By John Helmer, Moscow
If it wasn’t for a Russian, Americans wouldn’t be able to lick large lollipops.
Samuel Born – it isn’t known what his original Russian name was – emigrated to the US at the end of the 19th century. There he invented an apparatus he called the Born Sucker Machine. Its function was to insert sticks into hard lollies so they could be sucked slowly. This was a revolution in the sweets business. It allowed sugar confectioners to manufacture — and charge premiums for — much larger sucking sweets than had been known for two thousand years. Until the Born Sucker, a sweet had to be small enough to fit into the mouth at one go. Noone, from the Pharaonic Egyptians to the Obamic Americans, likes sticky fingers. *
But now the US is at war with Russia, bent on overthrowing President Vladimir Putin, and in the meantime cutting Russia off from the flow of bank capital, oil and gas technology, and imported lollipops too – because Putin and his friends depend on them. There has already been one confectionery casualty of this war – exports by the Roshen company, owned by the Ukrainian president Petro Poroshenko, have been banned in Russia, their principal trade destination, and the Russian factory of the company arrested  in Lipetsk.
Poroshenko’s losses from the Russian confectionery trade over the past two years have been almost $300 million  – the difference between profit and loss on the Roshen company’s balance-sheet. The Ukrainian assets of the company are no longer a takeover target for European confectionery companies, nor of value to European or US investors. The duty-free trade preference  for Ukrainian chocolate exports granted by the European Union (EU) may have sweetened Poroshenko ahead of his election in May 2014, but it has failed to eliminate Roshen’s loss line.
THE DYNAMICS OF RUSSIAN IMPORTS OF SUGAR CONFECTIONERY AND CHOCOLATE, 2013-2015
Source: Intesco Research Group based on data from the Federal State Statistics Service, 
Key – red line, chocolate imports
blue line, sugar confectionery
The Russian confectionery business, by contrast, has been almost unscathed by the war. What might have been a modest increase in the share of the Russian market for foreign imports since the accession of Russia to the World Trade Organization began reducing import duties in 2011 has now stopped, and gone into reverse. Imports of chewing-gum, for example, comprised 3.9% of Russian consumption in 2014; this year they have dwindled to 2.5%.
Growth in Russian production of all types of confectionery, sugar, chocolate, flour cakes and chewing-gum, has filled the gap. Domestic consumption of sweets continues to grow, though at a slower pace. In terms of sales, the value of the Russian sugar confectionery market is currently about $4.5 billion, with an annual growth rate to 2018 of 1%.
DYNAMICS OF RUSSIAN PRODUCTION OF SUGAR CONFECTIONERY, 2013-SEPTEMBER 2015
Source: Intesco Research Group 
The leading producers in the Russian market are American and Swiss – Mars, with Mars Bars, M&Ms, Snickers, Twix, and Wrigley; and Nestle whose confectionery brands include Kit Kat and Smarties. They are reported to have a 20% market share each. They are closely followed by Mondelez International of the US, which until 2011 comprised the Kraft brands, and now includes the Cadbury, Milka, Toblerone and Cote d’Or chocolate brands, as well as chewing-gum brands Trident, Dentyne, and Chiclets.
The domestically manufactured, but foreign owned confectionery brands are the dominant ones, according to a study of brand-name recognition among Russians aged between 14 and 24, published by Profi Online Research.
Source: http://www.profiresearch.ru/ 
Sugar confectionery amounts to roughly 55% of the domestic market; flour or cake confectionery, about 45%. But the sugar products are more in demand and have been growing faster – at an annual rate of about 6% between 2009 and 2012, compared to about 1% for cakes. Five years ago, manufacture of sugar sweets or candy dominated in the Russian market with about 40% of the confectionery aggregate; chocolate with about 17%; caramels, 13%; james, jellies and pastes, 7%; chewing-gum, 2%.
This is how the growth in domestic confectionery was accelerating between the sugar, chocolate and flour products in 2012:
Lilia Gusmanova, deputy head of marketing research at the Intesco Research Group, said this week that the impact of US and EU sanctions, and of the counter-sanctions  imposed by the Kremlin, has been “painless”.
