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The sale of larger packs has been a major trend in Russia during the pandemic. This is because, initially due to panic buying, consumers preferred larger pack size as it helps them stock products and offers lower per-unit price. Later, the popularity of e-commerce contributed to their growth as products were delivered at home, and consumers did not need to carry them. For example, Danone launched a 1.5-liter bottle of Prostokvashino milk in direct response to this demand shift while in personal care, Henkel Rus OOO launched Fa Cream shower gel in 2020 in a 750ml format and marketed it as being suitable for use by the whole family. Similar shifts towards larger pack sizes were observed in dog and cat food and in home care products like surface cleaners and laundry care.

In 2019, dairy packaging came under strict regulations as dairy products that do not contain milk fat substitutes had to be kept on different shelves. Therefore, retailers such as X5 Retail Group adapted the new requirements with price tags clarifying the milk fat substitute content situation. Manufacturers are also required to update the labels that clearly tell the consumers about the presence or absence of milk fat substitutes, as products containing these substitutes are believed to be unhealthy. As a result of this rule, many players changed their portfolio by providing more high-quality products in line with trends towards naturalness, while managing to keep prices affordable to most Russian consumers.

Russian Prime Minister Dmitry Medvedev signed the approved state strategy for the development of establishments that process, utilize, and recycle industrial waste by 2030. With the rising occurrences of illegal dumping of industrial waste in Russia, this strategy aims to halt the dumping of 182 types of recyclable waste and intends to convert the suitable waste to energy.

COVID-19 increased the popularity of online shopping in Russia and people are increasingly using this medium to order products. As a result, manufacturers are increasingly focusing on those packaging designs that can attract consumers' attention on device screens. Therefore, the use of such color combinations that can be highlighted on screens and help them stand out is coming to light and being adopted.

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• Beauty and Personal Care Packaging: This is the aggregation of packaging for baby care, bath & shower products, deodorants, hair care, color cosmetics, men's grooming products, oral hygiene, perfumes & fragrances, skincare, depilatories, and sun care. Black market sales and travel retail are excluded.
• Dog and Cat Food Packaging: This is the aggregation of dog and cat food packaging.
• Packaged Food Packaging: This is the aggregation of packaging for baby food, Bakery, canned/preserved beans, canned/preserved fish/seafood, canned/preserved fruit, canned/preserved meat and meat products, canned/preserved tomatoes, canned/preserved vegetables, other canned/preserved food, confectionery, chilled fish/seafood, chilled lunch kit, chilled processed meats, fresh cut fruits, dairy, dessert mixes, rice, frozen bakery, frozen desserts, frozen meat substitutes, frozen processed fish/seafood, frozen processed potatoes, frozen processed poultry, frozen processed red meat, frozen processed vegetables, other frozen processed food, ice cream, meal replacement, noodles, oils and fats, pasta, ready meals, sauces, dressings and condiments, snack bars, soup, spreads and sweet and savory snacks.
• Home Care Packaging: This is the aggregation of packaging for laundry care, dishwashing products, surface care, chlorine bleach, toilet care, polishes, air fresheners, and insecticides. 
• Beverages Packaging: Beverage packaging is the aggregation of alcoholic drinks packaging, hot drinks packaging, and soft drinks packaging.

• Owing to its light weight and ease with which it can be transported and stored, flexible packaging continued to dominate the dog and cat food market with a volume share of 85.9% in 2020 showing volume growth of 2.9%.
• Among flexible packaging, stand-up pouches were the leading pack type with a volume share of 91.6% and volume growth of 2.9% in 2020. This is because stand-up pouches can be easily molded into various pack designs and sizes, which helps customers choose from a variety of options as per their pet size and needs.

