About 23% of Russians are increasingly likely to purchase products from locally produced brands, while 68% prefer domestic brands because they want to support local companies. This conclusion is based on his results. research It was made last year by NPF Otkrytie experts. A similar analysis just now spent payment service Skrepka. The results show that in Russia, 78% of citizens prefer to buy food from local producers.
At the same time, 52% of respondents prefer regional producers due to the high quality of their products and the natural raw materials from which they are prepared. The low price of local goods attracts the attention of 23% of respondents. 25% of buyers also choose the “their” option to support a local manufacturer.
Solid advantages
The trend towards food patriotism has been around for a long time, and the “feds” have previously turned their attention to local suppliers. But the current economic and geopolitical situation increases the chances for small regional businesses to cooperate with large chains. How this helps customers save money and how small businesses benefit from cooperation with large retail was told to socialbites.ca by Irina Borisenko, the owner of a family business in Kuban, and cooperation with X5 Group began completely by chance. He started growing strawberries in 2018.
“At first we tried without establishing a legal entity, and as planned, in 2020, when the business was already established, we registered an individual entrepreneur specifically to work with stores,” says the entrepreneur.
During the negotiations in Perm, he accidentally went to Perekrestok to look at the fruits. There I met the manager of the store, an involuntary conversation started, during which he became interested in the fruit.
“The manager of the supermarket gave us the phone number of the manager who is responsible for all supplier-related processes in Yekaterinburg. After spending a few hours on the train, we are already there. “At first we deliberately did not go to “At first they were supposed to work only in the distribution center in Yekaterinburg (distribution center – socialbites.ca note). But the manager suggested that we work for all regional distribution centers at the same time, said let’s try if the capacity is enough. That’s where we start.”
According to Irina, the main conditions for cooperation with X5 are, first of all, the quality of the goods and the regularity of deliveries.
At first it was not easy, but the entrepreneur managed to develop a clear delivery schedule and ensure the appropriate quality of the checked goods at the output.
“During the busy season, it is often a huge task for us to develop the entire strategy for harvesting, packaging and cooling to ensure that the fruit is of the quality that the chain wants to see. For us, this was a goal that we set ourselves and are moving towards. How exactly does such a large company to learn how to work,” says Irina.
For the X5, a big plus was that the fruit went directly from the field to the warehouse shelves. That is, all parts of wholesale markets have been removed: transfers, stressful temperature changes, because strawberries are a very delicate berry, especially domestic ones. Perekrestok was working mostly with packaged products, but Irina managed to persuade the chain to focus on mainly packaged products. Buyers appreciated this; sales increased.
The retailer itself is also helping entrepreneurs. Now the chain invites them to expand production volumes by changing the variety of fruit crops. In addition to strawberries, the company is also interested in blueberries and raspberries and is even ready to invest in them.
“We have never had anything like this. This is great support. And of course X5 expanded our borders, our supplies went further. We already supply federal distribution centers: Moscow and St. Petersburg, we started working not only with Perekrestok, but also with Pyaterochka ” says Irina.
The entrepreneur states that cooperation with X5 is a complete plus: “First of all, peace and stability. The most important thing is that we trust the future and that our business has a future. This is a certain situation; “We are a manufacturer working with such large and serious networks.”
Raspberry
The target customer of the X5 is the Novaya Yagoda company, which also operates under the ChistoYagoda brand. This is an agricultural enterprise located on nine hectares of the Priozersky district of the Leningrad region. In addition to growing raspberries using tunnel technology since 2018, the company has also been growing small amounts of strawberries and blackberries.
The company signed the first contract with the X5 in 2019, and deliveries started in 2020.
“Before this, we were working through intermediaries, that is, companies that had a direct agreement with the retailer. But this was not profitable either for us or for the network, because there is an additional day for overload,” Novaya Yagoda general director Dmitry Litovsky told socialbites.ca. — We supply fresh produce, that is, as a rule, produce picked today. Everything is packed at night and in the morning, St. It reaches the stores of the Perekrestok and Pyaterochka chains in St. Petersburg.”
Dmitry shares that the company was audited at the very beginning of the cooperation.
“We passed this, we improved production. “We no longer work under our own brand, but under our own Perekrestok brand, so we do not spend resources on promotion,” says the company president. — X5 is a difficult partner, high requirements for product quality, paperwork requirements, electronic document management are required. For our small company, even a simple operation requires some effort. What can we say about compliance with standards? “But I must say that X5 has been very loyal and understanding to us as a small Russian manufacturer.”
After starting to work with Perekrestok, the company increased its fruit growing area.
Currently trying to expand the matrix. If they can grow quality blackberries this year, they will offer them to the chain. And the high requirements that the federal partner imposes on the supplier provide the enterprise with greater economic efficiency.
“This provides synergies in terms of product quality, the ability to better care for plantings and provide better quality products. Ultimately, through joint efforts, we offer our customers a valuable product,” says Dmitry Litovsky.
healthy trend
The proximity of production to the buyer reduces the logistics burden and allows maintaining the high quality of the product. In this case, cooperation between small businesses and large retail is the key to market stability.
The latest statistics, which also reflect the trend towards local producers, published X5 Group. The company, which manages the Pyaterochka, Perekrestok and Chizhik retail chains, started cooperation with 1,008 Russian suppliers in 2023. Additionally, 812 of them are individual entrepreneurs, micro-enterprises and small businesses.
In total, at the end of last year, there were products of more than 7 thousand suppliers on the shelves of X5 retail chains, while the share of SMEs was 54 percent.
The leader in the number of new suppliers at the end of 2023 was the Central Federal District, where X5 started cooperation with 389 partners, including 22 individual entrepreneurs, 94 small and 228 microenterprises.
To expand its small pool of local suppliers, X5 has launched 43 “Farm Islands” in a “store-within-a-store” format in 23 regions. This is a joint project with the SME Company, created to help small agricultural businesses expand their opportunities to sell their products. As a result, small farmers’ products appear on separate shelves, while producers agree that their products do not compete with each other, but complement each other, offering customers the widest possible range.
This year, X5 will continue to develop this project and other areas to support small businesses. These include agricultural contracts, agricultural foragers and even the “Farmer Academy” training project. In the end, everyone wins: the business gets a convenient and stable channel for selling products, consumers have the opportunity to purchase local brands at an attractive price, and the retailer itself expands the range of quality and therefore customer loyalty.