Symrise, the fourth largest flavours and fragrances company in the world, has recently become the first such company to start production of flavours in Russia. The new site in Rogovo (near Moscow) will not only give Symrise better access to manufacturers in Russia, but will enable it to serve countries to the south and west of Russia which are not easily accessible from its other sites in Europe and Asia.
Russia is the 10th largest market for flavours worldwide, with volumes of around 26,000 tonnes in 2010. Growth has been fairly flat in recent years, although sales are predicted to rise.
Symrise will initially produce flavours for the savoury products and snack foods market at the new site. However, soft drinks account for the largest proportion of flavours consumed in Russia, and this category is also one of the fastest growing, with a CAGR of nearly 4% forecast between 2010 and 2015.
Dairy products is another important category, accounting for over 20% of flavour consumption, along with alcoholic drinks (20%) and confectionery (12%). Therefore, Symrise should make sure that its initial decision to focus on savoury products and snack foods is only short-lived, and should look to expand quickly into the more lucrative areas of beverages, dairy products and confectionery.
Like most of the leading flavour and fragrances companies, Eastern Europe (including Russia) accounts for a relatively small proportion of sales, in Symrise’s case just 9% of its 2010 sales (in local currencies). However, the company saw sales grow in the region by over 10% between 2009 and 2010.
It is, therefore, becoming an increasingly important region for the company, along with other emerging markets in Asia Pacific, Latin America and Africa and the Middle East. Investment is therefore vital in these regions if it is to remain a leading player in the world market.