• Shopping from e-commerce websites is increasing as it helps the customers to reduce their outside trips and the product is delivered at their doorstep. As a result, many manufacturers are shifting from metal cans to plastic pouches as the latter is more suited for transportation. This resulted in a volume decline of metal beverage cans in dog and cat food by 1.1% in 2020.
• Folding cartons saw a strong increase in its sales, although from a small base, which showed a volume growth of 9.5% in cat food in 2020. This is because they help the brands to stand out from their competitors as plastic pouches dominate the segment. Folding cartons can be seen differently from the rest in terms of shape and can help attract the customers’ attention.

• The popularity of e-commerce websites is expected to continue over 2021-25 as it allows customers to easily compare various brands and their price points, thereby making third-party marketplaces such as Wildberries, Ozon, and Beru popular websites for pet food shopping. As a result, flexible packaging, which is most suited for transportation, will continue to show a strong volume CAGR of 2.5% over 2021-25.
• The trend of differentiating from the competitors using different pack types is expected to remain in Russia. As a result, folding cartons, which is a good material for secondary packaging, as it is environmentally friendly, is expected to show a volume CAGR of 12.1% over 2021-25.

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• With people choosing to stay home and restrictions on out-of-home dining, time spent in personal kitchens increased. This boosted the growth of kitchen cleaners and dishwashing products. Their main pack type, PET bottles did well in 2020, showing volume growth of 11.6% and 8.7% respectively. However new pack types such as plastic pouches also started to gain popularity as refill packs in dishwashing products. This helped plastic pouches record a volume growth of 8.2% in 2020.
• Flexible packaging is a highly successful pack type in Russia as its lower price helps manufacturers gain a competitive edge. As a result, Dow Packaging and Specialty Plastics announced a new licensee agreement in December 2020 with Interpolychem LLC, a leading packaging producer in the Russian flexible packaging market, intending to produce 200,000 flexible packaging units a month.

• Since the COVID-19 virus is perceived to transmit through interaction with infected surfaces, consumer demand for surface care products increased, showing a growth of 11.0% in 2020. The main pack type of surface cleaners, HDPE bottles, has a volume share of 86.2% and showed strong volume growth of 10.8% in 2020.
• Sales of home insecticides in Russia tend to depend on the weather conditions during the insects’ rearing period and spring 2020 in the country was very positive for the breeding of insects. Further, COVID-19 induced work from home enabled Russians to move and spend more time in rural areas away from the crowds of the cities. The use of home insecticides increased in rural areas thereby leading to the rise in demand for home insecticides in metal aerosol can formats such as 275ml and 400ml. The pack type has a volume share of over 50.1% and due to COVID-19 induced demand, registered a volume growth of 10.3% in 2020

• COVID-19 induced economic uncertainty is expected to persist, so manufacturers are likely to continue using flexible plastic as it helps drive the product cost down. As a result, flexible packaging, such as plastic pouches, is expected to show a volume CAGR of 3.3% in home care over 2021-25.
• Larger packs are expected to perform well over 2021-25 owing to their better price per unit. Therefore, larger packs such as 6kg and 9kg flexible plastic packs are expected to show a strong volume CAGR in home care products growing at 6.2% and 6.6% respectively over 2021-25.

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Mask regime and other COVID-19 restrictions canceled in Russia

• According to the World Health Organization (WHO), Russia had a total of 18,310,673 COVID-19 cases, 378,700 deaths, and 126,817 cases per million inhabitants as of May 2022.
• In Moscow, the capital, the mask-wearing regime was lifted on March 15, 2022. Further, according to the report published on the website of the Ministry of Economic Development of the Russian Federation on April 4, 2022, 29 Russian regions have completely lifted the restrictions imposed on SMEs due to the pandemic.
• The limit on the maximum number of visitors (2,000 persons) for sports, physical, cultural, entertainment, and other activities was lifted on May 26, 2022, according to an order issued by Saint Petersburg's Chief Sanitary Inspector.
• According to the WHO, on May 24, 2022, Russia’s total vaccinations reached 166,534,236. The rate of the population that has been fully vaccinated stands at 50.4 per 100 people.

The chart below shows Euromonitor International’s Recovery Index.

