“Victory” – to the masses – Newspaper Kommersant No. 189 (7390) of 10/12/2022

Against the backdrop of a reduction in the activity of global chocolate suppliers in Russia, Russian confectionery enterprises are diversifying their business. So, the Moscow factory “Pobeda” began to produce chocolate masses for restaurateurs and confectioners, some of which were previously supplied from Europe. There is a niche for the product, but there may be difficulties with the purchase of raw materials and maintaining stable quality, market participants believe.

The Moscow confectionery factory Pobeda has begun producing chocolate masses for making desserts in restaurants, small businesses and at home, a company representative told Kommersant. The assortment includes 23 flavors, 350 million rubles have been invested in the new production line. The composition of the mass includes grated cocoa, cocoa butter, cocoa powder, vanilla, milk, sugar, sweeteners. Pobeda CEO Olga Muravyova clarifies that the growth of online trading and the increase in the number of coffee shops in chain retail contributed to entering the new segment. In addition, similar chocolate masses were supplied to Russia from Europe, and now logistical difficulties affect delivery times, the company notes.

After the outbreak of hostilities in Ukraine, the large Swiss chocolate manufacturer Lindt & Sprungli announced its withdrawal from the Russian market. And the Swiss-based Barry Callebaut, which runs three factories in Russia, reported in March that local factories were operating as normal, but “problems at the border” were affecting the supply of imported products and ingredients. In addition, the operating activity is affected by the geopolitical situation, uncertainties with exchange rates, the growth in the cost of logistics and raw materials, the company noted. Russian spokesman Barry Callebaut declined to comment.

Pobeda notes that the cost of packaging materials has increased by an average of 20%, sugar – by 27%, cocoa products – by 5-7%, and logistics costs have also increased. The company added that the use of natural sweeteners for many types of chocolate in the portfolio allows cost containment. They also believe that due to local production they will be able to organize uninterrupted supplies of chocolate masses.

Elena Ovsyannikova, founder of the E-O Chocolate laboratory, notes that there are indeed difficulties with the purchase of exclusive chocolate masses from specially selected varieties of cocoa beans, but European suppliers generally continue to work with Russia. According to her, the question is whether Pobeda will be able to organize uninterrupted import of ingredients and stable quality at an adequate price to compete with experienced European companies. Vyacheslav Lashmankin, Executive Director of the Askond Association of Confectionery Industry Enterprises, notes that according to Rosstat in 2021, more than 1 thousand manufacturers of finished confectionery products in the chocolate segment worked in Russia, so there is definitely a demand for semi-finished products, first of all, from small and medium-sized companies.

Managing partner of Walnut Capital Artem Motorny says that against the backdrop of a decrease in activity in Russia of a number of global chocolate suppliers, there is a free niche in the segment of chocolate coatings. But the market development will be affected by the decrease in the solvency of the population, since chocolate cannot be a cheap product, he points out.

According to the NielsenIQ retail audit, sales of all confectionery products in January-August 2022 decreased by 0.1% in volume terms and grew by 20.6% in money terms year-on-year. Most notably – by 13.9% in volume – decreased sales of figured chocolate. And the demand for chocolate bars and bars, on the contrary, increased by 4.7% and 15.2%, respectively. According to Ms. Ovsyannikova, the demand for high-quality chocolate among a part of the demanding audience will continue, especially since the consumption of sweets usually grows during stressful periods.

Anatoly Kostyrev