Ice Fili
ICE FILI CASE 1) Is Russia’s ice cream industry attractive?
Yes, it is. Russia is one of the largest nations in the world and, as such, holds promising market share potential due to its sheer size in geographic, demographic and economic terms.
Russians love ice cream, even in the subzero winter climate. Despite decreased market share due to recent increased consumption of beer, soda and confectionary products; the Russian ice cream industry is attractive due to its lower entry barriers, competitiveness and profitability.
As the case-study indicates, in the aftermath of the 1998 Russian economic crisis, rivalry in the Russian ice cream industry doubled, from 150 in 1998 to 300 companies by 2002.
The intense rivalry can be explained by the fact that profit ratio for ice-cream production is about 15 to 20 %, a margin that is “considered high by Russian food industry standards” (p.5). In addition, domestic Russian ice cream is one the cheapest in the world to produce and buy, which in part explains the significant rise of highly competitive regional ice cream producers, who nowadays account for about 30% of the domestic Russian market (p.11).
Foreign companies such as Nestle and Baskin & Robbins have been able to thrive in the Russian ice-cream market by producing, distributing and selling their ice cream products locally through Cafes and Kiosks. Moscow-based producers such as Ice-Fili have mainly focused on sales Kiosks and Supermarkets. Regional producers dominate the rural and more distant areas of Russia, such as Siberia. However, as the piece indicates, they have been attempting to compete in the larger metropolitan areas as well.
The key word is “open market.” For years, Russian ice cream was produced and consumed in a communist regime. To understand that is to know that the population had limited access and flexibility to the ice cream it consumed. When the dissolution of the Soviet Union came it unleashed a large desire
Yes, it is. Russia is one of the largest nations in the world and, as such, holds promising market share potential due to its sheer size in geographic, demographic and economic terms.
Russians love ice cream, even in the subzero winter climate. Despite decreased market share due to recent increased consumption of beer, soda and confectionary products; the Russian ice cream industry is attractive due to its lower entry barriers, competitiveness and profitability.
As the case-study indicates, in the aftermath of the 1998 Russian economic crisis, rivalry in the Russian ice cream industry doubled, from 150 in 1998 to 300 companies by 2002.
The intense rivalry can be explained by the fact that profit ratio for ice-cream production is about 15 to 20 %, a margin that is “considered high by Russian food industry standards” (p.5). In addition, domestic Russian ice cream is one the cheapest in the world to produce and buy, which in part explains the significant rise of highly competitive regional ice cream producers, who nowadays account for about 30% of the domestic Russian market (p.11).
Foreign companies such as Nestle and Baskin & Robbins have been able to thrive in the Russian ice-cream market by producing, distributing and selling their ice cream products locally through Cafes and Kiosks. Moscow-based producers such as Ice-Fili have mainly focused on sales Kiosks and Supermarkets. Regional producers dominate the rural and more distant areas of Russia, such as Siberia. However, as the piece indicates, they have been attempting to compete in the larger metropolitan areas as well.
The key word is “open market.” For years, Russian ice cream was produced and consumed in a communist regime. To understand that is to know that the population had limited access and flexibility to the ice cream it consumed. When the dissolution of the Soviet Union came it unleashed a large desire