Russian Sour Cream Market is Showing Unstable Dynamics

The Russian sour cream market is showing unstable dynamics. In 2006-2010, both the periods of market rise and fall   were registered. This way, in 2006-2007 supply of sour cream was growing, but in 2008 it decreased by 40 thousand tons. Declining market of 2008 was conditioned by the price spike for the raw milk products, which was caused by production cost increase of the kilogram of sour cream by 26.7% and made the manufacturers cut the production output. Besides, in the next two years the sour cream market began to recover. In 2009-2010, increase in the supply volume amounted to 7.3-8.4 %.

Demand for sour cream also showed bidirectional dynamic. In 2006-2007, demand increased by 7%, but in 2008 it went down by 2.9% to 469.6 thousand tons. Demand decrease of 2008 was conditioned by the retail price spike (by 26.2%), caused by cost development of sour cream. Besides, in the next two years demand for sour cream in Russia was going up by 3.6-4.3 % per annum and reached 507.5 thousand tons.

In 2011-2015, there will be two main factors influencing demand for and supply of sour cream in the Russian market, i.e. reaching the saturation point of the sour cream market and competition from the mayonnaise and mayonnaise sauce markets.