The quarterly reported Recovery Index is a composite index that provides a quick overview of economic and consumer activity. It keeps track of the latest quarterly economic/consumer data and forecasts in key economies to gauge when economic activity and consumer demand are likely to return to the pre-pandemic levels of 2019.

A score of 100 and over indicates a full recovery in which economic output, the labor market, and consumer spending all return to/exceed 2019 levels.
Detailed methodology is provided in the Appendix.

Quarterly Recovery Index and Related Indicators, Russia

Click here for more detailed information from Euromonitor on the overview of COVID-19 conditions in Russia

This graph shows our “most probable” and “worst case” estimate scenarios of how COVID-19 will impact the real GDP value in Russia. Our “most probable,” or Baseline scenario, has an estimated probability of 45-60% over a one-year horizon. Our “worst case,” or Pessimistic scenario, has an estimated probability of 13-23% over a one-year horizon. For more details, please refer to the detailed explanation of the COVID-19 scenarios in the Scenario Definitions section.

Please note that the forecasts will be adjusted every three months, according to the expected number of cases, recoveries, and deaths due to COVID-19 in this country, as well as shifting socioeconomic conditions (the most recent update was May 2022).

Baseline forecast refers to the “best case” COVID-19 scenario forecast that has an estimated probability of 45-60%.

C19 Pessimistic refers to the “worst case” COVID-19 scenario forecast that has an estimated probability of 13-23%.

Economic activity recovered slightly in 2021

• Due to the onset of the COVID-19 pandemic, in 2020, the Russian economy contracted for the first time since 2015. Private consumption and investment have been hampered by imposed cost-cutting measures and increased uncertainty about growth prospects. The country's economic damage was exacerbated by the collapse of oil prices and the country's oil production cuts under the OPEC+ agreement. However, in comparison to many other G20 economies, Russia's recession was comparatively moderate, supported by adopted economic stimulus measures.
• The National Plan for Economic Recovery, an accommodative monetary policy, an easing of containment measures, and a rebound in oil prices and demand helped the economy recover partially in 2021 with real GDP growing at 4.7%.
• Nonetheless, continuing geopolitical tensions, as well as sluggish productivity growth, pose threats to the economy's recovery. Annual real GDP growth is expected to be lower than the average for Eastern Europe over the long term, showing a projected massive decline in 2022.

Please note that the forecasts are adjusted every three months according to the expected number of cases, recoveries, and deaths due to COVID-19 in the country, as well as shifting socioeconomic conditions.

The graph below displays the adjusted forecasts of the percentage growth for the categories mentioned to highlight the impact of COVID-19 between our pre-COVID-19 estimates and the “most probable” (Baseline) forecast which has an estimated probability of 45-60%.

Baseline forecast refers to the “best case” COVID-19 scenario forecast that has an estimated probability of 65-75%.

Beer benefited from offering affordable price points

• Due to its affordability in a time of economic turmoil, standard lager remained by far the most popular type of beer in Russia, posting significant volume growth. As many Russians choose to downgrade to less expensive brands to save money, economy brands excelled. During the health crisis, players tried to keep price hikes to a minimum to drive volume sales. The top beer company, AB InBev Efes Group, was able to raise its overall volume share by maintaining a balance between its share and profitability.
• However, potential legislative changes may hurt the volume growth of beer in Russia. As part of its efforts to combat illegal sales and counterfeiting, the Russian Federation's government is proposing new labeling rules that would apply to beer and other alcoholic beverages. The measures are opposed by Russia's large breweries, which believe that the new labeling rules will increase production costs.

Please note that the forecasts are adjusted every three months according to the expected number of cases, recoveries, and deaths due to COVID-19 in the country, as well as shifting socioeconomic conditions.

This graph shows our “most probable” and “worst case” estimate scenarios of how COVID-19 will impact the percentage growth for the sectors mentioned in Russia. Our “most probable,” or Baseline scenario, has an estimated probability of 45-60% over a one-year horizon. Our “worst case,” or Pessimistic scenario, has an estimated probability of 13-23% over a one-year horizon.

