Speak to any processor in the Russian food and drink market about the challenges that they face and one of the most frequently discussed issues is that of quality. Suppliers, it seems, have often struggled to meet the discerning standards that processors require in order assure optimum quality standards. In the area of ingredients, this has often proved to be a major issue, with major western manufacturers such as Nestlé and Unilever fighting hard to maintain their global standards.
In a recent interview with Cee-Foodindustry.com Nestlé's brand manager in Russia, Elena Shevyakova, conceded that it had been having particular problems sourcing high quality milk powder suppliers on the domestic market for its confectionery lines. But with the growth of the global food giants in the Russian market, the food and drink sector is also of the general consensus that quality is definitely improving.
"Kraft Foods Russia demands the same standards of quality from its suppliers as it does in other markets such as western Europe and the US," said Kirill Bolmagov, head of corporate affairs. "All our suppliers in Russia are thoroughly audited by our quality control department and if they meet our standards then they can become a Kraft certified supplier. Basically we have the same quality standards for all our suppliers, with no deviation."
Improvements have also been helped along by a tightening of government legislation on processed foods. Comprehensive labelling of ingredients on packaged ingredients, along side specific information about the shelf life of the product, are all now mandatory, due mainly to the Quality and Safety of Food Law which came into being in 2000.
"In recent years the quality of suppliers in Russia has improved tremendously thanks to legislation and our required standards," Bolmagov added. "If standards are not good enough then we will advise suppliers on what they might have to do to reach the requirements. Although supplies are dependent on where the ingredients can be sourced, we are finding that more and more Russian suppliers are now reaching those required standards. This has been driven by increasing demands from processors and the fact that suppliers want to work with large international companies.
"If there are issues with quality we will advise companies on what exactly is wrong. We have a very comprehensive research and development department which is concerned with issues of quality. This department liaises closely with suppliers and is a primary source of advice on how to attain the required standards."
On the issue of packaging, Bolmagov also stresses that there has been huge changes and that vast improvements have occured within the domestic market in recent years.
"A few years ago we had a problem with packaging materials not coming up to standards. This presented problems for us, particularly in the area of quality. However, constant dialogue with our suppliers has gone some of the way to improving standards. On top of that, there has also been a huge boom in the sector and the increased competition has also raised standards. The entry of western packaging companies has undoubtedly done much to raise standards, too, but equally domestic suppliers are also responding and raising their standards."
Although Kraft Foods Russia does not publish its financial results separately from the group results, the division is currently one of the leading players in both the confectionery and coffee sectors. Currently the division is looking to increase its foothold in the confectionery sector with the launch of well-known brands such as Milka chocolate.