Competition in the Russian Market of Healthy Drinks in 2012–2021

The growing interest in a healthy lifestyle among Russian consumers leads to an increase in demand for healthy food products and beverages, which is reflected in the rather high growth rates of this market and its increased attractiveness for manufacturing companies. In this article, the purpose of the study is to assess the dynamics of the level of competition in the segments of the Russian market of healthy drinks (“Better for You”, “Fortified/Functional”, “Naturally healthy” and “Organic”) and throughout the market as a whole from 2012 to 2021. To achieve the goal, the following tasks are set: 1) to identify the dominant group of players, the degree of differentiation within the group itself; 2) to determine the level of market concentration; 3) to analyze the dynamics of the level of competition from 2012 to 2021. To determine the degree of concentration of market segments, the Herfindahl – Hirschman index (HHI) is used, to identify a group of dominant players and its size – the Lind index (IL) and the concentration coefficient (CRSV), to determine the degree of differentiation between the leading players – a modified version of the Hall – Tideman index (HTSV), to analyze the dynamics of the level of competition, – matrix SV (Strength/Variety). The conducted research shows that for 2012–2021 in all segments of the healthy drinks market, one or another trend of leaving the RO quadrant occurs either by increasing the total market share of leaders, or by increasing the level of differentiation between players. In each of the market segments, there is a tightening of monopolization, in the market as a whole – a complete departure from free competition to natural oligopolization. The composition of the dominant groups in large market segments strongly intersects and includes major international players, although there is a noticeable decrease in their share in the market under consideration.

1. Global’noe issledovanie potrebitel’skogo povedeniya za 2020 god: Rossiya. Transformaciya potrebitelya [Global Consumer Behavior Survey 2020: Russia. Consumer transformation]. Roskongress, 2020. Available at: https://roscongress.org/materials/globalnoe-issledovanie-potrebitelskogo-povedeniya-za-2020-god-rossiya-transformatsiya-potrebitelya/ (accessed 15.10.2022).

2. Health & Wellness report: Search & sosial trends: 21/22. Curated, 2021. Available at: https://curated-digital.com/wp-content/uploads/2021/10/Curated-Health-and-Wellness-Report-21-22.pdf (accessed 15.10.2022).

3. Stark C. Guidelines for Food and Nutrient Intake. Biochemistry, Physiology and Molecular Aspects of Human Nutrition, 2013, pp.34-47.

4. Healthy diet. WHO, 2019. Available at: https://www.who.int/health-topics/healthy-diet#tab=tab_1 (accessed 15.10.2022).

5. Sustainable healthy diets: guiding principles. WHO, 2019. Available at: https://linkscommunity.org/assets/PDFs/fao_who-sustainable-healthy-diets-guiding-principles-2019.pdf (accessed 15.10.2022).

6. Stevenson R. J. Psychological correlates of habitual diet in healthy adults. Psychological Bulletin, 2017, vol.143, no.1, pp.53-90. DOI: 10.1037/bul0000065.

7. Cena H., Calder P. C. Defining a healthy diet: evidence for the role of contemporary dietary patterns in health and disease. Nutrientsт, 2020, vol.12, no.2, article 334. DOI: 10.3390/nu12020334.

8. Hughes R. Definitions for public health nutrition: A developing consensus. Public Health Nutrition, 2003, vol.6, no.6, pp.615-620. DOI: 10.1079/PHN2003487.

9. Landman J. P., Buttriss J., Margetts B. Curriculum design for professional development in public health nutrition in Britain. Public Health Nutrition, 1998, vol.1, no.1, pp.69-74. DOI: 10.1079/PHN19980010.

10. Yngve A., Sjostrom M., Warm D., Margetts B., Perez Rodrigo C., Nissinen A. Effective promotion of healthy nutrition and physical activity in Europe requires skilled and competent people. Public Health Nutrition, 1999, vol.2, no.3A, pp.449-522. DOI: 10.1017/S1368980099000622.

11. RF Federal law “On the Quality and Safety of Food Products” (as amended and supplemented, effective from January 1, 2022) of January 2, 2000 no.29-FZ (in Russian). SPS «Konsul’tantPlyus». Available at: https://www.consultant.ru/document/cons_doc_LAW_25584/efaa8841551e1fcaea7bf10c4c512f61aa256f8a/ (accessed 15.10.2022).

