For years a closed market, Russia is now opening its doors to foreign investment in the supplements sector. Major brands are wasting no time in rushing in to access a market growing exponentially as Russian incomes surge.
Traditionally Russia has been a difficult market to access, as its idiosyncratic regulatory system favoured local businesses. But companies such as Vitiva, Herbalife, Seven Seas and Vitabiotics are finding success in a market that accounts for 38 per cent of the $1.8 billion eastern European nutritional market, according to a survey conducted by Nutrition Business Journal and the International Association of Dietary Supplements Associations (IADSA). Between 2005 and 2006 alone, sales in Russia grew by 16 per cent. Still, foreign brands account for only about a third of Russian supplements sales.
"Russia's market represents a unique source of opportunities for dietary-supplements companies," said David Pineda, IADSA's Manager of Regulatory Affairs, "but there is currently little understanding of their very developed and complex regulations. Russian officials are aware of this problem and are keen to help foreign companies better understand the process and get dietary-supplements products into the market."
Gregory Temkin, president of New York-based Russian exporter and certifier, told a Nutracon audience in London in June, that a fine understanding of the regulator — Rospotrebnadzor — was essential to gaining speedy product certification in Russia.
"It is a maze but the number of foreign products coming onto market is proof that it is not impenetrable." He said 400 of 690 foreign products on the Russian market came from China.
Ingredients suppliers are also moving into Russia, with the likes of Chr Hansen and Orafti establishing business there.