations. In this regard, scientists are conducting research to create a new type of waffles, namely SPA waffles. SPA waffles are specially produced for use during water procedures in order to achieve maximum relaxation and for a general tonic effect. It has been established that the mineral water included in their composition, due to its healing properties, has a beneficial effect on health, well-being and improves vitality. When assessing the quality of finished products using standard methods, the physical and chemical quality indicators of the control and prototype samples were determined. Test samples of spa-wafers prepared with the addition of functional ingredients differ in the main indicators from the control sample, they are completely free of sucrose and the protein content in them is twice as high, and they also have antioxidant and tonic properties due to the introduction of kola nut into the recipe and phospholipid product "Fais".

If we talk about trends in the market for preventive products, then gradually but surely healthy confectionery products are emerging from the niche of special food for educational, medical, health, and sports institutions. The fashion for a healthy lifestyle, as well as the desire of buyers to have the same model body proportions, comes into conflict with established eating habits, and in this situation, manufacturers who can offer traditional products with improved, lighter content benefit.

The publication was prepared within the framework of the scientific project No. 15-36-01235 dated June 3, 2015, supported by the Russian Humanitarian Foundation, “Social aspects and prevention of diabetes mellitus and obesity.”

Reviewers:

Shazzo A.Yu., Doctor of Technical Sciences, Professor, Head of the Department of Technology of Grain, Bread, Flavoring and Subtropical Products, Kuban State Technological University, Krasnodar;

Ilyinova S.A., Doctor of Technical Sciences, Professor of the Department of Technology of Fats, Cosmetics, Commodity Science, Processes and Devices, Kuban State Technological University, Krasnodar.

Bibliographic link

Tarasenko N.A., Baranova Z.A. MARKETING RESEARCH OF CONSUMER MOTIVATIONS AND PREFERENCES WHEN SELECTING CONFECTIONERY PRODUCTS // Fundamental Research. – 2015. – No. 9-1. – pp. 174-177;
URL: http://fundamental-research.ru/ru/article/view?id=38989 (access date: 04/20/2019). We bring to your attention magazines published by the publishing house "Academy of Natural Sciences"

* The calculations use average data for Russia

1. INTRODUCTION

Confectionery products are high-calorie and easily digestible food products with a high sugar content and characterized by a pleasant taste and aroma. Typically produced using the following ingredients: flour, sugar, honey, fruits and berries, milk and cream, fats, eggs, yeast, starch, cocoa, nuts and so on.

Confectionery products can be classified as follows:

• Sugary group

o Meringue, meringue – baked whipped egg whites

o Jam, marmalade, jam, marmalade - fruits or berries boiled in sweet syrup; flower petals and some vegetables can also be used

o Grillage - candies made from caramelized sugar with the addition of crushed or crushed nuts

o Jelly is a sweet dish made from fruit or berry juices with sugar and a gelling agent

o Marshmallow, marshmallow – a sweet piece of fruit pureed with sugar and beaten egg white

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o Sweets, toffee, caramel, lollipops - small sweets of various shapes made from caramelized sugar, chocolate, molasses, condensed milk and other ingredients

o Chocolate – a confectionery product made from ground cocoa beans and various fillings

• Flour group

o Cookies and waffles – piece dough products; waffles consist of several layers of dough coated with filling; cookies may or may not contain filling

o Sweet pies, pies, cheesecakes, rolls - bakery products made from yeast, puff pastry, unleavened, butter and other types of dough, of various shapes and sizes, with or without filling, baked or fried

o Gingerbread – hard baked goods made from flour, honey and spices

o Cakes, pastries - desserts made from biscuit, choux, puff pastry, shortbread dough with cream, candied fruits; usually have a beautiful finish

Traditional confectionery products, as a rule, have high nutritional value due to their high content of carbohydrates, proteins and fats.

2. MARKET ANALYSIS

A distinctive feature of the confectionery market in Russia is the high quality of the theoretical and practical base, which is a direct legacy of the USSR. Even taking into account the trend towards cheaper mass products, the quality of Russian products is significantly higher than the quality of Western analogues.

The features of the Russian confectionery market include:

Short lead time for products

Complex logistics due to long distances and quality of transport infrastructure

The complete dependence of manufacturers on the quality of the raw materials used (however, this is typical not only for Russia)

Tradition of homemade baked goods

A wide selection of local raw materials for fillers, and in each region these can be unique berries, fruits, etc.

