Own production
Magnit is the only Russian retailer that operates its own food production facilities, which manufacture private label items. These are high-quality food products developed based on customer preferences and sold at affordable prices.
Our approach to management
Magnit consistently increases the share of own production and private labels in its sales. This approach helps us progress towards the strategic goal of enhancing the sustainability of our supply chain: we remain confident about the high quality of our products and compliance with all the applicable production requirements and standards.
We rely on the principles of environmental and social responsibility to manage the sustainability of our food production facilities and industrial agriculture assets. The agricultural practices that we employ help increase yields, while also preserving ecosystems.
Material topics
- Ensuring local and regional food security
- Building sustainable food production chains
- Stability of regional food markets
- Maintaining the assortment of popular product categories and pursuing import substitution
Key documents
- Own Brand Packaging Policy
- Quality, Food & Non-Food Safety Policy
- Government product quality assurance and product labelling requirements (GOST)
- Russian Federation Food Safety Doctrine
- National and international standards, guidelines and recommendations for sustainable production, food systems, and agriculture
Priority UN SDGs
2022 highlights
- Launch of an in-house coffee roasting and packaging facility in Tver with a capacity of 800 tonnes (My Price, Magnit and Gusto di Roma brands)
- Recognition of Magnit’s and DIXY’s private labels at the 2022 International Quality Assurance awards (44 gold medals, 22 silver medals, 12 quality excellence certificates in various categories)
- Recognition of Magnit’s private labels as some of the best at the 2022 Private Label Awards
- Growing popularity of Magnit’s private label diapers (Casper and NaNi), which outperformed the Pampers brand
- Start of implementing the Voluntary Sustainable Packaging Standard jointly with other private label producers
- Start of promoting exclusive in-house pasta brands: launch of publicity campaigns to advertise private labels (Gusto di Roma pasta and NaNi diapers) on TV and in the digital media
- Launch of a new mushroom growing centre in the Krasnodar territory with an annual capacity of 1,300 tonnes
Governance structure
We offer our customers the best quality to price ratio thanks to our own production capabilities. Our food processing assets supply store shelves with confectionery, pasta, pastry, and frozen ready-to-cook products, and other food categories.
In the reporting year, we continued to reduce the dependency of Magnit’s own production sites on imports (raw materials, ingredients, packaging). The share of foreign ingredients went down by 30%, while the share of ingredients produced from imported materials decreased by 37%.
New opportunities
We continue to develop our own production facilities to offer our customers best value for money.
In October 2022, Magnit launched hi-tech coffee roasting and packaging operations (800 tonnes per year) at its facility in Tver. Coffee feedstock comes from Brazil and Vietnam, the world’s largest suppliers. For whole bean coffee, we use a hybrid roasting technology, which combines the benefits of conduction and convection techniques and helps preserve the quality of beans and bring out their taste to the fullest. For ground coffee, cold grinding is used, where beans are not heated and preserve their original aroma and flavour.
Next year we will start selling whole bean and ground coffee under the My Price, Magnit and Gusto di Roma brands. By leveraging in-house production capacities, we will be able to achieve a 10% lower price vs peer products in the low-price segment and a 20% lower price in the medium+ price segment.
