Bright outlook for Russian freshwater fish market

August 13, 2007 12:50

By the present moment residents of Moscow and Saint Petersburg have already exceeded the level of freshwater fish consumption of RUR900.00 per capita per month and the figure has been reported as growing further. Taking into account current trends, by the year 2012 consumption of freshwater fish in the above two cities of Russia should grow to RUR3000-3500 per capita with the level for other Russian towns and cities to grow to RUR1600-1800 per month. Consequently, the annual market of freshwater fish products in 2012 can amount to RUR140-200 billion.

The above forecast has been made in the report prepared by Professor Alexander Ishevsky and Irina Grishina (production manager of JSC ZAO Baltiisky Bereg) for the Second International Specialized Conference "Strategic Challenges on Russia's Seafood Market".

The report's authors have scrutinized potential situations on the retail market governing both sales and product range as well possibilities to invest into development of technologies of storage and sales of freshwater fish. The report has drawn on statistics data of Kachalov and Colleagues Agency.


The average per capita income (total personal earnings) plays a leading role at the first stage of market formation and behavior of new products' consumers, the report says.

More specifically, consumers earning less than RUR2000 per capita through the month can buy only essential commodities, and there is no chance to develop sales of new products turning unaffordable for such consumers. From the point of view of market relations, that means complete absence of the market.

When the average per capita income exceeds RUR3500 per month the market displays fast growth. Sales of new products are reported to grow by 40-60%.

The next stage takes place when the average income in the province or town/city exceeds RUR5000-6000 per month. The market will develop stably with producers and traders getting a lot of possibilities, for instance, to speed up expansion of the range of low- and medium-priced fish products.

When the average per capita income exceeds RUR10,000-11,000, consumers start purchasing a large number of new products.

Elite items

With the earnings reaching RUR20,000 and more per month the market mechanisms start to work as to form a new product range. The report speaks about a quick sales growth for premium-class items by 40-50% and even by 60-70% per year. In particular, there appear special niches for freshwater fish priced from RUR500-600 per kilo. The volume of sales of elite products from freshwater fish in Moscow, Saint Petersburg and particular cities of Northwest Siberia have already exceeded the corresponding volumes in Scandinavia.

When the average earnings exceed RUR40,000 per month, the report points to a principally new model of food consumption. On the one hand, there is a dramatic increase of their consumption, and, on the other hand, the structure of consumption changes.

Income forecast

At present, Russia, especially Russian regions, is about to pass through the third and fourth stages of market development. Consultants from Kachalov and Colleagues forecast that in 2012 the average per capita income of Russian people will grow to RUR17,000-20,000 per month. At the same time, earnings in regional centers are forecasted to fluctuate between RUR2000-25,000 per month and growth rates in regions will exceed the respective rates in Moscow. Starting from 2009 the difference between earnings in Moscow and in regions will be decreasing, the report says.

Evidently, the region with the largest average per capita income will see the largest level of new products' consumption.


Nowadays consumption of freshwater fish products amounts to only RUR150-180 on the average for consumers earning RUR7000-7500 per month. Moscow and Saint Petersburg have already exceeded the consumption level of RUR900 per capita per month and the figure has been tending to grow further. Taking into account current trends of food consumption, by the year 2012 consumption of freshwater fish in the above two cities of Russia should grow to RUR3000-3500 per capita with the level for other Russian settlements to grow to RUR1600-1800 per month. Consequently, the annual market of freshwater fish products in 2012 can amount to RUR140-200 billion. At the same time, development of freshwater fish markets in various regions of Russia depends on the difference of consumption volumes of traditional commodities. Besides, the regions themselves develop with different rates and capacities.

With the average level of freshwater fish consumption of RUR150-180 per month, there are regions with a much higher level of consumption. For instance, they are Tyumen and Samara regions, Hanty-Mansi District as well as a number of regions where freshwater fish is a traditional food and the level of consumers' food expenses are higher than Russia's average figure (e.g. Republics of Komi and Saha, Yamalo-Nenetsky and Chukotka Autonomous Districts, Sakhalin, Kamchatka and Magadan).

Besides, there are regions holding large shares on the Russian freshwater fish market (1.5-2 times larger than other regions' shares). First of all, they are Saint-Petersburg, Moscow, Nizhnyi Novgorod, Rostov, Krasnoyarsk and Krasnodar. Those regions have been leading in pond fish culture and contributed ca.1% each to the nation's total sales of freshwater fish. Slower development of the Russian market of pond farmed fish has greatly increased their expenses and dramatically decreased efficiency of their farming operations with the market remaining non-saturated.

According to the forecasts of Kachalov and Colleagues, the market saturation will happen when Russian consumers spend ca.RUR800-1000 per month for freshwater fish, and the target can come true already in 2012-2014. Provisional forecasts say that in 6-7 years Russia can outdo most of the European countries in terms of fish consumption.

In order to minimize potential losses when launching new products on the regions' markets, traders should control the following aspects vital for the entrance stage (according to Kachalov and Colleagues):

  • Sales should be carried out via dealers and distributors and not via opening independent subsidiaries;
  • Distribution should be carried out via medium and large retail outlets (large super and hypermarkets lay down unaffordable conditions for products' entrance, while small outlets have small sales volumes and they do not guarantee required storage conditions);
  • For first sales product prices should be low;
  • Limited range is instrumental for sales' efficiency evaluation;
  • Frequency and volume of advertising campaign should be defined by the product.

Expansion and renewal of the product range are connected with the region's growth. Most consumers would wish to try such products which had been unaffordable for them when they had low income. At that moment, producers should offer new products. It is evident that saturation of the regional market and large sales volumes precondition strong competition on the market. The better the product, service and the shipment procedure, the stronger the position of the supplier in the relationship with dealers. Large retail chains appear to open their shops only in saturated regions. Keeping the products' positions on the saturated market can be achieved by means of decreasing expenses. In other words, that is a switch to a new type of product positioning for the consumer. First of all, this new type means special program of just-in-time shipments. At the stage of keeping positions on the saturated market, a slight violation of shipments' terms and range will be pregnant either with large fines and losses for the supplier, or with contract denunciation.

The last stage is development of new technologies to boost sales via product range expansion, the report says. Storage and sales of high quality raw freshwater fish is a fairly complicated technological process therefore business partners should be trained in its storage and sales technologies.

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