After the start of a special operation in Ukraine and the imposition of sanctions, the domestic sports nutrition market, built on a multimillion-dollar annual import, faced a shortage of raw materials and a significant reduction in the range. Domestic producers managed to increase the volume of production by 1.5 times at significantly increased prices.
ShareSports nutrition occupies one of the segments of the dietary supplements market. Most often, it is available in the form of bars, gels or mixtures that need to be diluted with water. Sporpit replaces a full meal or supplements it – with the help of supplements, you can quickly replenish the supply of proteins, carbohydrates and fats in the body, increase endurance, accelerate muscle growth and the process of losing weight.
Despite all the positive effects, by the beginning of the pandemic in 2020, according to experts, no more than 1 % population – but even this is regarding one and a half million people. Analysts estimate the annual volume of consumption in Russia of all types of sports nutrition at 8.8–9 thousand tons, or 17.6–18 billion rubles.
To date, the domestic sports nutrition, according to the scientific supervisor of the Federal State Budgetary Educational Institution «Federal Research Center for Nutrition and Biotechnology», Academician of the Russian Academy of Sciences Viktor Tutelyan, takes only 7 % domestic market. At the same time, Russia annually exports regarding 130 tons of sports nutrition at an average price of 8-9 dollars per kilogram of products. It is mainly bought in Kazakhstan and Belarus – in other countries, domestic brands are significantly losing competition with well-known world brands.
Among the largest industry players in Russia are CJSC Evalar (revenue for 2021 – 11.7 billion rubles, net profit – 2.6 billion) and CJSC Infaprim (revenue for 2021 – 3.3 billion, net profit – 151 million).
Almost all raw materials are imported
Active development of the Russian sporpit began only in the last eight years. Until 2014, the market is more than 96 % consisted of imported products. The economic and political events of that time, according to the commercial director of the Geon brand Mikhail Sidorenko, had a positive impact on the domestic industry: due to the sanctions imposed on Russia following the annexation of Crimea, the import of most of the sporpit was banned, and the weakening of the national currency raised prices for the remaining imports .
“As a result, buyers had to look for an alternative among Russian brands, which did not happen before because of distrust in our product. Since we have very worthy manufacturers, whose products are sometimes even better than imported ones, many have finally switched to the Russian sports nutrition, – said Mikhail Sidorenko.
The Geon company was founded in 2009 by scientists Sergey Shterman and Mikhail Sidorenko. According to SPARK-Interfax, Geon’s revenue for 2021 amounted to 277 million rubles, net profit – 25 million rubles.
Despite the noticeable development of domestic production following 2014, at the end of February 2022, the domestic market continued to be critically dependent on the import of raw materials – casein and protein concentrates. According to the customs service, in January-May 2020, Russia purchased 2,682 tons casein total $18.7 millionas well as 1,404 tons protein concentrates and textured protein substances worth $1.7 million. France became the main supplier of raw materials (1 711 tons casein) and China (1 050 tons squirrel).
In January-May 2021, casein imports decreased to 2 345 tonswhile its cost, on the contrary, increased from 6.9 to 8.1 dollar per kilogram, up to $19 million. Protein supply increased to 1 914 tons and $3.6 million from 1.2 to $1.8 per kilogram. France once more became the main importer (1,852 tons casein) and China (1,585 tonsn protein).
True, at the same time, as Ruslan Khaletsky, the founder and CEO of Geneticlab Nutrition, notes, the data of customs declarations do not reflect the real picture – a significant part of sports nutrition came to Russia through “gray” schemes.
The Russian brand of sports nutrition Genetic Lab was founded in St. Petersburg in 2014 by a professional bodybuilder, nutritionist and nutritionist Ruslan Khaletsky. According to SPARK-Interfax, in 2021 Genetic Lab’s revenue amounted to 295 million rubles, net profit – 10.5 million rubles.
Contracts are no longer awarded
After the start of the special operation in Ukraine, the imposition of sanctions and the complication of logistics, it was protein that became the main problem for domestic manufacturers of sports nutrition.
