Cheese has been the hardest product to replace of all the delicacies that disappeared from Russians shop shelves after the Kremlin imposed tit-for-tat sanctions on the import of European Union (EU) agricultural products in 2014.

The upshot has been to spur a wave of investment into domestic production of cheese that started with the now famous “Siberian camembert” two years ago by a family living in a village in the Altai region. Another small Russian firm that started producing quality goat cheese was founded using the suitablly patriotic name Koza Nostra, a play on words drawing on the Italian nickname for the mafia, but Kozel is also Russian for goat.

Now the investment projects are scaling up in the hope of producing more sophisticated Russian dairy products.

Aton Capital managed direct investment fund has announced it will invest in the production of mold cheese varieties such as brie and camembert, the head of the fund Andrei Tikhomirov told Vedomosti on August 28.

The first production will be set up in the southern Krasnodar region, also home to Russia’s domestic wine production, with the average investment by Aton varying from $5mn to $20mn per project. The plant with 30-60 tonnes monthly capacity will be headed by an ex-Vice President of dairy major Wimm-Bill-Dann Oleg Kuzmin.

According to RosStat the production of cheese has been lagging behind other food segments that got a double-digit import substitution growth boost, showing a modest increase of 3% to 0.6mn tonnes in 2016. 

At the same time experts surveyed by Vedomosti estimated that premium cheeses such as parmesan, camembert, brie, and others account for about 2-4% of total cheese consumption in Russia, which has been dominated by domestic produce since the imports ban.

Production of premium dairy products could become a new field of growing competition in the dairy business, which had both the foreign majors such as Valio and local food players such as meat processing colossus Miratorg fighting for a slice of the vast domestic market.

Anecdotal evidence already shows that demand for quality cheese of more exquisite varieties is likely to be high.