14 Feb 2023 15:29

Export potential for sweet fizzy Russian soft drinks estimated at $400-450 mln per year - Agroexport

MOSCOW. Feb 14 (Interfax) - The export potential for sweet carbonated soft drinks from Russia is valued at $400-450 million per year, experts at the Agriculture Ministry's Agroexport said.

"Assuming current positive trends continue, in the future, Russian exports of sweet carbonated soft drinks could exceed $400-450 million per year," the center's industry review said.

Preliminary data for 2022 shows export of these products reached $278 million as compared to $253.1 million in 2021. Compared to $63.1 million in 2017, export is up 4.4 fold.

The key export markets for Russian fizzy drinks are CIS countries, primarily Kazakhstan and Uzbekistan. Agroexport also sees China, Vietnam, Cambodia and Singapore as potential markets. "Also, we can single out Middle Eastern countries such as Saudi Arabia, the UAE and Turkey, which are becoming some of our important strategic markets for Russian exports in general, and can be characterized as having a high export potential for sweet carbonated soft drinks," the review said.

Imports of these products are also growing. Specifically, in 2021, 177.2 million liters of sweet carbonated drinks worth $145.2 million were imported into Russia, which is 17.2% and 45.5% higher than in 2020, respectively. Average annual growth for 2017-2021 was 15% in volume and 22.4% in value.

According to the review, in 2022 Russia produced 19.8 billion liters of soft drinks, which is 7.3% less than in the previous year. "A significant decline in production in 2022 is due to the departure of foreign companies that occupied a large part of the Russian soft drinks market," the document says. The further dynamics of these indicators will depend, among other things, on manufacturers' adaptation speed to new realities, the experts said.

The lion's share of production consisted of the "other non-alcoholic beverages" category, which also includes sweet carbonated soft drinks. Production volume for this group reached 8.7 billion liters in 2022, which is 3.2% lower than in 2021. In 2022, according to preliminary data, consumption of these drinks decreased 3.2% to 4.758 billion liters. Per capita consumption was 32.7 liters compared to 33.6 liters in 2021.

The retail trade dominates in sales of sugary carbonated soft drinks. According to estimates, sales in retail channels account for 95.1% of the market.

The review mentions that, starting in July 2023, Russia will introduce an excise tax of 7 rubles per liter on drinks containing sugar. This will be one of the most important factors influencing the growth rate of the market for sweet carbonated soft drinks, the authors of the review said. "According to forecasts, prices for this type of product will increase, while production and consumption volumes will decrease. At the same time, an increase in the share of consumption of bottled water and juices is expected," Agroexport says.