Russia grows with ice cream – Newspaper Kommersant No. 54 (7499) of 03/30/2023

The rotation of the largest producers continues on the Russian ice cream market. Having produced more than 52 thousand tons of this dessert in 2022, Iceberry Group of Companies Alexander Zhukov, the father of Roman Abramovich’s ex-wife Daria Zhukova, became the first in terms of volume, surpassing Renna Group and Unilever. In 2023, competition in the industry will continue to increase, and demand will shift to the low-cost segment.

Iceberry Group has become the largest ice cream producer in Russia, having increased production output by 19.6% in 2022, to 52.6 thousand tons. These are the results of the rating of Milknews, Streda Consulting, Soyuzmoloko and the Union of Ice Cream Makers. The former leader, Renna Group (Korovka iz Korenovka brand), took second place, reducing production by 7.4% to 46.7 thousand tons. Unilever (Magnat, Gold Standard, etc.) reduced the production of ice cream by 13.3% to 39,000 tons, moving down to the third position. The total production of ice cream in Russia decreased by 11.1%, to 468 thousand tons year-on-year.

In Iceberry, the results are associated with the launch of a new plant in the Yaroslavl region, as well as the modernization of sites in Vologda and Penza. According to the representative of the group, in recent years, the turnover of the business has been growing at a double-digit pace in kind and money. In the first quarter of 2023, Iceberry expects to increase production by 40% year-on-year.

Alexei Gruzdev, CEO of Streda Consulting, notes that Iceberry also produces Petroholod brands and ice cream under the chains’ own brands. Renna, on the other hand, sells ice cream only under its own brand, and the decline in production in 2022 could be due to accumulated stocks, the expert believes. Renna did not provide a comment.

Irina Antyushina, director of communications and corporate relations at Unilever in Russia and Belarus, says that the reduction in ice cream production is mainly due to the suspension of orders for export products. Unilever announced the termination of exports from the Russian Federation and investments in marketing in the spring of 2022 after the outbreak of hostilities in Ukraine. The company focused on the localization of the full range of ice cream and ensuring the continuity of production in the face of uncertainty and problems with logistics, says Ms. Antyushina.

According to Alexei Gruzdev, in 2021 Unilever supplied more than 10,000 tons of ice cream from Russia only to the United States and Canada, and another 3-4,000 tons to Kazakhstan and the CIS countries. In the domestic market, without investment in marketing, Unilever’s share also declined, but not as dramatically, the expert adds. Another international player Froneri (48 kopeck brands, Milka, Oreo, Maxiduo, etc.) increased production by 4.2% in 2022, to 27 thousand tons, rising from fifth to fourth place in the ranking. In Froneri, “Kommersant” did not answer.

According to the authors of the rating, in general, the 20 largest ice cream producers managed to keep their total production at the level of 345 thousand tons and increase their combined share from 68% to 74% of the market. It is becoming more and more difficult for small players to hold their positions, Mr. Gruzdev notes. In 2023, he does not rule out new reshuffles among the biggest manufacturers, assuming that Renna could regain the top spot.

Natalya Utkina, Deputy Director General of the Union of Ice Cream Makers, predicts that in 2023 the volume of ice cream production in Russia may grow by 5-10% year-on-year. She believes consumers have generally recovered from the 2022 turmoil, so dessert demand should recover. Soyuzmoloko CEO Artem Belov also called the decline in demand a serious challenge for the industry, noting that a systematic recovery of consumption awaits. Iceberry predicts that the trend towards rational spending will continue – the rejection of products that “unreasonably claim to be premium.”

Anatoly Kostyrev