12. Rukovodstvo programmy SINDI po pitaniyu [CINDI Nutrition Guide]. Ed. by D. Makklin. WHO, 2000. Available at: https://www.euro.who.int/__data/assets/pdf_file/0011/119927/E70041R.pdf (accessed 15.10.2022).

13. Golubev V. S., Berkovich M. I. Healthyfood: Perception, dynamics, popularization. Teoreticheskaya ekonomika, 2020, no.3(63), pp.98-104 (in Russian).

14. Gosudarstvennyi doklad «O sanitarno-epidemiologicheskoĭ obstanovke v Rossiiskoi Federatsii v 2010 godu» [State report “On the sanitary and epidemiological situation in the Russian Federation in 2010”]. Moscow, Federal’nyi tsentr gigieny i epidemiologii Rospotrebnadzora, 2011, 431 p.

15. Gerasimenko N., Poznyakovskij V., Chelnakova N. Healthy eating and its role in ensuring the quality of life. Tekhnologii pishchevoi i pererabatyvayushchei promyshlennosti APK – produkty zdorovogo pitaniya, 2016, no.4(12), pp.52-57 (in Russian).

16. Health and wellness in 2021: The big picture. Euromonitor, 2022. Available at: https://www.euromonitor.com/health-and-wellness-in-russia/report (accessed 15.10.2022).

17. Evdokunina E. A., Rokotyanskaya V. V. Features of the market of functional drinks in Russia. Pivo i napitki=Beer and Beverages, 2014, no.5, pp.16-18 (in Russian).

18. Van Dam I., Wood B., Sacks G., Allais O., Vandevijvere S. A detailed mapping of the food industry in the European single market: similarities and differences in market structure across countries and sectors. International Journal of Behavioral Nutrition and Physical Activity, 2021, vol.18, no.1, article 54. DOI: 10.1186/s12966-021-01117-8.

19. Baker P., Friel S. Food systems transformations, ultra-processed food markets and the nutrition transition in Asia. Globalization and Health, 2016, vol.12, no.1, article 80. DOI: 10.1186/s12992-016-0223-3.

20. Al’husajni N. S. Comparative analysis of the level of competition in the russian and iraqian soft drinks markets. Prakticheskii marketing=Practical Marketing, 2018, no.5(255), pp.24-29 (in Russian).

21. Besanko D., Dranove D., Shanley M., Schaefer S. Economics of Strategy. Wiley, 2009, 563 p.

22. Willis M. S., Rogers R. T. Market share dispersion among leading firms as a determinant of advertising intensity. Review of Industrial Organization, 1998, vol.13, no.5, pp.495-508. DOI: 10.1023/A:1007704811420.

23. Yitzhaki S. Relative deprivation and the Gini coefficient. The Quarterly Journal of Economics, 1979, vol.93, no.2, pp.321-324. DOI: 10.2307/1883197.

24. Hall M., Tideman N. Measures of concentration. Journal of the American Statistical Association, 1967, vol.62, no.317, pp.162-168. DOI: 10.1080/01621459.1967.10482897.

25. Linda R. Methodology of concentration analysis applied to the study of industries and Markets. Brussels, Commission of the European Communities, 1976, 160 p.

26. Shannon C. E. A Mathematical Theory of Communication. The Bell System Technical Journal, 1948, vol.27, no.3, pp.379-423. DOI: 10.1002/j.1538-7305.1948.tb01338.x.

27. Gastwirth J. L. The estimation of the Lorenz curve and Gini index. Review of Economics and Statistics, 1972, vol.54, no.3, pp.306-316. DOI: 10.2307/1937992.

28. Elzinga K. G., Mills D. E. The Lerner index of monopoly power: Origins and uses. American Economic Review, 2011, vol.101, no.3, pp.558-564. DOI: 10.1257/aer.101.3.558.

29. Cowell F. Measuring Inequality. 3rd edition. Oxford University Press, 2011, 233 р. DOI: 10.1093/acprof:osobl/9780199594030.001.0001.

30. Vertogradov V. A., Shchelokova S. V. SV Matrix: Strategic competitive analysis tool based on dominance level. Vestnik Moskovskogo Universiteta. Seriya 6: Ekonomika. 2021, no.6, pp.137-142 (in Russian). DOI: 10.38050/01300105202167.