Baseline forecast refers to the “best case” COVID-19 scenario forecast that has an estimated probability of 45-60%.

C19 Pessimistic refers to the “worst case” COVID-19 scenario forecast that has an estimated probability of 13-23%.

The rising trend of home cooking pushes higher demand for staple and basic cooking products

• Products essential to home cooking have been in high demand, including edible oils, sauces, dressings, and condiments as well as staple foods. According to Euromonitor International’s Baseline scenario forecasts, cooking ingredients enjoyed 11.7% growth, while staple foods grew by 7.6% over 2019-2022. Russian consumers are becoming more demanding of the quality and safety of packaged food products, as well as seeking new experiences from food; as such, packaged cooking ingredients provide convenient value for money and easy solutions to consumers who due to economic hardship remain keen on home cooking.

The following tables display adjusted market size for 2021, market size forecasts for 2022, and the percentage difference between the February 2022 and June 2022 estimates for the year 2022.

Please note that for the current quarterly update, the following table covers beauty and personal care packaging and home care packaging industries only.

Rising environmental awareness fueling development in Russia’s packaging industry

• Over the review period, the ‘green’ trend gained traction in Russia, with increased local interest in environmental friendliness. As a result, there has been a growing focus on the sustainability of product packaging in the beauty and personal care industry, with firms increasing their investment in environmentally-friendly, recyclable packaging. Lumene offers packaging that is made of 50% recyclable plastic. Kalina Concern ensures that all its brands sold in cartons are labeled to indicate that the material was created sustainably using certified ecologically responsible resources. Procter & Gamble is introducing new packaging for its Head & Shoulders shampoo in Russia, made up of 20% plastic gathered on Atlantic coast beaches and 100% recyclable.
• Sustainability trends will also influence metal beverage cans and paper-based pack types, as well as boost the adoption of recycled PET, which is expected to see increased use. In the soft drinks industry, major brands such as Coca-Cola and PepsiCo can be seen refocusing their manufacturing from regular PET bottles to recyclable variants. This is of great importance for Russia, which, in January 2020, showed an increase of 9% year on year in PET consumption.

• Beauty and Personal Care Packaging: This is the aggregation of packaging for baby care, bath & shower products, deodorants, hair care, color cosmetics, men's grooming products, oral hygiene, perfumes & fragrances, skin care, depilatories and sun care. Black market sales and travel retail are excluded.
• Dog and Cat Food Packaging: This is the aggregation of dog and cat food packaging.
• Packaged Food Packaging: This is the aggregation of packaging for baby food, Bakery, canned/preserved beans, canned/preserved fish/seafood, canned/preserved fruit, canned/preserved meat and meat products, canned/preserved tomatoes, canned/preserved vegetables, other canned/preserved food, confectionery, chilled fish/seafood, chilled lunch kit, chilled processed meats, fresh cut fruits, dairy, dessert mixes, rice, frozen bakery, frozen desserts, frozen meat substitutes, frozen processed fish/seafood, frozen processed potatoes, frozen processed poultry, frozen processed red meat, frozen processed vegetables, other frozen processed food, ice cream, meal replacement, noodles, oils and fats, pasta, ready meals, sauces, dressings and condiments, snack bars, soup, spreads and sweet and savory snacks.
• Home care Packaging: This is the aggregation of packaging for laundry care, dishwashing products, surface care, chlorine bleach, toilet care, polishes, air fresheners and insecticides.
• Beverages Packaging: Beverage packaging is the aggregation of alcoholic drinks packaging, hot drinks packaging and soft drinks packaging.

Recover Index Methodology

Euromonitor International’s Recovery Index is a composite index that provides a quick overview of economic and consumer activity and helps businesses predict recovery in consumer demand in 48 major economies. The index takes into consideration total GDP and factors that determine consumer spending - employment, consumer spending, retail sales, and consumer confidence. Index scores measure the change relative to the average per quarter for 2019.