Swiss food giant Nestle has insisted that it remains committed to driving growth in Russia, despite the challenges that have hit consumption in the market over the past year.
The Russian economy slumped the most on record during 2009, with GDP falling 7.9% as the global economic crisis, the falling price of oil and rising unemployment levels took their toll.
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Nevertheless, even as cautious Russian consumers looked to reduce their spending, the world’s largest food maker was able to grow sales in the country by 12% year on year, to RUB62.8bn (US$2.15bn).
“Russia is an important market for the Nestle Group and one of the drivers for the company’s future growth,” a spokesperson for Nestle told just-food this morning (19 March).
“Despite the current difficult economic environment, the Nestle Group remains committed to the Russian market and continues to invest in its development.”
Nestle said that its investments in expanding production helped drive growth in the country over the last 12 months.
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By GlobalDataDuring the year, the company opened a warehouse at Nestlé Rossiya in Zhukovsky, a wet petfood facility in Kaluga Region and a new production line for breakfast cereals was launched at the Cereal Partners Rus factory in Perm.
This year, Nestle began production of the Bystroffo brand of instant cereals in Vologda. The company is working on construction of a Nescafe Gold factory, which will be completed by mid-2011.
Nestle has also moved to consolidate its chocolate activities in Russia, streamlining manufacturing facilities. The company said that the move would allow it to leverage synergies within the group, develop the Comilfo and Rusanna brands and boost its position in the Russian chocolate market.
“The cumulative investment of Nestlé into the Russian economy has reached almost US$950m,” Stefan De Loecker, CEO of Nestlé Rossiya revealed.
“The company’s investment projects and optimization of production facilities planned for 2010 will allow to use existing resources held by the Nestle Group of companies in Russia with maximum efficiency, as well as to develop successful brands and strengthen Nestle positions on the Russian market.”
De Loecker also insisted that its ability to identify and respond to the needs of Russian consumers was key to the group’s ability to grow sales during the year.
“In a time of crisis we were focused on adapting our products to the changing needs of consumers in almost all categories,” he said.
“Our 2009 performance demonstrates Nestle Russia’s ability to deliver in the short term whilst continuing to invest for the long term.”
