TOP 100 milk processors: oligarchic capitalism of the Russian dairy industry in 2022
Director of the Dairy Market Research Center
The year 2022 was characterized by tectonic changes in the Russian dairy market. Of course, they are all connected with the beginning of war between Russia and Ukraine, as a result of which basic factors emerged, on the one hand, interrupting the trends of the Russian consumer market over the past 5-7 years, and on the other, forming new conditions and trends in the development of the industry.
These factors include:
• a state of severe consumer shock and instability, which, especially in the first months of the conflict, reduced per capita consumption of all products;
• a powerful migration explosion both within the country and a significant outflow of solvent consumers outside Russia. Moreover, it should be noted that the covid restrictions of 2020-21 were a strong stimulus for the growth of consumption and development of production; 2022 hit these achievements hard;
• sanctions against Russia reached unimaginable levels and in the first months of the war paralyzed the activities of primarily dairy processing enterprises: the impossibility of making international payments, the withdrawal of large global suppliers of equipment and packaging solutions from the market;
• high prices for raw milk, which allowed producers to live comfortably, but hit processors and consumer demand hard;
This became the main characteristic of the structure of the dairy market. In the processing sector, the trend of milk production growth continued, and at the expense of the largest recipients of subsidies.
In the rework, on the contrary, a leapfrog began when many players could not cope with the turbulence, and others took their place. In 2022, the TOP 100 processed 15 million 380 thousand tons of raw milk, which is 938 thousand tons more than in 2021.
The growth in processing volumes of the TOP-100 was 6.50%, while the growth of the entire market was 2.11%.
The state became the largest processor of milk, nationalizing Danone (2023), processing 1 million 774 thousand tons.
As a result, both consumption and production of whole milk products, especially yoghurt, have significantly decreased. In the conditions of inertial growth in raw milk production, which continues due to the commissioning of new complexes, the construction of which was laid down years earlier, increased efficiency of milk production and high technological equipment of the largest producers - recipients of state support, processors were forced to redirect milk to the production of cheeses and milk powders. products, !oils! etc., thereby accumulating reserves.
Thus, the TOP 100 are growing 3 times faster than the entire market. The TOP100 share in the milk market reached 71.56%. In 2021, the TOP 100 recycled 67.88%.
Another important market trend in 2022 is a reduction in the production of whole milk products against the backdrop of falling consumption and increased production of raw materials, as well as the switching of raw milk flows to facilities for the production of cheese and milk powder, thus accumulating significant inventories. In addition, in recent years we have seen large investments in cheese production, so the peak of the launch of new and modernized factories occurred in 2021-2023.
It is worth noting that, starting from 2014, almost the entire increase in raw milk production was directed to cheese production. So, if 10-11 million tons of milk were spent annually on the production of whole milk products over the past 10 years, then 7.6 million tons were spent on cheese production in 2013, and 13.4 million tons in 2022. That is, the growth was 76% over 10 years. However, cheese consumption increased slightly over this period. Back in 2019, analysts from the Center for Dairy Market Research spoke about the overproduction of cheese and the need to develop the export of this product to the countries of Central Asia.
However, Covid restrictions leveled out overproduction and relaxed the market. But everything returned with a vengeance in 2022. However, the maximum effect from overproduction will occur in 2023-24. But already in 2022, significant problems have arisen in a number of regions. As we predicted, the downward trend in milk processing in the Altai Territory continues. In 2022, 28% less milk was processed compared to 2021. One of the reasons for this decline was technical problems at the Rubtsovsky plant. The Capital of Milk holding has significantly reduced processing.
But in general, the trend is clear: with an increase in cheese production in central Russia, milk processing (and then the number of cows) in Altai will decline. Naturally, this affected neighboring regions. Milk processing grew in the Novosibirsk, Tomsk, Omsk regions, and milk also crossed the border with the Republic of Kazakhstan.
In the European part, in the Volga region and the Urals - on the contrary - cheese companies and factories showed a powerful increase in processing volumes. Three Bryansk cheese-making companies are among the top ten fastest growing milk processing companies. These are the Bryansk cheese plant (+124.4 thousand tons), Russian cheese (+55.3 thousand tons), Bryansk cheese factories (54.3 thousand tons). Perm SKMP continued to grow (+119.8 thousand tons), becoming the largest national processor, surpassing Molvest and KOMOS GROUP. The German DMK Russland finally launched the Bobrovsky cheese plant in 2021 and began processing plus 75.6 thousand tons per year. The Agrocomplex named after Tkacheva (+61.4 thousand tons) and Neva Milk (+52.4 thousand tons).
Perm SKMP continued to grow (+119.8 thousand tons), becoming the largest national processor, surpassing Molvest and KOMOS GROUP. The German DMK Russland finally launched the Bobrovsky cheese plant in 2021 and began processing plus 75.6 thousand tons per year. The Agrocomplex named after Tkacheva (+61.4 thousand tons) and Neva Milk (+52.4 thousand tons).
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