Nestle's difficulties in Russia

The lack of human resources and adequate infrastructure are the company's main obstacles, says Bernard Meunier, CEO of Nestle Russia.

The
development of the Russian market for healthy food, as well as the
increase of trade within the CIS due to better living standards are
viewed as key drivers for Nestle's future growth in the country.

Nestle entered Russia 15 years ago and
was quick to make acquisitions. The Swiss food giant also invested in
its local manufacturing and was not negatively impacted by Russia's
default on its debt 10 years ago. Now the firm manufactures 90% of
its products sold in the Russian market locally.

This achievement has enabled Nestle to
remain competitive in the country. In 2007, Nestle Russia recorded
annual sales of around 2 billion Swiss francs (USD 1.6 billion).

Russia’s food sector is also
characterised by a mix of regional and international players on the
market. And, thanks to a long tradition of food manufacturing in
Russia, consumers in certain segments prefer Russian products.
Although domestic producers have a better understanding of local
tastes, Nestle also tries to localise its recipes and formulations.