High level of competition in low price segments and almost complete absence in the premium segment

In the baking segment, the main players are small businesses

There are several business models used today by market players:

Production of confectionery products and their sale through our own retail chains (or through contractors) - the revenue is maximum, but the costs and financial risks are high

Production of products to order (“white label”) - due to this, sales costs are reduced, but there is no direct communication with the consumer, which makes it difficult to respond to the end client’s requests

Manufacturing products and selling them through a franchise network is a plus here in minimizing sales costs, but there are reputational risks associated with the actions of franchisees

The Russian confectionery market was one of the leading in terms of growth until 2015. Macroeconomic factors, the weakening of the ruble exchange rate, and a decrease in real incomes of the population, as well as other sectors of the economy, had a negative impact. All this led to a decrease in demand for confectionery products. When food costs account for more than 50% of household income, the demand for non-essential goods is significantly reduced. First of all, this concerns imported products - chocolate and flour, the cost of which has increased several times due to the weakening of the ruble. The volume of imports of all types of confectionery products fell by at least half. Imports of chocolate and cocoa-containing products fell by 27.6%.

Export volumes in physical terms remained at the level of previous years, but at the same time decreased in monetary terms, again due to the weakening of the national currency. The limiting factor, including for exports, was the increase in prices for basic raw materials - sugar, cocoa beans, additives and other ingredients. Some segments, however, are seeing an increase in export volumes. For example, exports of flour products increased by 11.2% to 9.9 thousand tons in volume terms and by 4.1% in monetary terms; chocolate products - by 14.1% to 8.1 thousand tons and by 6.5% in monetary terms. China has become a major export market; until 2016, it was in seventh place in the purchase of Russian chocolate products and in tenth place in the purchase of flour products; in 2016, he came in second place in all positions.

The consequence of changes in the market was a decrease in the consumption of plain chocolate, various cakes and pastries; production volumes of flour confectionery products with a long shelf life, caramel and chocolates increased. One of the drivers of growth in this segment was the increase in export volumes of these types of products. The growth of the segment was also influenced by a shift in demand towards cheaper products - cookies, muffins, waffles, rolls, gingerbread. Their sales grew in volume terms in 2015 as follows: cookies – by 6%, gingerbread – by 7%, waffles – by 9%; in monetary terms: cookies - by 21%, gingerbread by 24%, waffles - by 25%.

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The increase in prices for confectionery products of all types averaged 24% in 2015. The leaders in price growth were sugary confectionery products – chocolate (+38%) and caramel (+35%). This caused a shift in demand towards cheaper products. According to Rosstat, a kilogram of cookies in 2016 cost on average 140 rubles, a kilogram of gingerbread - 118 rubles, and chocolate and chocolate candies - 752 rubles and 570 rubles, respectively.

The increase in prices for sugar, one of the main components of confectionery products, amounted to 9% (futures price) only in the first months of 2016 and amounted to $0.14 per pound. This growth was a record for the last 23 years. The reason for this increase was the statement of the International Sugar Organization about the predicted shortage of sugar due to negative climatic conditions.

A logical consequence of rising prices for ingredients is the search for cheaper substitutes and economical formulations. Manufacturers cannot fully translate the increase in prices for raw materials into sales prices, shifting rising costs to the consumer. Thus, the profitability of production decreases.

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It is noteworthy that, according to the forecast of the Confectionery Market Research Center, in a number of today’s stable segments (cakes and pastries, certain segments of the markets for marshmallows, marshmallows, marmalade, cookies, waffles) the situation is expected to worsen. At the same time, segments that are currently in decline (chocolate, chocolate candies) will recover in the near future.

The formation of demand for chocolate products is largely influenced by the level of well-being of the population. Accordingly, the reduction in real disposable income had a negative impact on this segment of the Russian confectionery market. According to experts, sales in this segment from 2014 to 2016 decreased by 12% in volume terms; per capita consumption decreased from 5.1 to 4.5 kg per person.

Figure 1. Consumption of confectionery products by category in 2012-2016, kg/person.

In 2015, the retail price for sugary confectionery products increased by 11%, and for cookies and wafers - 15%, while the price increase for chocolate was 26%. An important factor is the presence of a large number of brands in the economy segment in the biscuits and sugar products segment and their almost complete absence in the chocolate segment.

