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GOURMET NEWS NOVEMBER 2014 www.gourmetnews.com GENERAL NEWS 5 Russian Import Continued from PAGE 1 original target. Shortly thereafter, the Euro- pean Commission expanded its support, pledging to help European dairy farmers defer the costs of storing surplus butter, cheese and milk powder. On September 30, the European Commission stated that it would increase its support to farmers by an additional 165 million euros. It is as yet unclear how deeply the Russian import ban will negatively impact U.S. farm- ers and food producers. In 2013, U.S. exports of agricultural products to Russia totaled $1.3 billion. Key U.S. exports to Russia include poultry ($310 million), pork ($18 million), tree nuts ($172 million), fruit ($34 million), seafood ($83 million) and prepared foods ($84 million). U.S. producers of these com- modities are now being forced to seek out new markets for their products. The California almond industry has long relied on Russia as a key trading partner, and thus this is one group of U.S. producers who are bracing for an economic hit this year. "Year-to-date, shipments to Russia represent about 3 percent of total California almond exports. Russian imports of almonds from the U.S. in calendar 2013 were approxi- mately 23,500 tons, with a value of $126 million," said Julie Adams, Vice President of the Almond Board of California. Although Adams regrets the negative im- pact that California almond producers may face as a result of their inability to export products to Russia, she is equally concerned that Russian consumers will no longer have access to a product they love to eat. "The sanctions are particularly disruptive to con- sumers and manufacturers in Russia, who recognize the nutritional benefits of al- monds," she said. "We look forward to working again with our customers in Russia, once the market is reopened. The Almond Board will continue to monitor the situation, working closely with the U.S. government." The U.S. poultry industry is also expected to be impacted by the ban on exports to Rus- sia, although industry insiders anticipate that impact to be relatively minimal. "At one point we were exporting 42 percent of our exports to Russia. That was in 1997. That has declined through the years," said Jim Sumner, President of USA Poultry & Egg Export Council. "In 2013, we exported 7.5 percent of our exports to Russia. Fortu- nately, this situation didn't happen ten or 15 years ago. It would have been catastrophic for our industry. Today it is unfortunate. We otism. "People who live somewhere in differ- ent countries, of course they remember taste, how the food was when they were young or something. They remember this and they want to eat. They can live without Russian food but they have some kind of fondness, some kind of remembrance," he said. Although he has not yet observed any back- lash by American consumers against his store's largely Russian product selection, one thing Tsiskaridze has observed among his store's Eastern European clientele is the occa- sional rejection of Russian products by Ukrainian nationals and vice versa. For Tsiskaridze, an immigrant from the former So- viet republic of Georgia, this reminds him of the hostility he experienced from Russian shoppers when Russia invaded Georgia in 2008. He recounts a recent instance of a Ukrainian woman rejecting an item at his store after realizing it was produced in Russia. "One woman was Ukrainian, and we had the same product from two different coun- tries – one from Ukraine and one from Rus- sia. The Ukrainian was a little more expensive than the Russian," he said, "She said, 'I don't want to buy Russian products.' I don't think this was smart." Still, although Russian Gourmet, Marky's and other Russian specialty retailers con- tinue to weather whatever storm of anti- Russian sentiment currently exists in this country with relative ease, as the global ten- sions between the two countries continue to build, there is no certainty that a larger pub- lic backlash will not eventually emerge. The potential threat to purveyors of Russian goods was made apparent during prepara- tions for the 2014 Winter Olympic Games in Sochi when several gay rights organizations urged a boycott of Stolichnaya vodka and other Russian-produced goods in light of the country's alleged human rights violations. In the meantime, however, the added ex- posure Russia is receiving on the global stage may actually be a positive thing for those selling Eastern European foods in this country. This has been the case for Russian Gourmet, where profits are actually up in re- cent months. Tsiskaridze says that his stores have become an important meeting place for immigrants coming to share news of their homeland and debate the ongoing conflict in Ukraine. "People from Soviet Union, they are very political people. They might not un- derstand, but they like to talk," he said. "In my store, I have a Russian kitchen. The sales person is Ukrainian. I am Georgian. Yester- day we talked for two hours about this situ- ation, going back in history. We like to talk. What else can we do?" GN don't want to lose a market anywhere, but thanks to the diversification of our industry it's but a blip on the radar." "We're in a pretty tight market situation here in the United States – the highest beef prices we've ever seen, higher pork prices," Sumner continued. "The timing really couldn't have been better for our industry if it was going to happen than now." Miami-based Russian specialty product superstore Marky's does a brisk business ex- porting U.S.