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USMEF Strategic Market Profile
Russia
Market Trends and Growth Potential
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Per Capita Beef Consumption (2006)
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16.6 kg
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+1.8% (vs. 2001)
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Total Beef Imports (2006)
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671,013 mt
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+47% (vs. 2001)
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Total Beef Variety Meat (BVM) Imports (2006)
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80,472 mt
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-1.3% (vs. 2001)
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Average per capita beef consumption is still well below the level enjoyed during Soviet times.
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Increased wealth in the major cities is generating increased demand for high quality beef.
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Domestic beef production is declining and not supported by the Russian government.
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Beef imports have increased despite the quota system. Excess over-quota imports can create huge stocks and destabilize the market.
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Competition/Competitiveness
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2006
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2001
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U.S. Share of Total Beef/BVM Import Market
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0%
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12%
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Other Beef/BVM Suppliers & Market Shares
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Brazil 36%
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<1%
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Argentina 23%
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<1%
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Paraguay 12%
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<1%
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Domestic Self Sufficiency
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60%
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73%
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Domestic product is perceived as superior in terms of quality. Domestic production is oriented to the dairy herd and there are no signs of efforts to increase beef quality.
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Traditional Russian consumers prefer grass-fed beef because of Soviet reliance on imported grass-fed beef from Ireland.
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Importers are very price sensitive.
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High competition from South America and Australia.
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Beef from the Ukraine has been restricted.
Market Penetration
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Customers for U.S. Beef Imports (open market) Processing
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30%
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HRI
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15%
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Retail
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55%
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Top Imported U.S. Beef Cuts (open market): rib-eye, striploin, tenderloin
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Top Imported U.S. Beef Variety Meat (BVM) Items (open market): liver, heart, kidney
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U.S. Beef/BVM Exports to Russia as a % of Total U.S. Beef/BVM Exports (2006): 0% (4.6% in 2001)
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-
Previously a major market, the Russian market is still not open to U.S. beef.
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Chilled and frozen prime cuts for the HRI sector present a new, fast growing market.
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Future opportunities for U.S. beef in the HRI sector will pave the way for sales at retail (METRO, Auchan and O’key).
Product/Industry Image
Operating/Marketing Environment and Trade/Distribution Issues
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The quota system lacks transparency and predictability.
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There is improved infrastructure for distribution of perishable goods.
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U.S. exporters will typically ship products to two major points of entry, St. Petersburg and Vladivostok, and cover the whole Russian territory.
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There is small difference in customs duties within and above quota import.
Access Conditions
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U.S. beef is banned in the Russian market, though technical negotiations on vet issues continue.
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Retail certificates for the full range of beef cuts have been approved, once the market opens.
Import and market share data is based on import data of Russia (from GTA), and U.S. export data is from the U.S. Department of Commerce, Trade Census Bureau.
Long-Term Strategy:
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Assist USDA in regaining access for U.S. beef in Russia.
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Recapture the number of importers and processors purchasing U.S. beef and beef variety meat by demonstrating their profitability.
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Use educational activities to position U.S. beef as the highest quality, preferred product among targeted HRI customers, resuming U.S. beef purchases and expanding the range of U.S. beef cuts in the HRI sector.
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Build demand for U.S. beef and variety meats in the retail sector through promotional activities.
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Develop the image of U.S. beef as a quality product among Russian end-users.
USMEF Export Forecasts:
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2006
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2007
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2008
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2009
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2010
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2011
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2012
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2013
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2014
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Beef
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35
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50
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1,500
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1,700
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2,000
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2,300
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2,700
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3,000
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3,400
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BVM
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437
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2,500
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40,000
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53,000
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60,000
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65,000
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66,000
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69,000
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72,000
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Total
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472
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2,550
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41,500
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54,700
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62,000
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67,300
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68,700
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72,000
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75,400
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% Change
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-94%
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440%
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1527%
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32%
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13%
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9%
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2%
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5%
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5%
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2006 export data are from U.S. Dept. of Commerce/Trade Census Bureau; 2007-14 represents USMEF forecasts, October 2007
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Copyright 1996-2008 U.S. Meat Export Federation
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