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Russian all-natural snack start-up: 'We’re catching the wave, not chasing it'

By Kacey Culliney+

29-Jul-2014
Last updated on 30-Jul-2014 at 09:59 GMT

The Marc Bakery will launch a low-budget all-natural kids cereal line later this year to target mass retailers
The Marc Bakery will launch a low-budget all-natural kids cereal line later this year to target mass retailers

The Marc Bakery aims to transform its $1m Russian snack business into $45m in just three years – a possible goal in a country where all-natural remains nascent, its founder says.

Established in 2012, the Moscow-headquartered snack maker will reach its first million in annual turnover this year, posting growth of around 300%.

The Marc Bakery makes additive- and preservative-free granola, bars and cookies using ingredients imported from all over the world and retails in five major premium Russian retail chains.  

Speaking to BakeryandSnacks.com, founder and CEO Alexandra Shaforost said she had big plans for transforming the business over the coming years.

The banker-turned-snack founder wanted to bolster annual turnover to $45m in three years through national expansion and new product development.

“If it goes the way we’re looking at it, and without major economical disasters, it’s quite possible. I’m very optimistic, and with a new line I have a feeling we’re going to be able to do it,” she said.

The Marc Bakery was at recipe refinement stage on a line of puffed cereal for kids, set to launch towards the end of the year. It had worked with a production partner on the project as it was a low-budget line that targeted mass retailers, rather than premium chains.

“This line is completely different as it’s going to be purely driven by volume. It’s going to retail in stores equivalent to Tesco and Carrefour,” she said.

The snack bars will be launched throughout Russia

The snack firm also launched a premium snack bar last week – made from 60% dried fruits and 40% granola – and had developed smaller versions of its entire portfolio to align better with regular retail customers in terms of price. For example, its 150 g granola packs that retailed close to $10 had been made into 50 g packs selling at just under $3. “It’s still going to be hard for lower-income customers to buy 50 g of our granola, but it’s easier to pay $2 versus $10,” Shaforost said.

Over the next year, the company would focus on securing national distribution across premium and regular retailers with its new cereal, downsized pack varieties and regular portfolio, she said.

Russia is catching on with ‘all-natural’

Shaforost said it was an exciting time to be working in Russia given the all-natural space was still small. In premium retailers, all-natural sections had been established for three or four years, but it was only in the last year regular retailers had started to build natural product sections, she explained.

In Russia, the wave of healthy eating and green production had only caught on very recently, she said, and so it was brimming with untapped potential. “We’re catching the wave, not chasing it.”

“…It’s interesting because it’s a relatively young market and it’s interesting to be at the forefront. It’s better to be a big fish in a small pond than a teeny, tiny fish in a big ocean,” she said.

The concept of eating granola for breakfast with milk or yogurt was something that had recently caught on with Russian consumers, she said, and it was fulfilling to be a part of the development and education.

The Marc Bakery has a range of cookies that it will test in the US, along with its granola and bar products

Asked if the company had plans to start locally sourcing its ingredients, she said it was unable to because Russia’s suppliers were unreliable in terms of consistent quality. For the time being, the company would stick to sourcing ingredients from other markets, she said, for example chocolate from Belgium and berries from the US.

US test-run

In addition to its strong domestic expansion plans, Shaforost said the company had its eye on the US market because of the sheer size and appreciation of all-natural snacks.

In August The Marc Bakery would test products in local coffee shops across Los Angeles, California to establish what US consumers thought of the Russian products and how much they would be willing to pay for them.

Ultimately, if testing went well, she said the company would work to secure a US co-manufacturer.

“If people like our products, we’ll transplant recipes and everything from Russia to the US,” she said.

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