No income tax business opportunity for 7 years

our market

Target Market

Our target market is all the food & beverage industry. Target sales market is the Eurasian Economic Union, namely, grocery stores and retailers of Belarus, Russia, Kazakhstan, Armenia and Kyrgyzstan. The population of the EEU countries is 180 mln people. Total retail turnover of foodstuff in the EEU accounts for 310 b USD per year. This is one of the largest and most interesting markets for exporters.

Belarusian trade networks

Lately in Belarus continues the development of trading networks and increase in number of stores. The market volume accounts for 14.5 b USD.
Major Belarusian retailers are “Korona”, “Hippo”, “Sosedi”, “Evroopt”, “Vitalur”, “Almi”, “Rublevskiy”, “Dobronom”, “Belmarket”.

Russian trade networks

The retail sector grows strenuously in the regions of Russian Federation, mostly because of increasing number of network hyper- and supermarkets.
Major Russian retailers are “O’KEI”, “Pyaterochka”, “Perekrestok”, “Auchan”, “Lenta”, “Metro”, “Karusel”, “7 kontinent”.


The total volume of Kazakhstanian food market accounts for 30.6 b USD. Historically, the share of street markets is quite big – 40-50%. The other part of the turnover accounts for little shops near home. Modern super- and hypermarkets have only insignificant share in the market.

Armenian trade networks

Carrefour, Yerevan City, Nor Zovq, SAS


Hypermarket Globus

The survey shows that the number of retailers in Belarus and Russia is sufficient for development of the
conception of Food cluster.


Against the background of crisis, customers’ preferences shaping the demand are changing towards low-cost products. Today such products can be found in the stores under retailers’ private labels. Statistics of no name products sales for 2014 shows growth at 28%, these products are preferred by 48% of buyers.
Trading networks estimate development of their own private labels as a strategic direction for their further market expansion. Over the last year the retailers have been actively working with private labels and increasing the number of products under private labels. As an example, retailer “Diksi” has launched its private label “Pervym delom” only in 2014. The total share of “Pervym delom” in the retail turnover in 2014 accounted to 13% and forecast growth in 2015 is 20%.
Today the volume of private labels in the EEU countries is still insignificant. However, the number of private labels in retailers’ assortment is constantly growing. At the end of 2014, the share of private labels in food retail was 10.3% in sales volume and 5.3 b USD in terms of money with forecast growth up to 10 b USD.
STARTFRUKT estimates that in the following three years the share of private labels in retail will grow up to 20%. Many manufacturers with their own brands will be gradually forced out from the shelves in favor of private label goods.
In the world retail market the segment of private labels is steadily growing. On average, the share of private labels is about 16.5% in terms of money. Among the leaders are Switzerland with 45% of private labels, Spain and the UK, where the share of private labels is 40%.


Devaluation of Russian ruble has decreased domestic consumption, especially of imported goods, which prices has risen because of increased ruble exchange rate.


Change compared to the same period last year, %

The risk of working with private labels lies in the low margin and capital intensive business with low turnover period, where income will be generated by large production volume. The company will face commercial lending of trading networks for 45-90 days.
Interest rate on raised capital will form the main costs. Risk control will depend on company’s capability to borrow money and on the size of interest rate.

Geographical Segmentation

STARTFRUKT plans to export 65% of manufactured products. The major part of export will account for Russian Federation – 50%, remaining 15% - for other countries of Eurasian economic union.

Prospects of the project

STARTFRUKT positively evaluates the development of business in the food industry and the sales growth of Belarusian foodstuff in Russia. Under current circumstances, when access of foodstuff of EU origin to the Russian market is limited, the competition has diminished. In August 2014, Russia banned the supply of meat products, vegetables, fruits, seafood and chilled fish, milk and dairy products from the EU, Australia, Canada, Norway and the USA. As a result, a record of decreased foodstuff import by 40% in the Russian market was observed. Foreign manufacturers receive retail sales 10 b USD less per year because of the embargo.

How import of embargoed foodstuff to Russia has decreased, b usd

The embargo on foodstuff was not short-term. In 2015, Russia extended the sanctions in spite of expectations of European manufacturers about their cancellation. Actions aimed at suppressing of gray imports of European foodstuff through third countries have arisen.

Which import products from sanction list Russia has lost

STARTFRUKT considers that the cessation of EU foodstuff supply will be long term. Our company assesses that the reason is the geopolitical strategy of the Russian Federation for the next decade and one of the tasks is the maximum food independence. Undoubtedly, existing situation favors our Food cluster project and encourages its development as Belarus is situated in the area of food buffer between European countries and Russia. Statistics confirms our expectations. Belarusian food manufacturers exported to Russia 916.4 tons of goods in 5M2015 against 568.3 tons in 5M2014. Belarusian share in the food supply to Russia has increased from 13.5% to 21% in 2015.

Which countries-importers have won and lost from Russian food sanctions

countries from sanction list

countries out sanction list

STARTFRUKT highly estimates economic prospect of the Food cluster. Perhaps it is the only right decision for the development of small and medium manufacturers competing with multinational corporations.
In the absence of significant marketing costs owing to the initial level of production, lack of well-established distribution channels, it is impossible to receive fast sales without uniting in groups.
Forming a group of manufacturers with common market strategy STARTFRUKT can deliver through the communication channels the originality of the project and its members. Members will get access to established distribution channel that is certainly an important argument for the investment decision.
(1) Those, who understand the value of food and natural resources, such as water, in the whole world in a long-term period, can fully evaluate prospects and relevance of the project of Food cluster described by STARTFUKT.
(2) The union of countries (EEU) which was formed in opposition to the EU, has large market opportunities. Our company in the beginning of the development of this union already has a ready product for this market. This product is ready today for work and further development.