“This is primarily due to the fact that most major foreign food companies have localized their manufacturing in Russia: Kraft Foods (Group Mondelēz International, which includes Cadbury), Mars, Nestle, Unilever, Danone and others. Often, even the fact that we believe we are buying a domestic product turns out to be manufactured by a foreign company. For example, the chocolate factory Russia, located in Samara, is owned by Nestle. Thus, Russian confectionery production has remained at a stable level, and the companies with foreign origin have the major share of production. In the first three quarters of 2015 they produced 1.2 million tonnes of chocolate and sugar confectionery, almost the same volume as they produced in the same period of 2014. Imports have been reduced this year by between 50,000 to 70,000 tonnes, but that will not lead to a shortage of products on store shelves.”
“In the Russian confectionery market the share of imports has almost always been rather small – 3% to 4% — so this segment of the food market as a whole is not much affected by the sanctions and by the economic crisis. The share of imports in the sugar confectionery market is between 15% and 17%, and the reduction of foreign supplies in the market has been palpable. For example, foreign supplies of chocolate and chocolate products for the first eight months in 2015 dropped by 44%. Imports of sugar confectionery not containing cocoa contracted by 16% compared to the same period of 2014.”
According to Gusmanova, the same trend has been visible in confectionery market segments like chewing-gum and flour or cake products. While Russians didn’t start chewing gum until after the end of the Soviet Union, the opening of foreign-owned domestic chewing-gum factories quickly substituted for imports. The volume of these fell by 29% this year because of the sanctions war. But Russian chewing has been fed by an increase of domestic gum production of 18%.
Gusmanova explains: “Manufacturers of big brands like Dirol and Stimorol (Mondelēz International), Orbit and Wrigley (Mars) have been settled for a long time in Russia. They have large factories in the Moscow, Vladimir, and Novgorod regions, and the number of their employees is in the thousands.” Altogether, according to Russian government statistics, almost 90,000 Russians work in the confectionery sector.
After the top-3 in the domestic market come the big Russian manufacturers – the Moscow confectionery factory Red October; Babaev; Rot Front, – these three belong to the United Confectioners holding — and Slavyanka. Measured by a study of the number of clicks on the Yandex search engine in 2013, these are the most popular Russian confectionery producers:
Before the war in Ukraine began last year, and the sanctions combined with the fall in the oil price, Russian industry analysts had been reporting an annual growth rate of sweets consumption of more than 10%; this was expected to slow down to 5% per annum between now and 2017. Consumer demand has lifted Russian consumption of sugar confectionery to about 12 kilogrammes per head. Since this level has remained roughly 50% below the western European standard, Russian demand has been forecast to grow steadily. On the other hand, the sudden reversal in real income growth this year, and increasing awareness of the health dangers of sugar consumption, have reduced the forecast growth rate in consumption to 1% per annum.
Industry experts in Moscow say that between now and 2018, as the growth of consumption and sales of domestic confectionery slow down, they aren’t expecting any significant changes in the market shares of the main producers or shifts in domestic taste for the main product types or big brand-names.
Russia is also feeding the sweet taste of the former Soviet Union. Since 2007 exports of Russian chocolate confectionery have been growing at 5% per year to Kazakhstan (26% share of the Russian export volume); Ukraine (22%); and Azerbaijan (13%). The largest share  of jam, fruit jelly and sweet pastry exports from Russia go to Kazakhstan, Mongolia, and Turkmenistan.
As for the leading taste in the country, it isn’t likely to be affected by sanctions, not unless the US and EU attempt to stop Iran delivering pistachios to Russia. Local media investigations  of the confectionery preferences of the occupants of the Kremlin have identified candied fruit and chocolate as past favourites. Putin’s preference, by all accounts, is icecream, pistachio flavoured.
United Confectioners  in Moscow, which manufactures Alionka, Korovka, Pouffle and other well-known brands, is reluctant to predict what the impact of the war against Russia will be on their confectionery sales. “We don’t comment on this subject,” the group spokesman said. “We create happiness.”
FOOTNOTE: for the complete history, read: Tim Richardson, Sweets, The History of Temptation .