Bord Bia analysis reveals Russia as growing market for Irish cheese

Russia is an increasingly attractive market for Irish cheese exporters, according to the latest analysis from Bord Bia.

It seems that Russia is absorbing almost one third of total EU exports.

In a report issued to Irish cheese producers and its other trade members, Bord Bia assembled a series of recent food industry reports all citing growth in Russian food imports.

Cheese figures highly, with a clear consumer liking for European product. There are variations in preference levels from one cheese category to another, but the analysis clearly indicates an opportunity for increased exports for Irish producers.

Bord Bia’s analysis notes that Euromonitor International earlier this year reported that the market recorded growth of 15% over the last year. The cheese category is expected to grow by 6% annually up to 2016 to reach a value of 293bn roubles (€7.5bn).

Citing a study by International Dairy Magazine, Bord Bia food and beverage analyst Eimear O’Donnell said Russian dairy consumption continues to grow, albeit remaining underdeveloped by international standards at 4.2kg per capita.

“This compares to 19kg in Finland and 14kg in France,” said Ms O’Donnell. “This indicates significant growth potential. Fresh dairy produce represents 30% of the dairy market followed by yellow cheese at 27%, butter at 23% and processed cheese at 20%.”

At the Dairy NPD conference earlier this year in Amsterdam, Valio Russia echoed this growth opportunity. Russia has a population of approximately 142m consumers with the main concentration in St Petersburg and Moscow.

Also at the conference, Valio reported growth of 30% in yellow cheese imports into Russia during 2011. Russian consumer surveys show European cheese is perceived as being of high quality and is rated as a premium product.

Ms O’Donnell added that the market does have its constraints and challenges. She cited differing consumption patterns across the market, logistical difficulties accessing such a large territory.

In 2011, dairy exports to Russia from Ireland were valued at just over €2m, with cheddar accounting for a quarter of the total.

“In terms of cheese, Euromonitor International reports that packaged hard cheese saw the fastest growth in 2010/11, both in volume and current value terms,” said Ms O’Donnell. “Improved distribution for packaged hard cheese through the collaboration of manufacturers with leading chained retailers, in addition to the development of modern retail formats was a main reasons for growth.”