PepsiCo opens a baby food plant in Krasnodar region for 2.6 billion rubles

"It's Danone, Nutricia, PepsiCo and the Russian company "Progress", — said the representative of "Soyuzmoloko" Maria Zhebit. "The market for baby food in Russia is developing dynamically, despite the fact that other categories of dairy products have ceased to show growth." 

In Krasnodar region PepsiCo owns the Timashevskiy dairy plant bought from "Wimm-Bill-Dann" in 2011 with a capacity of 500 tons of finished products a day. The amount of the deal was $5.4 billion.

The capacity of the plant for the production of baby dairy products will be 25 tons of finished products per day at the first stage of the project. The plant will produce cheese and yogurt under the brand names "Agusha" and "Chudo detki". "The construction of a new plant in Krasnodar region will allow us to increase the production of baby food and expand the range of products. We will be able to manage logistics in the southern Federal district more effectively, providing consumers with fresh, healthy and tasty products for children made from raw milk from local farms", — commented the company on the investment project at the beginning of implementation. 

"Not every region can provide a full raw material base for children's dairy products. There is not such a problem in Krasnodar region. We grow in production of high quality milk. I think it played a certain role in the choice of the construction site for the plant", — said General Director of the Association of dairy industry enterprises "Kubanmoloko" Konstantin Synetskiy.

A study of the baby food market in Russia in 2016 done by Euromonitor International says that PepsiCo occupies 8.9% of the market, the highest share belongs to "Progress" (brand "Frutonyanya") — 16.1%. Danone has 13.8%, Nestle - 9.9%. The entire market was estimated at 264.8 billion rubles. The company was not able to comment quickly how much the share of PepsiCo would increase due to new capacities. It is known only that PepsiCo will increase the range of products for children by 27 items — up to 127 items.

According to Consulting Agency Nielsen from July 2016 to June 2017 sales of baby food on the market in Russia in real terms increased by 1.3% (no data at the end of 2017). At the same time, it is dairy products for children that give the industry a positive dynamics. Sales of baby dairy products increased by 11.1% in real terms and by 10.9% in monetary terms. The share of dairy products in the market of baby food is 25.6% in real terms.

Read full article in Russian on DairyNews.ru