Atria loses position in Russian market

By Vladislav Vorotnikov

- Last updated on GMT

Artia has seen a sales drop of 23.9%
Artia has seen a sales drop of 23.9%

Related tags: Russia

Finnish meat processor Atria has attributed a drop of sales by 23.9% to EUR 75.1 million to significant difficulties in the Russian market. 

The company’s revenue was hit with the devaluation of the national currency, along with the rise of prices in rubles. Its volume of sales remained at the level of last year.

Management of Atria Russia explained that company saw a reduction of sales in the country first time since 2009. In the period of 2009-2014 market share of Finish manufacturer has been growing with the strongest positions in North-West Federal District and in St. Petersburg in particular, where it is accounted for 20% of sales of meat products.

In comparison, in Moscow it occupied only 2% of market share. In total, management of Atria Russia estimated Moscow’s market for meat and meat products at EUR 1.5 billion, while St. Petersburg’s meat market at EUR 0.5 billion. The drop of sales was blamed on the shift of consumer tastes towards economy segment of the market.

“In the context of economy instability in Russia demand is shifting towards low-price segment of the market, while Atria are not very cheap producer,”​ said president of Atria Russia Jarmo Lindholm.

The fall of demand for production of Atria was also confirmed by representatives of retail chains. In particular, the spokesperson for Trade House Intertorg explained that over recent years in value terms, the fall amounted to 30%, while in natural terms the decrease reached 40-45%. The most noticeable fall has been recorded in the segment of cooked and smoked sausages, where Atria faced competition of local companies.

In response to the current situation, Atria is already focusing on Russian raw meat and considering expansion to the Russian provinces. The company also intends to expand production range which is currently amounts to 400 different positions, still focusing in the manufacturing of high-quality meat.

“Company’s strategy provides that we should remain the market’s leader in terms of the production quality,”​ said Jarmo Lindholm.

“Due to the food embargo on the meat products from Europe, on the Russian market there is good demand for high-quality meat,”​ added the press service of Atria Russia.

Meanwhile, market participants previously noted that despite all challenges positions of Atria at the Russian market is still strong, also because it was not largely depend on import of meat from Europe prior to embargo.

“Atria Russia is a strong company, behind which there is a good international experience, I am confident that it will continue to make profit,”​ said the chairman of the National Meat Association Sergey Yushin.

“From the very beginning, our operation in Russia has been based on the domestic production, and not on the import of products from Finland, and we repeatedly had the opportunity to make sure that this is the right strategy. We do not plan to give it up,”​ Jarmo Lindholm added.

Related topics: Meat

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