In the small town of Noginsk, 40 kilometers outside Moscow, customers are lined up in the middle of the local O’key mall. At the end of the line there is fresh Norwegian salmon piled up on a large counter, ready for the Russian dinner tables. Salmon is no longer a luxurious choice for rich business people. It has become a normal dish for all kinds of Russians.
"In the weekends there can be a line of buyers stretching far through the store", says General Director Dmitry Dangauer from Russian Sea.
His company provides the O’key store with numerous fish products, and sell fresh fish as well as processed. The huge mall has an endless line of store shelves with a wide assortment of groceries. In the center of the store, just in front of the cash registers where you normally would find chocolate and other snacks, you find the fish counter bulging with fresh salmon.
Some years ago the area for salmon products was just a percentage of what you see today. With the queue of buyers increasing every week, the situation is totally changed. The peak is around Christmas, when large trucks loaded with several hundred tons of salmon are driving almost through the night to be able to meet the demands for fresh salmon in all the shopping malls of Moscow
"When I started exporting fish to Russia I said that Russia will soon be Norway’s number one market for salmon. Everybody laughed at me back then. They didn’t believe that salmon would ever become an important market for Norwegian salmon. Nobody laughs of such comments today", says Svein Ruud in Troika Seafood.
The fact is that in 2011 Russia moved in top of the list for Norwegian fish export, passing France for the first time. Salmon export to Russia is the main reason for this enormous increase on the Russian market. The economic situation for most Russians has of course improved, but that does not explain entirely the large growth in salmon sales.
"The most important reason is that salmon products has had a favorable price development compared with other food products over the last years, enabling almost all Russians to afford a salmon meal several times a week", says Ruud.
63 000 tons
Ruud has been working with fish export in many years and seen the ups and downs of Norwegian fish export to Russia. His company Troika Seafood handles fish export for the Norwegian fish producers Villa Organic. Nowadays things are running more smoothly than ever and export numbers are beyond all expectations.
A lot of Villa Organics production activity is in northern Norway, so last week Ruud and Villa Organic’s CEO, Vidar Skaar, showed County Governor of Finnmark, Runar Sjåstad, how sales of fish products from Finnmark are increasing in Russia.
"The Russian market accounts for about 20 percent of our production today, and it is increasing. We are planning to growth production in Finnmark so the Russian market will have increasing importance for us. Our location near the border to Russia will also in the future have an increasing strategic and operational importance. So in total it will be natural for us to increase our focus and our sales to the Russian market in the years to come", says Skaar.
Numbers presented by Norwegian Seafood Council show that while most Norwegian export markets for salmon has had a decline, the Russian market has a totally different development. In the first six months of 2012 Norway exported 63 000 tons of salmon to the Russian market. That is an increase of 25 000 tons of salmon compared to last year, increasing the volume with incredible 67 percent. This makes Russia the second largest market for Norwegian salmon. Only France import more.
For Dangauer and Russian Sea the biggest obstacle is to provide their market with as fresh fish as possible. That’s where Norwegian salmon has a huge advantage. Especially for Villa Organic’s salmon produced in northern Norway.
"We send our fish from Kirkenes by truck and then by airplane from Murmansk airport to St. Petersburg and Moscow, saving two days transport time even compared to southern Norway. This gives us a competitive advantage", says Ruud.
Located in the Norwegian border town of Kirkenes, only 10 minutes drive from the Russian border, the company has a unique location for the Russian market.
Russian Sea’s factory in Noginsk produces more than 150 different products of fish for the consumers. Salmon is of course only one out of many fish products, but the percentage of the total is steadily increasing. At the O’key mall the variety of various salmon products fills an entire wall.
"The potential for salmon sales is far bigger then what we see today. There are a lot more Russians that want to buy fish, so our focus is how to get more salmon out to the consumers", says Dangauer.
Dangauer has more than 650 workers at his factory, and increasing. As we are leaving the factory tour Dangauer points out the window at an undeveloped area. In near future it will be developed to improve distribution of products. For people working with fish in the largest country in the world, it’s all about the speed of distribution.
"Russian consumers want fresh fish, but fresh fish which is more than five days old is no good anymore. Working in a large country like Russia we are always working against the clock."
That’s why the Villa Organic’s short transport distance from northern Norway has become so important for their production.
Russian Sea produces some of their fish products themselves, but for Salmon it is all import at present stage. However, they are about to establish a fish farm on the north of Kola Peninsula in the small town of Vidyaevo.
"This will only be a supplement to the fish from Norway. We can never produce the quantity needed for the Russian market", says Dangauer
Norway's unique experience in the fish farming industry is something Dangauer would like to learn form and use to develop their production. Therefore he see the need for a close cooperation with his Norwegian partners.
"The people in the north are the same, the nature in the north is the same and our goal of providing more fish to the market is the same, so we have to cooperate", says Dangauer.
Svein Ruud and County Governor Runar Sjåstad nod their heads to his remark. Cooperation across the border will benefit all partners