Manufacturers began to use packaging reduction in size and weight as measures to stimulate demand. The weight of the piece products themselves has also decreased. Some manufacturers have begun to develop new formats, for example, chocolate bars instead of bars. The positioning of chocolates as a gift with appropriate packaging design has also become typical. Thanks to such marketing activities, market leaders managed to maintain their positions.

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The only category in the chocolate segment that continues to grow is chocolate products with toys for children. This format is being mastered by more and more new manufacturers who have not previously worked in it. The increase in demand is due to the fact that even with a decrease in solvency, parents are not ready to save on their children. The market for chocolate eggs with toys grew by 8-10% per year until 2015, in 2015 the increase was 1.1%, in 2016 – 0.3%.

Looking ahead, until 2020, experts predict growth in the chocolate segment at 1% per year in volume terms. It is expected that the main driver of growth will be the stabilization of the country's economic condition. Price growth in this segment is expected mainly due to inflation, which means there will be no sharp jumps. In addition, the Russian chocolate market has not yet reached saturation, which in the long term creates the preconditions for its active growth.

On the other hand, pressure on the market is expected from the health food market, to which chocolate usually does not belong (with rare exceptions - for example, dark chocolate without additives). This means a slight shift in demand towards various cereal bars, cookies enriched with fiber and vitamins and other similar products.

Among the market trends, the stable state of the premium segment of the confectionery market is noted. In particular, this is confirmed by the emergence of new products in the segment. For example, against the backdrop of a significant part of the population's passion for healthy and environmentally friendly food made from natural ingredients, new products appear such as chocolate using honey instead of sugar, which, according to manufacturers, makes it a “healthy” food. Such products also do not contain preservatives, cocoa butter substitutes or other additives. Nuts, berries, fruits, various seeds, spices and essential oils are used as fillers.

The global craze for unusual chocolate flavors has reached Russia. Some niche manufacturers have begun to offer chocolate with chili pepper, lime, sea salt, coffee and other non-standard additives.

The confectionery market has a pronounced seasonality, which is reflected in sales volumes and financial results. For example, the maximum level of demand is observed in December, which is caused by preparations for the New Year and the purchase of corporate gifts. If we take the December indicators as one, then the first half of the year shows a reduced demand for products - at the level of 0.60-0.65, in July-September demand increases to 0.80-0.85, and in October-November it decreases to 0. 78-0.80.

Current market trends include, first of all, a course towards creating environmentally friendly and high-quality products. Environmentally friendly products mean products made from natural, environmentally friendly ingredients that meet international standards and quality requirements. A fashionable trend that experts note is the interest of consumers in traditional locally produced sweets and, at the same time, the desire to know the place of origin of the main ingredients - for example, cocoa in chocolate products.

The demand for premium products is growing even in times of crisis. This may be explained by the fact that the discerning tastes of consumers are growing, and in this price segment there are the largest number of new products and simply unusual products that are interesting to the consumer.

In the context of a healthy diet, the popularity of dark chocolate is growing, which, according to the advertising campaigns of its manufacturers, is a powerful antioxidant, relieves stress, prolongs the life of cells, and is a supplier of endorphins. The trend in this segment is the production of products under the slogan “healthy nutrition”.

A new global trend, which has not yet shown itself well on the Russian market, is the production of confectionery products for older customers. They can also be classified as healthy food, but their composition differs significantly from other products in this category.

Legislative regulations also affect market growth. In particular, an analysis of world markets shows that a serious impetus to the development of production was given by bans on products using trans fats, which are harmful to human health. The second favorable legislative factor was the permission to use stevia in the European Union - a natural sweetener for diabetics.

According to analytics, the demand for energy products with a high content of vegetable protein is increasing.

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Taking into account long-term development programs for the industry, we can conclude that it has significant development potential and high investment value.

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The cake market is divided into two large segments - products with a short and long shelf life.

Products with a three-day shelf life, which are produced by almost every bakery and confectionery shop, are purchased by about 70% of housewives.

The modern market for cakes and pastries is characterized by the emergence of products that can be stored for quite a long time. The vast majority of companies strive for dynamic development, namely, to enter the federal level. In this regard, a wide variety of pies, gingerbreads and muffins are made that are not afraid of long transportation.

