Non-alcoholic drinks on the Russian market

Studies on the sales market share in the Russian Federation show that 96.6 percent of this market is held by chain stores (retail chains), 2.9 percent by online sales sites, and finally half a percent is the share of the free wholesale market, which practically depends on the competition and trade of the beverage industry in the supply of products in chain stores. It is worth noting that the trade in beverage products (alcoholic and non-alcoholic) in Russia has grown by seven hundred percent in the past decade.

Top Chain Stores (Retail Chains) in the Russian Federation

The largest and best-selling chain stores in Russia in 2021 are as follows:

The leader in Russian chain stores is the “X5 RETALI” group, which with its 4 main brands “Perkhrostek”, “Pyatirovochka”, “Karosel” and “Chizhik” occupies the first place in this group with the hypermarket, supermarket and convenience store formats.
The second place belongs to the joint-stock company “Tander”, which is known under the brand “Magnet” in 2 hypermarket and supermarket formats.
The third place belongs to the “Dixie” group with 2655 hypermarket and supermarket stores.
The “Red and White” collection, which specializes in alcoholic and non-alcoholic beverages, occupies the first place in beverage retail and the fourth place in food retail with a total of more than 12000 stores.
The “Lenta” and “Oki” collections are among the mid-range collections with a total of 571 hypermarket format stores.
Briefly about “X5 RETAIL” / the largest chain of stores in Russia

“Alpha Group” began its first activity in the field of grocery chains in Russia in 1995 in Moscow with the brand “Perkhrostok”, and then in 1999 opened the first store of its new brand in St. Petersburg under the name “Pyatirovochka”.

In May 2006, after the merger of these two brands “Perkhrostok” and “Pyatirovochka”, the “X5 RETAIL” group was established, and in 2008, “X5 RETAIL” acquired the chain of hypermarkets of the brand “Karosol”.

In 2018, the “X5 RETAIL” group put part of its shares on the Moscow Stock Exchange for public sale, and currently the “X5 RETAIL” group has 20,227 branches with a total of 325,000 permanent employees and a daily influx of over 15.6 million customers in its stores, making it the largest food chain in Russia.

The revenue of the “X5 RETAIL” group in 2021 was equivalent to 2,205 billion rubles, which is about $ 36.5 billion, and the company’s shares are one of the strong shares of the Russian stock market.

A brief about the “Krasnoe i Beloe” chain store

The “Krasnoe i Beloe” or “Red and White” chain is the largest beverage chain with 12,000 branches and more than 100,000 permanent employees with an annual revenue of over $ 4.62 billion operating in 57 regions of Russia.

“Fardad” Group of Companies has had a direct supply contract with “X5 RETAIL” Group since 2020 and has had business relations with “Red and White” Group since 2021, which gives it access to the stores of these two large groups.

Iran’s share in exports of non-alcoholic beverages to Russia

The value of the Russian import market in the non-alcoholic beverages and fruit juice industry in 2020 exceeded $1.1 billion. Currently, Iran’s share of the Russian soft drink and fruit juice industry is less than $1 million (0.08%).

The imposition of economic sanctions by the European Union against Russia and the interruption of its trade relations with Europe and the West have transformed the country’s economic and trade conditions. Given these conditions and Iran’s economic and production potential, a golden opportunity has been provided to replace Iranian goods with European goods and increase the share of Iranian brands in the Russian market.

Top countries importing soft drinks to Russia

According to published statistics, Italy, France and the United Kingdom, Germany and Georgia are the largest suppliers of soft drinks to Russia. However, an important issue that draws attention here is the weakening of the presence of these brands after the challenges related to Ukraine, which in itself confirms a very good opportunity for the presence of these brands in Russia.

Ranking of soft drink brands in Russia, based on (CRP) in 2020

• Briefly about the major companies in the soft drink industry in Russia
  “Coca-Cola”

  With over one hundred and twenty years of experience, the Coca-Cola Company is the largest producer of soft drinks in the world. “Coca-Cola” ranks first in the world in sales of fruit juices, carbonated drinks, sports drinks and mineral water.

  “Santal Fruit Drink”

  Santal is a famous Italian brand that produces non-carbonated drinks and fruit juices. Santal’s products include 100% pure fruit juices, fruit, dairy and vegetable drinks and are among the most famous beverage brands in Russia.

  “Dobry”

  “Dobry” is one of the famous brands and one of the largest producers of fruit juices, syrups, fruit drinks and iced tea in Russia. The company was founded in 1998 in Russia and has been part of the Coca-Cola Company since 2005.

  “Lubimiy”

  The Lubimiy brand has established itself in the Russian market as a low- and mid-priced product. The brand was founded in 1999 as a subsidiary of the Wimm-Bill-Dann company and was initially known for its naturalness and economy under the brand name “Lubimiy Sad”. In 2012, after the merger of “Wimm-Bill-Dann” with “PepSico”, the word “Sad”, which means garden, was removed from the brand name.

  “Simpsons Beverages”

  “Simpsons Beverages” has been producing beverages in the UK since 1934 and is one of the most popular brands in Russia.

  “Kingsley Beverages”

  “Kingsley Beverages” is an international company with regional offices in Dubai, Johannesburg, Peterborough and Houston, which produces, markets and distributes a wide range of beverage brands and products throughout Africa, North America, the Middle East and Europe.

  “Fruit Juice” JV LLC

  “Fruit Juice” is a mineral water and beverage production company established in 2013 in Uzbekistan, in the Bektmir region. The company has been very successful in the field of beverage production, especially lemonade, fruit juice, mineral water and energy drinks.

  It should be noted that currently, except for “Fruit Juice” JV LLC, none of the mentioned manufacturers export products to Russia and produce in that country due to European and American sanctions, which has provided a good platform for their Iranian counterparts in Russia.

  Key and important factors for presence in the Russian market

  According to the initial research conducted on the non-alcoholic beverage industry of the large Russian market and considering the key factors:

  High and consistent quality of manufactured products

  Preferential tariffs for import duties of Iranian goods to Russia

  Low export costs of Iranian products to Russia compared to Western goods

  The proximity and proximity of Iran and Russia as a logistical advantage makes it possible to export Iranian goods to Russia by various methods such as air, land, rail and sea transportation in the shortest possible time.

  The absence of a large part of the market from famous Western brands

  The possibility of rapid expansion of market share and access to the competitive and trade space in Russia due to the direct contract of the “Fardad” Group of Companies with the “X5 RETAIL” complex.

  It can be said that there is a high economic justification for entering the large Russian-Eurasian market, and the “Fardad” Group of Companies is proud to establish effective and successful joint cooperation in this direction.