Russian market ready for take-off, says Orafti
prebiotic ingredients in Russia, after six years of ground work and
building up recognition in the local marketplace.
The Belgian company, maker of Beneo inulin and oligofructose from chicory root, first entered Russia six years ago as part of a plan to covered all the former CIS countries. Between them Russia, Ukraine, Belarus and Kazakhstan have a population of around 240m - a big pool of potential consumers almost equal to that of the United States.
Russia alone presently accounts for one per cent of the active ingedients division's annual turnover, but Dominic Speleers, executive vice president of sales and marketing, said that he expects growth of between 50 and 100 per cent in the market over the next year. Annual turnover for Orafti as a whole is €230m, but the company does not break this figure down into divisions.
"We think the potential is ahead of us," Speleers told NutraIngredients.com. The company has recently received recognition from the industry in the form of two awards at Ingredients Russia in December, for its Beneo Synergy 1 ingredient and overall contribution to the 'Food Ingredients of the XXI century' forum.
The slow build up and on-the-ground local knowledge of a Russian employee of three-years' standing have been instrumental in positioning to take advantage the opportunities from economic development and a shift towards healthier eating habits, especially amongst an emerging class of people with greater spending power.
Speleers described Orafti's early entry as "a good decision, to be ready when the market is ready".
Part of the preparation has been gaining approvals through the State Nutrition Industry, "the gatekeeper of the Russian food industry" which approves all food ingredients and health claims and can help with access to manufacturers.
"From the start we recognised that we have to adapt to local language and culture," he said.
For instance, while Russians like to know about products that are popular in other countries, they want to try for themselves. For an ingredients company, one of the first steps is to find the first customers that are prepared to develop the first local examples.
Orafti has been fortunate. Its largest local customer is dairy company Wimm-Bill-Dann, which uses Beneo in a product called Biomax Efficient.
From the outset Russia's large dairy industry has offered considerable opportunities for products aimed at digestive health - in particular kefirs, which are the dominant format.
Comprehension of the probiotic benefits of Beneo amongst Russian consumers has been helped by widespread understanding and acceptance of the benefits of probiotic bacteria in human health - the growth of which is stimulated by prebiotics.
Orafti has designs on taking Beneo into more bakery, cereals, chocolate, confectionary and meats - the market sectors it is eyeing everywhere - although healthy confectionary is perhaps more likely to be accepted in Russia than elsewhere, said Speleers.
However its early focus on dairy has helped Orafti's ingredients be used in products sold nationwide - since dairy and kefir form part of the staple diet.
What is more, from the outset it has worked with distributor Bang and Bonsomer, which has offices throughout the country.
Orafti has a strong focus on clinical trials and nutritional science, and Speleers stressed the importance of communicating this.
"You can have the best science in the world, but you have to translate it into something attractive for the consumer," he said.
At present, marketing is concentrated on food industry and consumers, rather than through health professionals.
"As far as we know today, medical practitioners do not have a big impact on the use of healthy ingredients," said Speleers.
But he added that the company will be watching this area carefully and the research it is conducting means that it has means to communicate to practitioners if and when appropriate.