-produced Eastern European spe- cialty goods, including caviar, seafood, foie gras, truffles, mushrooms, cheeses, oils and vinegars to Russia. "In relation to the market and our business as it relates to Russia, we do not function as a Russian business," said Chris Hlubb, President and COO of Marky's Group Inc. "However, we do export from the U.S. to Russia and Ukraine and ex-Soviet re- publics and have been adversely affected from our ability to continue to export certain prod- ucts due to recent bans from the Russian side." Still, in this case as well, the impact may be felt more severely by Russian con- sumers who now have diminished access to specialty goods and are forced to pay higher prices for those that are available. The positive news for Russian consumers is that as companies in North America, Eu- rope and Australia are being inhibited from exporting goods to their country, producers in other countries are stepping in to fill the void. Brazil, Argentina, Turkey, Egypt, China and Belarus are just a few of the countries stepping in to provide much-needed agricul- tural goods to Russian consumers. The or- ganizers of Russia's largest food trade show, WorldFood Moscow, held in September, were thrilled by the increased global turnout at this year's show, arguing that the food bans have been responsible for bringing companies from new countries to the show and the Russian market. "The changes in Russia's food regulations has meant that interest from non-EU coun- tries entering this market has increased, and subsequently we received an influx of last minute bookings from those countries that are not affected by the ban," said Tony Hig- ginson, Sales Director for WorldFood Moscow. "We are also pleased to confirm that Russia's ban had little effect on the event's exhibitor list." American consumers respond to Russian import ban As the United States gets further embroiled in the ongoing conflict in Ukraine, anti- American sentiment is growing among many in Russia. Some Russian consumers are turning away from American staples like McDonald's (12 locations were recently closed by Russian officials over dubious food safety concerns) and Kentucky bourbon (health officials have similarly threatened to ban the potable). And American expats in the country report experiencing hostility from Russian nationals. Anti-Russian sentiment in the United States is also on the rise. According to a re- cent Gallup poll, 60 percent of Americans surveyed stated that they view Russia unfa- vorably – the highest number since 2005 and a 16 percent spike since 2012. With Ameri- cans' perception of Russia turning sour, U.S. retailers and food companies specializing in Eastern European products are being forced to confront the possibility of a backlash. Unlike what happened in the early years of the Iraq War when anti-French sentiment in the United States compelled some to dump bottles of French wine and members of Con- gress to chow down on "freedom fries," the good news for Russian specialty companies today is that they have yet to experience a similar backlash from American consumers as a result of ongoing global tensions. How- ever, this may have less to do with Americans' devotion to Russian food or indifference to global politics and more to do with the fact that the market for European specialty goods in this country is made up almost entirely of Eastern European immigrants and their de- scendants – a group not likely to ditch their affinity for these items. "We have not seen any such public back- lash, as customers for Russian products tend to be uniquely Russian or from Eastern Eu- rope," said Hlubb of the bustling business Marky's continues to do both online and at its retail space in Miami. "And due to limited cuisine expansion into Europe and the U.S., we see little to no effect from our customers." "Most of our customers are Russian, Lithuanian, Belarusian, Georgian, Bulgarian or from other Eastern European countries," said Zourab Tsiskaridze President of Russian Gourmet, a chain of five Russian specialty stores in the suburbs of Washington, D.C. "Of course, we have American customers too, but it's not a majority. It's a minority." According to Tsiskaridze, Russian expatri- ates and others with Eastern European her- itage continue to flock to his store, seeking out the products that remind them of their families and their youth. The most popular items people pick up at Russian Gourmet in- clude sausages, cheeses, caviar, smoked fish, dairy products and prepared foods. This clientele is not likely to abandon these prod- ucts simply out of a sense of American patri- New Mexico Chile Association Launches Certification Program to Protect State's Signature Crop from Lesser Quality Capsicum Counterfeits New Mexico's chile farmers and processors are joining an effort to protect their peppers from counterfeiters looking to profit from the state's famous chile reputation. On August 19, New Mexico Governor Susana Martinez announced the New Mex- ico Certified Chile™ program. The pro- gram will allow New Mexico Certified Chiles to join other well-known products such as Vidalia Onions™ and 100 Percent Pure Florida™ as certification programs supporting signature state or regional crops. "Red or green is a question New Mexi- cans answer every day at breakfast, lunch or dinner," said Martinez. "Chile is a way of life in our state, ingrained in our culture and our economy. It supports more than 4,000 jobs and contributes more than $400 million every year to New Mexico's econ- omy. The one question no one should ever have to ask is, 'Is this chile really New Mex- ican?' This program further cements the status of New Mexico Chile on par with other nationally-renowned state and re- gional products." The New Mexico Chile Advertising Act of 2011 made it illegal to advertise any product as New Mexico Chile unless grown in the state. The New Mexico Certified Chile program builds on this legislation, giving consumers confidence that they are using the finest New Mexico Chile. The program will allow the New Mexico Certi- fied Chile mark to be placed on products to assure consumers that their chile is au- thentic. "We are confident we can continue to ex- pand markets for New Mexico Chile as consumers understand there is no imitation of the original," said Dino Cervantes, Pres- ident of the New Mexico Chile Association. The NMCA's mission is to reinstate New Mexico as the world leader in chile produc- tion, processing and innovation, ensuring the viability and prosperity of the industry. Bueno Foods, Penn Farms and John Brooks Supermart are the first in their industries to sign up for the program. Consumers can find other growers, products, retailers and restaurants using New Mexico Certified Chile at www.getnmchile.com. GN

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