Such products are quite unpretentious in storage. Proponents of the classic preparation of perishable cakes do not perceive competition from such products; they simply do not consider it part of their market.

Today, there is a tendency to purchase cakes not only for celebrations, but also for everyday consumption, especially for shelf-stable cakes. Every year the market range expands, and buyers see a variety of new products from small regional and large domestic manufacturers.

According to experts, the culture of sweet consumption among the population is at the stage of formation, and accordingly, the demand for high-quality confectionery products will tend to increase.

In this regard, the consumption of cakes is increasing, especially if we compare the crisis years of 2008–2009, when there was a noticeable decline in sales.

It is important to note that the market is characterized by inelastic demand, so a slight increase in the cost of products will not affect sales volume. Therefore, it is much easier for manufacturers to adjust pricing in the event of rising prices for ingredients and components.

Consumer preferences in the market of cakes and other flour confectionery products

The most preferred places to purchase confectionery products are shown in the figure.

More and more companies are developing their own market strategy by complete refusal to use traditional recipes. The release of unique products is fully justified, since everything original is in demand. However, there has been a tendency to import similar finished products from the West.

Thus, trading companies that organize regular deliveries from European countries or manufacturers that have adopted the experience and technological support of foreign colleagues are in an advantageous position.

Almost every third consumer purchases cakes and pastries approximately once a month.

Based on marketing research, our compatriots give preference to local producers. The most popular places to purchase flour confectionery products are small grocery stores and supermarkets. In the process of choosing products, the overwhelming majority of people surveyed are guided by previous purchasing experience. After this, attention is paid to the appearance, composition and cost of the cake.

If previously the consumer paid special attention to the qualitative and quantitative composition of the product, today the short shelf life of the product is closely studied, which indicates its naturalness. The modern buyer is willing to pay for exceptional quality and the absence of preservatives, even by reducing the frequency of use.

Due to the limited shelf life (72 -125 hours), the classic cakes and pastries segment is an exclusively local market with competition rules.

The market growth rate is held back by an acute shortage of professional confectioners.

At the same time, the consumption of cakes with a long shelf life is increasing every year. Cakes with whipped cream, as well as yoghurt and curd products are also popular.

The latter variety is characterized by the use of fresh and freshly frozen berries, which contribute to the vitamin content of the cake. Consumers perceive fruit and berry products as a low-calorie confectionery product with obvious benefits for the body.

High-tech business requires significant investment in equipment. Without a marketing budget, it will be quite difficult to organize and arrange supplies of products.

Without a doubt, cakes will be successful if a number of conditions are met: the proper level of quality, excellent taste characteristics, interesting design of the box and finish of the product, a recognizable brand, and an affordable price. Such promising products have every chance of becoming a brand name.

Relevance

The Russian confectionery market is one of the largest markets in the world, second only to the US market in volume terms. One of the features of this market is the high level of concentration - a significant share of its mass segment is almost constantly controlled by 5-6 leading players, and for positions that require a more detailed elaboration of the nomenclature due to regional characteristics, as well as for positions of perishable products, the role of local manufacturers is increasing.

Target

Analysis of the Russian premium confectionery market

Short description

The first chapter of marketing research on the premium confectionery market provides an overview of the market. The main characteristics of the market are considered, the factors influencing the market are assessed, and the share of imports in the market is given.

The second chapter of the marketing research analyzes imports on the confectionery market for 2015. The volume and dynamics of imports are shown, the structure of imports is compiled by producing countries (in physical and value terms) and by manufacturing companies (in physical and value terms).

The result of the study was a forecast of the market situation for 2017.

Content

Part 1. OVERVIEW OF THE RUSSIAN CONFECTIONERY MARKET

1.1.Main characteristics of the market

1.2.Assessment of factors influencing the market

1.3.Share of imports on the market

1.4.Dynamics of market volume and capacity (2013 - 2015)

1.5.Market structure by product type

Part 2. ANALYSIS OF IMPORT ON THE CONFECTIONERY MARKET (2015)

2.1.Volume and dynamics of imports

2.2.Import structure:

2.2.1.by producing countries (in physical and value terms)

2.2.2.by manufacturing companies (in physical and value terms)

Part 3. ANALYSIS OF COMPETITORS

3.1.Largest players in the market

3.2.Market shares of the largest competitors

Part 4. MARKET SITUATION FORECAST FOR 2017

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Excerpt from the study
“...the premium segment confectionery market has significant potential for import substitution, since 25-27% of premium products are imported goods. But it is impossible to predict rapid and large-scale growth in the volume of Russian premium products. Economic factors negatively affect the market situation - they impede the renewal of the material and technical base of production and the growth of incomes of the population. Despite all the difficulties of the economic situation, producers of the premium segment of confectionery products are not threatened with a decrease in consumption, since the market has a certain immunity..."

