Krasnodar, Russia (July 3, 2023): Magnit, Russia's largest retailer in terms of the number of stores, is expanding the geography of its farmed products aggregator, which was piloted in the Tula region in late 2022. The Company plans to expand the pilot to cover farmers fr om neighboring regions: Kaluga, Ryazan, Oryol, Voronezh, Lipetsk, and Moscow.

The target model of the aggregator being developed by Magnit covers centralized procurement and supply of farmed products, infrastructure for their storage and processing (washing, portioning, packaging), as well as specialized services: consulting for farmers regarding production and sales, assistance in obtaining necessary documentation and labeling, provision of analytical data, training, co-financing for purchases of raw and packaging materials, agricultural insurance, etc.

Currently, Magnit cooperates with more than 30 farmers in the Tula region under its aggregator model. The products are supplied to 185 Magnit stores operating in the region. The assortment includes more than one hundred items in such categories as dairy products and cheese, eggs, meat gastronomy, poultry, fish, frozen products, as well as fresh fruits and vegetables. The volume of purchases of farmed products made through the aggregator since the beginning of 2023 amounted to almost 5 thousand tonnes and reached RUB million rubles (the main bulk of volumes are fruits and vegetables). In the coming months, as new crops arrive, the Company expects a significant increase in monthly turnover.

Connecting farmers from nearby regions to the Tula aggregator will significantly expand the assortment of products and the geography of supplies. During the first stage, the products will be delivered to Magnit stores in the Tula region, and in the future, to retail outlets outside the region as well. Suppliers from other regions will have access to the same terms and services available to Tula farmers. Magnit has already started negotiations with potential partners.

Evgeny Sluchevsky, Director of Agricultural and Production Complex in Magnit:

“The first results of the aggregator that we launched in the Tula region showed the effectiveness of and demand for this model of cooperation with farmers, so we decided to expand the project. The aggregator is not only a stable sales channel for farmers, but also a solution to many problems that small farms often face due to lack of resources. We take care of logistics, storage, packaging of products, provide additional services to farmers, and accompany them throughout the entire chain ‘from field to shelf.’ By strengthening its cooperation with farmers, Magnit expands its assortment with unique locally made products that are valued so much by customers. We are also ready to work with those who are just planning to become farmers, and we will be glad to help bring their ideas to life.”

Magnit is actively developing cooperation with farmers and local suppliers. In 2014, the Company created a farmer's market format in its stores. Special areas with farmed products have been set up in most of Magnit’s supermarkets and hypermarkets. For small agricultural producers, a simplified delivery agreement was developed, which has already been used by dozens of Magnit’s partners all over Russia. In addition to that, since 2016, Magnit has been working with domestic agricultural producers, including farms, under the agricultural contracting system. Agricultural contracts are long-term contracts for supply of future harvests with fixed volumes and possibility of advance payment. For the convenience of farmers who want to put their products on the shelves of Magnit stores, the Company launched a website wh ere they can learn about the features of agricultural contracting and the services that the Company provides under this mechanism, as well as to apply for a contract.

Magnit Expands Geography of Its Farmed Products Aggregator