Frozen bread builds on Russian foodservice niche

- Last updated on GMT

Russia is a bread country - it has been a staple part of the diet
there for centuries, and to many people it is as much a part of the
Russian way of life as tea or vodka. But even a product with such
an impressive heritage needs to be revitalised every now and again
- hence the growing popularity of frozen bread, especially in the
foodservice sector, writes Angela Drujinina.

Frozen bread is still very much a niche product on the Russian market, but a number of promotional campaigns have helped raise awareness of the product, in particular among the restaurant trade. Although no accurate figures are available, frozen bread is now thought to be bought by 20-40 per cent of Moscow restaurants, which see it as an opportunity to improve their quality credentials.

The bread served in Muscovite restaurants comes mainly from one of three sources: it is bought from an industrial baker, bought from an artisanal baker, or baked in the restaurant's kitchens.

Many upmarket restaurants are loathe to buy bread from large-scale bakeries as this is seen as having a negative impact on their image, with specialists claiming that the quality of the bread is the thing that a restaurant's customers note. But buying bread from smaller bakeries also has its setbacks, not so much in terms of quality but rather volume and price - smaller bakers may not be able to supply sufficient quantities of bread at an attractive price, even for the most exclusive restaurants.

So many restaurants have considered the third way - baking their own bread - but this too has its problems. "It takes a lot of effort to organise an efficient bakery, what with the need to buy equipment and ingredients and pay and train personnel,"​ Renat Agzamov, brand manager of the confectionery chain Le Gato, told"Operating your own bakery makes sense for a restaurant only if the bread produced is also sold to other restaurants and grocery stores. In other words, for such a bakery to be profitable, you have to produce at least a ton of bread a day."

Operating on this scale is clearly beyond the means of most restaurants, and this is why frozen bread has become so popular with many of them - the frozen product is cheap and easy to store, and investments are minimal and there is no compromise on taste.

There are around 10 companies on the Russian market that currently supply frozen bread products, led by major brands such as BCS, Delifrance, Neuhauser, Schoeller, Gramss, Edna, Fricopan, Vandemoortele, Cerealia Unibake, Schulstad and Pain Delice. Some offer more than 100 different varieties of frozen bread. But as yet there are no major Russian frozen bread manufacturers, although several companies, including Talosto, Zvezdny and Valentine 2000 have begun producing pre-formed bakery products such as buns, some of which are now being offered in frozen form. Valentine 2000, for example, supplies frozen buns to the McDonald's fast food chain.

"Frozen buns sell very well,"​ said Svetlana Pronchenko, brand manger of Zvezdny. "Customers are particularly happy with our prices, which are much lower than those for equivalent imported products."

Frozen buns sell for RUR4-8 a piece, frozen baguettes from RUR20-40 each, loaves from RUR40-160 and croissants from RUR7-15.

The challenge for the frozen bread suppliers will be to replicate the growth they have seen in the horeca channel in the mainstream retail market. German company Schoeller, for example, has seen its frozen bread sales in Russia increase by 50 per cent over the last two years, but this has been entirely due to increased orders from the horeca segment.

In the retail sector, frozen bread is available only in selected, upmarket outlets such as Kalinka Stockmann, Megacenter Italia and in the Sedmoi Continent chain, with the price of the product seen as the main barrier to increasing supermarket sales in the short term, something which should change as more Russian firms step up production.

But with profitability in the frozen bread sector set at a minimum of 25 per cent (although some analysts suggest it could be as high as 50-50 per cent), attracting local players to the market should not be difficult.

Related topics: Business & Financial

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