The most common type of protein – whey, like casein, is obtained from cow’s milk. In Russia, according to Ruslan Khaletsky, there are several local suppliers of such raw materials, but their production volumes are not enough to completely replace foreign supplies. With the processing of other sources of protein – egg, soy and vegetable – in Russia there are also problems so far.
– Protein prices have doubled since the beginning of the special operation, but the strengthening of the ruble slightly leveled this process. Contracts for the supply of raw materials are no longer concluded, we bought the latter at an adequate price, so now we have reserves for a certain period. Problems start when they end. So far, everything is in order,” Khaletsky shared.
Now the market is regulated by two multidirectional processes – sanctions and the strengthening of the ruble, which negatively affects exports, Mikhail Sidorenko told Fontanka. According to him, sports nutrition for some countries has risen in price by 30–40 % in their currency. In Russia, sanctions have reduced imports and increased the volume of national brands.
— The cost of raw materials for Russian sporpit is strongly influenced by logistics and economic processes in exporting countries. At present, the political situation still does not allow foreign brands to be fully returned, however, the strengthening of the ruble and the growth in the cost of raw materials have led to the fact that prices for Russian sports nutrition have begun to approach foreign ones, Sidorenko notes.
One of the consequences of this situation may be a drop in the quality of sports nutrition and an increase in the number of fakes. According to Ruslan Khaletsky, there are already supposedly European companies on the market, whose products “actually crumble in Russian garages.”
At the same time, the sanctions also had positive consequences. The exit from Russia of the American online platform for the sale of dietary supplements and vitamins IHerb played into the hands of sports nutrition sellers.
– Russian consumers of sports nutrition include not only athletes. An equally large group is made up of people who take dietary supplements on the recommendation of doctors, and those who see them as an alternative to expensive drugs. Collagen, for example, is mainly bought by grandmothers – it is at least two times cheaper than medicinal analogues. The closure of IHerb provoked an increase in demand for products manufactured by sports nutrition manufacturers, said the CEO of Geneticlab Nutrition.
Prices have doubled
Following the manufacturers, sports nutrition stores also felt the consequences of the sanctions. According to FitnessBar.ru, the changes affected both imported and domestic products.
– Deliveries from abroad have become much smaller, they have ceased to be regular, it has become harder to plan your work. In this regard, many importers are in no hurry to sell off their existing stocks, keeping prices consistently high, despite the rollback of the exchange rate. The assortment is gradually reduced, despite the fact that some of the goods still reach us. A significant part of domestic products contains imported ingredients, and therefore we do not expect price cuts here either, – said the Fontanka company.
FitnessBar.ru’s revenue for 2021, according to SPARK-Interfax, amounted to 65.5 million rublesnet profit – 3 million rubles.
A sharp increase in the cost of domestic and foreign products was also noted by Ruslan Khaletsky. According to his estimates, over the past six months, following the prices of raw materials, they have approximately doubled – and this is “not the limit yet.”
At the same time, demand for imported goods remains high. However, as FitnessBar.ru notes, once morest the background of a decrease in supply, buyers are forced to look at domestic brands and “are surprised to find that many of them are no worse than foreign ones.”
According to Ruslan Khaletsky, Russian state requirements for the quality of sports nutrition are much higher than foreign ones. Therefore, the founder of Geneticlab Nutrition himself would recommend that those who take sports nutrition and supplements buy “primarily products made in Russia.”
The industry remains hopeful
After producers run out of imported protein stocks, the domestic market will also adjust to demand, Ruslan Khaletsky believes. In addition, according to the businessman, companies will be able to establish new supply chains – for example, import raw materials through Turkey. Prices from this, he estimates, will rise by regarding 8–10 %.
As Mikhail Sidorenko notes, the growth of the Geon brand in the first half of 2022 amounted to 47 % relative to the same period last year. According to his forecasts, the Russian sports nutrition market, despite the sanctions, will continue to grow further.
Market participants expect that in the near future the production of high-quality whey will open in Russia or new suppliers from the CIS countries will be found.
Polina Kolosova, for Fontanka.ru
