Big players conquering ready-to-eat food market in Kazan
The e-grocery segment is growing rapidly and could reach almost a trillion rubles by the end of the year
The Russian ready-to-eat food market will grow by a third this year — to 990 billion rubles, analysts predict. The dynamics of food retail trade has attracted many companies, even non-core businesses — Wildberries and the Ekoniva agricultural holding launched their projects this week, and St Petersburg-based ready-to-eat food delivery service Grow Food has chosen Kazan as its fifth region of presence. Read more about what is behind the rapid growth of the segment, which has already eaten away at restaurateurs’ profits, and how the latter intend to resist in a report of Realnoe Vremya.
“People living alone do not cook”
Sales of prepared food in Russia will increase by 33% by the end of the year and will amount to 990 billion rubles, according to Infoline. Thus, analysts have adjusted their summer forecast, when they believed that the market would grow by 40% and exceed 1.05 trillion rubles. This was prevented by a shortage of production capacity, experts explained. Nevertheless, the demand for prepared food continues to grow.
“Today we have 28.5 million households consisting of one person. In 2010, there were 14 million of them. People living alone, and especially in studio apartments, do not cook in their kitchens. They buy or order prepared food with delivery or eat in catering establishments. And most often, they combine both formats,” said the agency's Director General Mikhail Burmistrov.
Overall, online sales by the end of 2024 will grow by 37.4% and amount to 20.6%, of which 4.9% will be food products, 34.1% — non-food products, the analyst specified. According to him, by 2027, the share of e-commerce in the country's total turnover will reach 30.9%, of which 9% will be food sales.
“The service began operating in Kazan without significant investment”
The first working week of December turned out to be rich in the launch of new prepared food projects in the country. On Tuesday, Wildberries announced its entry into this market together with X5 Group — its online hypermarket Vprok.Ru was the first partner of the marketplace. You can order groceries and prepared food in the platform's mobile application where customers are offered about 35,000 items, excluding products sold by weight — it will appear later. At first, the pilot was launched in Moscow, and in the future, the service’s geography is planned to be expanded throughout the country. Moreover, with the use of “express delivery” — the online platform recently introduced this service in Kazan.
A day earlier, the largest Russian producer of raw milk Ekoniva Group launched its project in the field of food retail. The country’s leading agricultural holding, managing assets in 13 regions, including Tatarstan, began selling ready-made and frozen food. The products are manufactured on the basis of dairy components of its own production. The assortment includes syrniki, pancakes with cottage cheese and cheese, cottage cheese casserole and omelette. For now, these are test sales, the group is studying feedback from customers. It explained its decision by the growth in consumption of ready-made meals. Sales are underway in the holding’s networks in Moscow and Voronezh, and in the future, they want to scale up the project. Experts estimated the investment in the launch of production at the partner’s facilities at 30-50 million rubles.
Food retail trade is also gaining momentum in the regions. A new big player entered the Kazan market this week — the ready-made meals delivery service Grow Food. Our city became the fifth region of presence of the St Petersburg company after both cities, Nizhny Novgorod and Voronezh.
You can place an order on the website or in the application, choosing the subscription type and the service period — for 2, 6 or 30 days. The service covers the whole of Kazan and the nearest satellite cities. The company's Marketing Director Ilona Trizno noted that Kazan is “a rapidly developing metropolis, where local residents often do not have enough time for proper nutrition.” She sees “enormous potential” in the development of the service in Tatarstan.
“The service began operating in Kazan without the need to create new infrastructure or significant investments. We use our existing logistics network and operational processes, which have proven their effectiveness. This allows us to minimize start-up costs,” the company told Realnoe Vremya. “The logistics are designed to ensure uninterrupted delivery of rations to Kazan and other regions. Grow Food was founded in St Petersburg in 2015 by Daniel Galper and Pavel Paskar. According to the company, about 15 thousand people use the service daily, the total number of clients is over 20 million.”
There is a private plant with an area of 2,200 square metres in Kolpino, the production capacity of which is 12 tons of products per day, or about 1.25 million portions of ready-made meals per month. In 2022, the company launched PriEm brand — a discounter of ready-made rations with delivery, in 2023 — it was on the shelves of retailers and launched a chain of cafes under a franchise in 12 cities, but Kazan is not among them.
“As for the opening of offline points, we always carefully study the demands of the audience and are ready to consider new formats of presence in the regions,” the PR service of the service reported. –“The plans for the future are to expand the range of rations, add new tariffs and actively participate in city events.”
“The habit of ordering food eats up a lot of revenue for restaurants”
The entire catering market in Russia reached 4 trillion rubles. At the same time, the volume of sales of ready-made food with delivery last year grew to a trillion rubles, and experts predict a doubling of this figure by 2027. This trend worries Tatarstan restaurateurs.
According to him, if Kazan residents used the services of couriers for food delivery, mainly ordering something from groceries or large packages of water so as not to carry heavy things themselves, now they do not even go for fruit or ice cream, arranging delivery through various services. “This consumer habit of sitting at home and ordering food works really well and eats up a lot of revenue not only for restaurants, but also for shopping centres, now people even order clothes through marketplaces more often,” the expert noted.
The speaker believes that now is the time for Internet resources that create projects with food delivery, which is convenient and easier for many residents of huge cities:
“I assume that in the next 10 years this will greatly affect our business. Therefore, restaurateurs will have to sell people experiences, we will no longer be able to compete for the consumer in terms of his desire to just eat. For a person, food, like fuel, is already delivery. In reality, 15, 20 minutes, half an hour maximum, and it is still faster than getting ready, going to the restaurant, looking at the menu, placing an order, waiting for it to be cooked and brought out. Now it is easier to order standardised food: they bring it to you, you eat quickly, satisfy your hunger and then go about your business.”
Sales of prepared food in Russia by the end of the year will increase by 33% and amount to 990 billion rubles, according to Infoline.
In the future, restaurants will become a place where people will go for impressions and live communication. As for the delivery of prepared meals from the catering establishments themselves, according to the speaker, “now for a restaurant it is an unprofitable story”, courier services take up to 35% of the revenue. “We, as restaurateurs, will not be able to compete with anyone, because after some time, Yandex will build its own factory kitchens and will deliver the same burgers, rolls, sushi, and everything will be great for them.”
At the same time, despite the competition with e-grocery players, the expert believes that the Russian catering market “is still empty and has room to grow and develop.” Nurislam Sharifullin believes that in the next 10-15 years, the restaurant industry “will transform and take on a different look.”
“The ready-to-eat food market is growing and will continue to grow”
Russian food retail is actively developing, confirms another expert, Director of A-Development Vladimir Shaikhiev. Studies show an increase in online sales in various segments, including food products. Therefore, new projects have great potential.
According to the speaker, a competitive struggle for consumers is currently flaring up in the regional market for the delivery of products and prepared food. “Samokat is developing very actively, looking for premises. The coverage area in the city allows them to deliver quickly, and the prepared food is delivered immediately hot. Yandex is still losing to them. Sberbank's Kuper doesn’t have its own sites, they are recruiting. All this suggests that there is consumer demand,” Vladimir Shaikhiyev noted.
At the same time, the development of ready-made food delivery services, according to him, should not cause serious damage to the catering industry. “Visiting restaurants is not always a process of eating food, it is a form of leisure. But budget segment formats: cafes, canteens — this can become critical for them," the expert concluded.