Today the world knows numerous varieties of cheese and cheese products. Besides, manufacturers are working to extend their product ranges with new flavors added to cheeses.
Peculiarity of cheese consumption in Russia is positioning of this category more as an accompanying product than an independent meal like in many other countries. Though cheese has been in the diet of Russians for many years already, the country still has no unified classification of cheeses. One of reasons is that in different countries recipes and production technologies of cheeses under the same name can be different.

Russia has plants producing different kinds of cheese. However domestic production is mainly driven by processed cheeses – about 40% of domestic production volume.
According to "Step by Step", in 2012 Russia produced 457 thousand tons of cheese and cheese products – plus 7% over previous year.

Domestic production is mainly concentrated in Central Federal District – more than 30% of domestic production volume is provided by this region. Other important cheese supplying regions in Russia are Privolzhsky FD and Siberian FD with about 20 and 19%.

Development of Russian cheese market is determined by a number of factors.
One of the most important factors is the average per capita consumption rate. Recommended norm is 6.5 kg per person annually, but in Russia consumption rate does not exceed 4 kg, according to industry experts. Most significant difference of consumption rate is between Russia and European countries; for instance, in France per capita consumption of cheese is 15 kg annually.

It should be mentioned that Russian cheese market shows the trend of growing demand for cheese and cheese products. Russians do revise their perception of this category. According to industry experts, during the next 6-7 years per capita consumption can grow by one third on the average.

Another important factor is the preference given by Russian manufacturers to cheaper cheese varieties. As it has been already mentioned, domestic production is mainly driven by processed cheeses. This category features low production cost due to application of cheap raw materials like vegetable fats. Besides, production of processed cheese is not affected by seasonality, so manufacturers can satisfy demand any time offering relatively low prices.

Low PR activity of Russian manufacturers should also be mentioned among factors determining market performance. Currently advertising budgets of cheese brands in Russia are very modest. One of the reasons is that large companies able to spend a lot on promotion of their products control just one third of domestic production in volume; meanwhile the rest of domestic production volume is provided by small cheese plants and dairy facilities with low availability of funds for promo campaigns.

During last 3 years cheese consumption saw 4% increase in volume.

Cheese consumption in Russia is mainly driven by processed cheeses – 38% of consumption volume. Hard and semi hard cheeses have respectively 30% and 18% of consumption volume. Smoked and soft cheeses provide 8% of consumption volume, brined cheeses – 6%.
It should be mentioned that today cheese is not regarded as a staple, so demand for this category is variable.

Both Russian and foreign manufacturers operate on Russian cheese market today. Imported cheese is quite competitive both in price and quality; however import volume gradually declines, by 1-2% annually.

In 2012 import volume saw more impressive decline – by 5-6%; this was related to the ban on supplies of some Ukrainian importers of cheese. In 2011 Ukraine controlled the largest share of cheese import to Russia – 24%. So, ban on import of Ukrainian products seriously affected cheese import.

Russia's entry to WTO also caused significant changes on Russian cheese market as customs tariffs on many cheese kinds were reduced.
Market experts forecast structural changes of consumption and import in short term perspective.

Currently cheese export from Russia is by several times smaller than import. Major segment of cheese export is processed cheese with about 90% of export volume.

In 2012 Russia counted 289 companies with dairy production registered as major activity which includes production of cheese. The largest Russian manufacturers of cheese are "MK (Dairy Complex) "Voronezhsky" OJSC (Voronezh), "Molochny Produkt (Dairy Product)" LLC (Ryazan), "MZPS (Moscow Plant of Processed Cheeses) "Karat" OJSC, "RZPS (Ryazan Plant of Processed Cheeses)" OJSC, "Syr Starodubsky (Cheese of Starodub)" TnV (Limited Partnership) (Starodub, Bryansk Region), "Syrodel (Cheese Maker)" CJSC (Krasnodar Territory), "Yantar (Amber)" CJSC (Voronezh).*

In general, Russian cheese market is a vibrant and promising industry. Concentration of the market increases on shares of small companies unable to invest into business development.

Forecast on future performance of Russian cheese market shows good investment potential in short term perspective. However, manufacturers should increase PR activity and accent promotion of their products because gustatory preferences of Russian consumers for cheeses are not settled yet. Russians have not yet developed gourmet preferences for cheeses, so correct product promotion can improve market positions of market players.

* Manufacturers are named in alphabetical order.

Research of the Company "Step by Step"