31. Vertogradov V. A., Shchelokova S. V. Premium car brands strategies and regulator’s actions in Russia (2009-2021). Mir novoi ekonomiki=The World of New Economy, 2022, vol.12, no.2, pp.64-75 (in Russian). DOI: 10.26794/2220-6469-2022-16-2-64-75.

32. Blohin A. A., Lomakin-Rumyancev I. V., Naumov S. A. Alpha business in the Russian food market. Ekonomicheskie strategii=Economic Strategies, 2019, vol.21, no.6(164), pp.68-77 (in Russian). DOI: 10.33917/es-6.164.2019.68-77.

33. Bukvić R., Pavlović R., Gajić I. Possibilities of Application of the Index Concentration of Linda in Small Economy: Example of Serbian Food Industries. Annals of the Oradea University. Fascicle of Management and Technological Engineering, 2014, vol.XXIII, no.3, pp.159-164. DOI: 10.15660/AUOFMTE.2014-3.3070.

34. RF Order of the Federal Antimonopoly Service of Russia “On approval of the procedure for analyzing the state of competition in the commodity market” of April 28, 2010, no.220 (in Russian). Federal Antimonopoly Service of Russian Federation, 20.08.2010. Available at: https://fas.gov.ru/documents/576468?ysclid=lc90p9vsmm975598002 (accessed 29.12.2022).

35. Vertogradov V. A., Shchelokova S. V. The evolution of competition and Russia’s position in the global mineral fertilizer markets. APK: Ekonomika, upravlenie=AIC: Economics, Management, 2022, no.9, pp.91-103 (in Russian). DOI: 10.33305/229-91.

36. Koffieen theemerk DE Master Blenders 1753 (Douwe Egberts) en het Amerikaanse voedselconglomeraat Mondelez International voegen hun koffieactiviteiten samen. NU.nl, 07.05.2014. Available at: https://www.nu.nl/economie/3769565/douwe-egberts-en-mondelez-fuseren.html (accessed 17.11.2022).

37. Oborot roznichnoi torgovli (s 2000 g.) [Retail turnover (since 2000)]. Rosstat, 2022. Available at: https://rosstat.gov.ru/statistics/roznichnayatorgovlya (accessed 22.11.2022).

38. Coca-Cola v Rossii zapuskaet kategoriyu funktsional’nykh produktov pod brendom BotanIQ [Coca-Cola in Russia launches a category of functional products under the BotanIQ brand]. Coca-Cola v Rossii, 20.04.2021. Available at: https://www.coca-cola.ru/about-us/press-releases/botaniq?ysclid=laybv6dg5o853174918 (accessed 26.11.2022).

39. Van Hoof K., Gopinath S. Peet’s Coffee IPO Raises $2.5 Billion. Bloomberg, 29.05.2020. Available at: https://www.bloomberg.com/news/articles/2020-05-29/jde-peet-s-coffee-ipo-raises-2-5-billion-at-breakneck-speed (accessed 20.11.2022).

40. Monster Beverage. Globalny.biz. Available at: https://globalny.biz/catalog/id/2076 (accessed 26.11.2022).

41. Monster Beverage: Can Mixing Java and Coca-Cola Create a Drinkable Concoction for Investors? Seeking Alpha, 29.03.2018. Available at: https://seekingalpha.com/article/4160082-monster-beverage-can-mixing-java-and-coca-cola-create-drinkable-concoction-for-investors (accessed 26.11.2022).

42. Kudenko A. «Borzhomi» planiruet prodat’ v Rossii v 2013 godu 30 mln butylok vody [Borjomi plans to sell 30 million bottles of water in Russia in 2013]. RIA Novosti, 01.07.2013. Available at: https://ria.ru/20130701/946873890.html (accessed 27.11.2022).

43. Aiolfi S. Orior übernimmt Thurella. NZZ, 01.03.2018. Available at: https://www.nzz.ch/wirtschaft/orior-steigt-mit-kauf-von-thurella-in-biogetraenkemarkt-ein-ld.1361729 (accessed 21.11.2022).

44. Pfannschmidt-Wahl von Jutta. Partnerschaft mit Schweizer Konzern. foodservice, 04.09.2018. Available at: https://www.food-service.de/management/news/casualfood-partnerschaft-mit-schweizer-konzern-41338 (accessed 21.11.2022).