Companies belonging to Obiedinenye Konditery led the Russia sugar confectionery market with a cumulative value share of 11%. Famous local manufacturers such as Rot Front, Krasny Oktyabr and Babaevsky Concern own brands that have been widely known since Soviet times and also actively present new modern products. The companies benefit from well-established distribution over the whole country, wide brand portfolios in all categories of sugar confectionery and active marketing support. Obiedinenye Konditery is an innovative holding which regularly introduces products with healthy positioning and with marketing claims appealing to consumers oriented towards the health and wellness trend.
Sugar confectionery saw stable but slow development in 2012; it is set to show volume growth of 1% and current value growth of 8%. Dynamics in 2012 continue the trend of historic development when volume sales also increased by an insufficient 1%. This is mainly caused by a stable decrease in volume sales of the largest market of traditional boiled sweets. Consumer interest in healthier sweets, dark chocolate and low- calorie snacks together with growing disposable income over the country negatively influenced sales dynamics.
Subcategories of sugar confectionery are expected to develop differently. Boiled sweets will continue to suffer both from changing consumer preference towards healthier options and from active price competition between domestics and international market players. Ukrainian and Chinese manufacturers are able to offer cheaper boiled sweets, even though hard import taxes were aimed to help Russian manufacturers. Since Russia has joined the World Trade Organization, such discriminating tools cannot be implied anymore. Domestic players will face even more active price wars and will be forced to push prices down or to offer new interesting products to attract consumers. The wider choice of sugar confectionery is expected to be seen on retail shelves over the forecast period.
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