The content of this report will be updated with the latest scenarios based on the global COVID-19 Pandemic
Political & economic turmoil in 2014, owing to the Russian-Ukrainian conflict has significantly impacted the Russian dairy market with the government implementing one year embargo on food imports including milk, cheese and other dairy products.
Around 78% of the Russian population consisting majorly of people with low income and socially disadvantaged groups, is dependent on dairy products. However, in later half of the year owing to ban of European foods, the region felt huge shortage of supplies in the dairy sector. Increased production by the domestic players could not forego the deficit which led to reduction of the market volume by 24% in Russia.
However, greater availability of supermarkets, changing lifestyle, new product development and rising penetration of refrigerators in rural and urban areas has positively impacted the demand for dairy products in the country. Additionally, increasing consumer awareness of the health benefits has spurred up the demand for the dairy products in the region. Whereas, recent innovation in retail marketing channels have also facilitated the rapid expansion of Russian dairy market.
As, dairy products are easily susceptible to contamination on prolonged exposure to atmosphere, they can get soil, making them unfit for human consumption. To satisfy the needs of the consumers who are becoming more health conscious, the dairy product manufacturers are slowly changing their existing product packaging portfolio. They are now offering range of products which are in line with consumer expectations. One of the major factors which is contributing to this trend is the development of highly efficient packaging solutions for dairy products. The initiatives which have been taken by the packaging companies in terms of innovations and offerings has greatly contributed to the dairy products market growth.
Owing to ban, stringent government regulations and high inflation level, the Russian dairy packaging market is expected to grow moderately at a compound annual growth rate of 2.5% over the forecast period. However, the gains are mainly driven by the small containers and food eaten/take away for personal consumption. Dairy Packaging products such as pouches and bottles are expected to gain significant traction over the next five years.
Moreover, the growing usage of dairy products such as cheese, butter and yogurt in food and restaurants chains will also drive the dairy product packaging industry. Different sizes and formats of packaging with longer shelf life are the other major factors that will contribute to dairy packaging market growth in Russia.
Focus on detrimental effects of packaging on environment has created the need for sustainable packaging solutions. Government policies and consumer awareness has impacted the demand for the usage of recycled materials for packaging solutions. To reduce energy cost without affecting the flexibility of machinery and design of the products, is one of the key impediments faced by the Russian dairy packaging manufacturers.
Growing demand for multi-layer and tetra packaging along with blow-molded HDPE bottles in the region will open new gateway of opportunities for the market players.
Some of the major players mentioned in the report are Amcor, Mondi Group, Rexam, Aptar Group. Silgan Holdings, Tetra Laval and CAN-PACK S.A.