List of charts

Diagram 1. Dynamics of GDP of the Russian Federation, as a percentage of the previous year

Diagram 2. Dynamics of the US dollar exchange rate against the ruble, Jan. 2015-Oct. 2016, rub. for 1 US dollar

Diagram 3. Dynamics of real incomes of the population of the Russian Federation, 2010 - II quarter. 2016

Diagram 4. Dynamics of retail trade turnover, Russian Federation, 2007-2015, forecast 2016

Diagram 5. Share of imported confectionery products on the Russian market, by weight of goods, 2013

Diagram 6. Share of imported confectionery products on the Russian market, by weight of goods, 2015

Diagram 7. Structure of confectionery production (all types) by Federal Districts of Russia, based on the results of 2015.

Diagram 8. Structure of the confectionery market by type of product, in physical terms, 2015

Diagram 9. Structure of the main types of confectionery products, in physical terms, 2015

Diagram 10. Volume and dynamics of imports of all types of confectionery products to Russia, million dollars, January 2014 - July 2016.

Diagram 11. Volume and dynamics of imports of all types of confectionery products to Russia, thousand tons, January 2014 - July 2016.

Diagram 12. Volume and dynamics of imports of sugar confectionery products (including white chocolate) to Russia, million dollars and thousand tons, January 2014 - July 2016. (code 1704)

Diagram 13. Volume and dynamics of imports of flour confectionery products, cakes, cookies, etc., in million dollars and thousand tons, January 2014 - July 2016. (code 1905)

Diagram 14. Volume and dynamics of imports of chocolate and cocoa products to Russia, in million dollars and thousand tons, January 2014 - July 2016. (code 1806)

Diagram 15. Structure of imports into Russia of chocolate and other prepared food products containing cocoa (HS code 1806), share of the amount in $, 2014.

Diagram 16. Structure of imports into Russia of chocolate and other prepared food products containing cocoa (HS code 1806), share of weight, 2014.

Diagram 17. Structure of imports into Russia of chocolate and other prepared food products containing cocoa (HS code 1806), share of the amount in $, 2015.

Diagram 18. Structure of imports into Russia of chocolate and other prepared food products containing cocoa (HS code 1806), share of weight, 2015.

Diagram 19. Structure of imports into Russia of chocolate and other prepared food products containing cocoa (HS code 1806), share of the amount in $, I-VII months. 2016

Diagram 20. Structure of imports of flour confectionery products to Russia (HS code 1905), share of the amount in $, 2015

Diagram 21. Structure of imports of flour confectionery products to Russia (HS code 1905), share of weight, 2015.

Diagram 22. Structure of imports into Russia of sugar confectionery products (including white chocolate) that do not contain cocoa (HS code 1704), share of the amount in $, 2015.

Diagram 23. Structure of imports into Russia of sugar confectionery products (including white chocolate) not containing cocoa (HS code 1704), share of weight, 2015.

Diagram 24. Structure of imports to Russia of all types of confectionery products, share of the amount in $, 2015

Diagram 25. Structure of imports to Russia of all types of confectionery products, share by weight, 2015

Diagram 26. Market shares of the largest players-manufacturers of the “premium” segment of products

Diagram 27. Dynamics of GDP growth in the Russian Federation, forecast until 2030, %

Diagram 28. Dynamics of retail trade turnover, forecast until 2020

List of tables
Table 1. Factors influencing the confectionery market in the Russian Federation

Table 2. Industrial production index by constituent entities of the Russian Federation (as a percentage of the previous year), 2010-2015.

Table 3. Population of Russia, Moscow and the region, 2009 - 2015

Table 4. Volume and capacity of the Russian confectionery market, 2013 - 2015

Table 5. Import volumes of confectionery products in two price segments, 2015, tons

Table 9. The largest players-manufacturers of the “premium” segment of products