Russia is a key destination for cheese taking up almost one third of total EU exports, according to reports.

At the Dairy NPD Conference earlier this year in Amsterdam, Valio Russia echoed this growth opportunity. Russia has a population of approximately 142 million consumers with the main concentration in St Petersburg and Moscow. Dairy consumption continues to grow, albeit remaining under developed by international standards at 4.2 kilogrammes per capita.

This compares to 19 kilogrammes in Finland and 14 kilogrammes in France. This indicates significant growth potential. Fresh dairy produce represents 30% of the dairy market followed by yellow cheese at 27%, butter at 23% and processed cheese at 20%.

In terms of cheese, Euromonitor International reports that packaged hard cheese saw the fastest growth in 2010/11, both in volume and current value terms. Improved distribution for packaged hard cheese through the collaboration of manufacturers with leading chained retailers, in addition to the development of modern retail formats was one of the main reasons for growth.

The market does have its constraints and challenges like differing consumption patterns across the market, logistical difficulties accessing such a large territory, etc. In 2011, dairy exports to Russia from Ireland were valued at just over EUR2 million (US$2.6 million) with cheddar accounting for a quarter of the total.