Scale of the market, its size, total
annual sales volume (industry on the whole)
The meat market's capacity is estimated to be 8 million tons,
pork’s share is 2.6 million tons (without breaking down the meat into chilled
and frozen types). In value terms, the capacity is US$ 15-17 billions. In
Russia, average consumption of meat per capita equals 55 kg, 17.8 kg (32%) of
which are pork. In terms of meat consumption, Russia lags behind European
countries, where a person eats about 80 kg a year. However, due to the general
improve of the country’s economy and, consequently, well-being of its citizens,
meat consumption in Russia is growing. The growth potential is partially proved
by the dynamics of the market volume: the long downfall that lasted throughout
1990s came to an end in 2000-2001, when the market began to grow. In 2002-2005
it gained 20% on the whole, and pork's share has grown 33%.
Market development trends, expected
Pork market in Russia tends to grow. Since 1999 its volume
has increased over 30%. According to the Rossvinprom’s forecast, by 2010
pork production will rise to 3.3 million t, whereas the total meat market is
seen to grow to 10 million t.
Forecasts by the Agrarian Market Research Institute (IKAR)
state that during several years ahead the annual growth rate of the domestic
pork production will equal about 10%.
As for the meat consumption structure, it is expected to
change, affected by the world tendencies and the fact that conditions in Russia
are favorable for production of the “fast” types of meat (poultry meat and
In spite of the fact that the pork's share will grow smaller,
the market on the whole will gain over 30% in absolute figures.
Seasonal fluctuations of the market
Seasonal factor does not influence the market.
National policy in the sphere of meat market regulation
Government of Russia tries to create conditions in which
Russian producers can develop. In particular, since 2003 imports of meat in the
country are limited. In 2006 the pork import is limited to 476 thousand t.
Major pork importers are Brazil, Denmark, USA. Share of chilled meat in the
imports is inconsiderable, 90% of the pork is frozen.
Fig. 4. Pork
Potential capacity of the market.
Size of the segment. Annual sales volume (in natural units and in terms of
Consumption of meat in the Moscow Region is higher than in
other regions (65 kg per capita). Citizens of the Russian capital get about 20%
of the actual volume of meat consumed in the country. However, people of the
Moscow Region strongly depend on imports of meat. The authorities take actions
to weaken this dependency, stimulate development of the local agricultural
companies, but the latter prefer not to produce but to deliver goods from other
regions. Thanks top them supplies of meat produced in Russia have grown 2.3
fold within the last 4 years. But even with the trend being this positive
Russian meat products cover only 61.2% of the market.
In the course of the last 3 years the pork market has grown
over a third. The growth is expected to continue for some more years. Moscow’s
pork market can be said undersaturated, with the demand for the product
In 2005 the segment witnessed increase of supply from the
agricultural companies and food processing enterprises that sell their produce
on a retail basis. Share of the smaller private producers of chilled pork has
decreased, consequently sales of this type of products on the farmers markets
have grown smaller.
The most active consumers of pork are people aged 30 to 50
years with monthly income over 20 thousand rubles. Target consumers of the
chilled pork are citizens of Moscow aged below 50, with monthly income varying from
5 to 10 thousand rubles, and middle-aged consumers earning over 20 thousand
rubles per person a month. Commonly, chilled pork is bought by women, but the
main consumers are men.
Table 4. Target consumers of chilled and frozen pork
of chilled pork, % of the total consumption
to 30 years
30 to 50 years
Marketing strategy of the project
__ will use flexible pricing, i.e. the price will depend on the
Sales stimulation programs
The main target groups are:
Corporate buyers of semi-finished (half-carcass) and finished
products (chilled pork):
category managers of retail chains;
product managers of retail chains;
distributors working with independent outlets;
distributors working with HoReCa outlets
directors of smaller retail chains;
directors and chief managers of independent stores;
directors and chief managers of independent HoReCa outlets.
Final buyers of packed and unpacked chilled meat – consumers.
Since the brand is of small importance for the buyers,
crucial for the successful sales are:
Level of interest towards the supplier and loyalty,
determined by a number of factors:
entry price level and possible extra charge (80%);
range of packed products (10%);
convenient logistics schemes (delivery of minor and medium
scale of “entry” bonuses (for retail chains).
Level of distribution (as the result of item 1):
interest expressed by owners of the distributing companies;
interest expressed by the sales teams of distributor.
Corporate clients service arrangements:
Group 1. Corporate buyers
catalogues covering the range of products;
negotiations with chains and reimbursement of the “entry”;
negotiations with chains and reimbursement of the retro
participation in the marketing events initiated by the chains
(price-related events, special offers, cross-promo);
reimbursement of the products’ merchandizing.
catalogues covering the range of products;
system of bonuses for plans accomplishments;
shared financing of the marketing events, according to the
motivation system, competitions and bonuses awarded to best
distributors, trade representatives that attracted the biggest number of
customers, made the biggest sales, accomplished all plans etc;
motivation programs developed for directors and chief managers
of independent stores and HoReCa outlets.
Group 2. Final buyers
Peculiarity of the chilled and frozen pork market – low
awareness buyers have of the producers and brands. This explains relatively low
effectiveness of direct influence on buyers.
Among actions taken in the context of working with final
merchandising support in retail outlets;
price promotion in retail chains.
Chilled meat produced by the complex under the present
project will be priced at 115 rubles per 1 kg (including VAT 10%), which is the
same to the wholesale price stated by the Russian companies producing the same
Distribution enjoys support from the marketing policy of the
company, including advertising and sales promotion actions.