RUSSIA:
Development of a small confectionery segment in the Russian market
Starting point
The company produces breakfast and confectionery products and has been active in Russia for several years with a distributor. However, due to the competitive situation in the breakfast segment, the business is stagnant and small. The company has to make a decision either to exit the market, to find a growth strategy for the existing range, or to focus on the confectionary assortment.
APPROACH
Analysis of the possibility of activating the current range and at the same time examining the manufacturer's other product ranges, especially confectionery. It was found that the confectionery in Russia is still known from Soviet times. Currently there are only gift items and premium priced imported products.
IMPLEMENTATION
Creation of an assortment for Russia, which is priced below the premium segment and development of a corresponding business plan with the Russian distributor. First investments in modern Russian trade, with a focus on retail partners with higher-quality ranges. Then expansion of distribution with other retailers and in Russian regions. The range has also been expanded to include other items. Due to the strong and rapid growth, further investments can be done from cash flow.
RESULT
Within 7 years, the export volume of the new range has grown from EUR 50,000 to more than EUR 2.5 million and distribution has expanded to include the entire modern retail and selected sub-distributors in the regions of Russia. A new sub-segment that is also interesting for the Russian retail was created, so that Russian discounters have also included selected articles.
