Despite an adverse economic context, French group, Bonduelle, have had a continuously growing turnover in Russia and are investing to strengthen their local presence.
Sergueï Kovalev, Head of Bonduelle's agro-industrial complex boasts about Koban’s black clay, "Here, we have recorded a record production : we have harvested 32,500 tons of peas. Obviously a lot of it is due to the weather, but it is also thanks to our knowledge and mastering of techniques." It was at the start of the millennium that agronomical tests convinced the group to invest in the Krasnodar black clay. Bonduelle now farms 11,000 hectares in the region and reigns over the tinned vegetable market.
The company started working in Russia in 1995 by importing their own products from Hungary. The financial crisis that shook Russia in 1998 led Bonduelle to open their first store in Novotitarovskaïa, North Krasnodar, in 2004. A second store has opened in Timachevsk, where the group are celebrating 20 years in Russia.
Christophe Bonduelle, CEO of the group, explains that “Exporting these types of products, that aren’t expensive per kilo, to a far away country like Russia, is impossible. Logistical costs would end up higher than the product itself”.
The brand is now notorious in Russia and they plan to develop their local production capacities by investing €5 million over the next two years. Mr Bonduelle says that “We are not yet autonomous, we still need to fill in with some imports, and whenever we add capacity, our sales also increase”. Russia is also strategic for the group as they export from there to other CIS countries : Kazakstan, Belarus, Armenia.
With the current economical sanctions against Russia and Putin’s embargo targeting agri-food products, Bonduelle are doing well as they produce 70% of their merchandise in Russia and the rest (tinned products) are not on the list of forbidden produce. However, Mr Bonduelle does say that a large part of their cost is in dollars, “we are not effected by the embargo, but by the huge devaluation of the rouble”. He believes the crisis could be a motor to incite them to strengthen their local presence and reduce their reliance on imports.
For the time being the group seems to have put their range of frozen products on hold (targeted by the embargo), but they are only a marginal share of their sales. The vegetables used come from Poland and they do not have a freezing sector in Russia. Bonduelle say they have found it hard to find sufficiently qualified technicians and agronomists and have made a partnership with Krasnodar University.