Further Growth for Campina in Russia

06/10/06 With drink yoghurts under the Campina brand, Campina successfully builds a second solid pillar under its activities in Russia. The production lines in Campina’s factory in the Russian Stupino (south of Moscow) are already at full capacity and new growth opportunities are on the horizon. Campina now reports 100 million Euro in profitable turnover each year.

Fruttis fruit yoghurt has been on the Russian market since the nineties of the last century. It was actually thanks to Fruttis that a market was developed for fruit yoghurt in Russia. That yoghurt was first produced by Campina in Germany until 2000 when Campina began local production in Stupino. The two initial production lines for Campina Fruttis fruit yoghurts were soon working to full capacity. Campina invested in a third line, which, like the warehouse, was opened in 2003. It wasn’t long before yet another line for drink yoghurts was constructed in the modern production facility.

“Our aim is to expand our portfolio. Our strong brands, Campina Fruttis, Campina Neszny and Campina naturally, carry both spoonable and drink yoghurts”, Campina’s country director in Russia, Bob Steetskamp explains the expansion of the assortment. In addition to locally produced spoonable and drink yoghurts under the Campina brand, Campina Russia also sells imported products, such as Campina cheese, quark, the swirled yoghurt Campina Fruttissimo and the sweet desserts Campina Puddis and Campina Piruet.

Similarly to the production facility, the nearby warehouse is also completely full. Products remain a week in the warehouse following production. During that time the laboratory is busying testing the quality of the series. If the green light is given then delivery can start. There is little choice in a country as immense as Russia where a possible recall in the event of inferior quality is virtually impossible to organise. Vladivostok, for instance is farther from Moscow than New York!

With the advent of new growth potential and production and warehousing flat out, new investments are on the agenda. A production line for coffee milk in cups will move from Western Europe to Stupino, giving the Russian team an excellent opportunity to add value to milk fat themselves. Investments will be made to expand the warehouse and there are plans for further growing the production of dairy drinks.

Large market

The market more or less demands it, according to Bob Steetskamp. Russia has a population of 140 million. “Take into account that if the Russian market continues to grow at the current rate, it will be bigger than any dairy market in Europe within a couple of years. Disposable income is low here but the gas and oil reserves are enormous. The gas and oil proceeds are being invested in economic growth. If the country remains politically stable that will ensure further growth of disposable income.”

The current economic and political climate and income level has brought about a change in consumer behaviour in Russia and also, as a result, in what is available. Steetskamp: “The market and distribution in Russia is still highly traditional but is modernising very quickly.” It is estimated that more than half of the food articles on sale in Russia are still purchased through traditional channels, such as markets. But large new supermarkets are being constructed at every turn and it is anticipated that this will tip the scales.”

An attractive prospect for brand article manufacturers such as Campina. “At traditional markets you will find natural yoghurts. But there’s only one brand for sale. You can actually feel pretty satisfied if you pass three stalls and see one Campina product”, Steetskamp explains. “Supermarkets have a wider selection. And the people with more money to spend are on their way.

Russians traditionally use a lot of dairy. Fresh milk with a shelf life of one or two days, cream and kefir, a thick, mildly sour dairy drink. Campina is expanding on this. Steetskamp: “Consumers view our drink yoghurts as upgraded kefir and therefore also see them as healthy. Mothers drink these yoghurts themselves and buy them for their children.”

With a number of sub-brands under the Campina brands Campina serves the market for drink yoghurts. Campina Fruttis (the fruitiest) Campina naturally, Campina Neszny (flavoured drink yoghurt) and Campina Yogho Yogho, a well established brand in Russia. It was one of the first drink yoghurts to be launched on the Russian market, when it was imported from Aalter in Belgium.

Campina bottle

Just as in the other Campina locations in Aalter and Heilbronn, the Campina Stupino facility fills the drink yoghurts in the uniform Campina bottle. The Campina bottle  is available in a number of sizes, but the shape is always the same. They are all filled on the same line. Staff at Campina in Russia work for marketing, product development and production in close cooperation with their colleagues in the west of Europe. In addition to Campina Innovation in Wageningen, there are the large-scale production locations for dairy drinks in Aalter (Belgium) and yoghurts and desserts in Heilbronn (German).