X5 Retail Group N.V. (FIVE) Earnings Call Transcript & Summary

Thank you very much, Alyssa. We expect that this will be the case. And now over to [ Ruslan Serkov ]. He is Head of Corporate Communications and Sustainable Development of [ PMG ] in Eastern Europe. So what should happen, and you see that the consumers -- sorry, is that the suppliers and the retailers are on the same page. What happens to the consumers?

Actually, I was happy when I saw the report by Igor Shekhterman. We have not yet arrived, but we are already very much progressing in our journey. And you would see that it is about healthy habits. The consumers have defined the rules of the game. I would like to focus on 3 things. Everything that is about the basic needs of the company, about the production and the accountability for the products in the process of production. Those are basics. So the companies do that. It's a matter of time. It is already working. And everyone has an understandable strategy, including X5. And we are all going there. The second most important thing is that this picture that we see, and you have seen that the environmentally friendly habits are #2, and it's just 50% that will be important. And that's what we are lacking. We need to gain scale. And the key to success is the consumer. And this is the #3 here, and I would like to give you an example of how it can work. What's important for us is to get across to the consumer what exactly is environmentally friendly, so that they have the expectations that something should be irresistible. I mean, the environmentally friendly product should be so irresistible that they wouldn't have any concerns around their convenience or price. And now moving on to the example. It is a coincidence that today, our sales at X5 have announced a new campaign in Pyaterochka in 16,000-plus stores. And we are testing there the engaging model there. When the consumers buy our products, they should vote for the city or the town where we will open the full-fledged center for processing all sorts of materials. It's not just plastic. It's all sort of materials. And again, a coincidence. This is a small world, and everyone knows everywhere. And we also have here in this room, the people who are doing this with us, [indiscernible] He is waving at us. He's helping us technically together with [indiscernible]. We are launching this campaign with them for 2 or 3 months there by -- that Pyaterochka will be able to vote for the city. We have to be realistic. And we can have this center. And you can go to the list of 13 cities and vote for it. This creates the engagement. The consumers will set the standards. And this will the best catalyst to trigger this whole mechanism and to support this short video that hit the screens recently. [Presentation]

Buy up to 2 products within your cart, register your check and get environmentally friendly bag, and you can also win the scooter. Let's save the planet together.

Now thanks for that. And now to Elena Konnova who is Head of Corporate Communications at X5. We heard a lot of ideas. Everyone is open for cooperation. And we would like to understand what you have learned and what are the process there? What are the exciting things to do with all the stakeholders? I believe it was extremely interesting to listen. I would like to speak less and listen more your opinion, the focused opinion of the experts, I would say that it is a great knowledge. And I'm sitting here and making notes for myself.

The most important thing is that we harmonize and we reconcile our positions. And that's the most important thing for us, to be on the same page with our stakeholders. And all the main areas of X5 there, they will be our priority. Number one, that the rules of the game, [indiscernible], we have to explain to the consumer what is environmentally friendly packaging. We have to agree about it. Now we have our own standards, but we, as the industry, have to agree about that. That's the most important thing. Then we will be able to explain it in the right way to the consumer. Number two, on operations. At least that's very important for us because a lot of waste is generated within X5. It is 400,000 tonnes in X5 alone. It's all valuable materials. So we have to launch and further manage that. We have 2 biggest suppliers, [ PMG ] and Coca-Cola, and for us, you are the source of knowledge about sustainable development, et cetera. But 70% of our suppliers are SMEs who don't have resources like we do. They cannot really invest in the development of their own practices. And our task is to develop those practices, make them available to the market and to get everyone engaged. Then our practices will spread throughout the market. And what we are speaking about all the time is they are our customers who are pushing us forward. What's important to them, I believe they will remain a priority, first of all, give an opportunity to a person, give them a choice to be more environmentally friendly. Even today, they can use that shopping bag rather than a disposable bag, or use the recycled plastic bag, or you can return the bags to our [ couriers ]. You can also use your own bottles for household chemicals. You can also experiment with your own environmental habits. You're collecting bottles, toothbrushes and some bottle caps. So we are using this. We believe that's an excellent tool. Probably, we won't collect a lot, but we are showing to that people, to their children, they discuss that. It's sort of a game, and we have a lot partners with whom we are working on those separate areas. I believe those are extremely important things answering [indiscernible] who gave great recommendations will have this report in Russian, too. We're thinking about having it verified by the Russian Council of Entrepreneurs and Businessmen until we already made sustainable development training mandatory. And right now, 70% of our employees have done it, and this is a mandatory rule. And hopefully, this will also help us move forward.

This is very briefly what I wanted to see right now so that we have time for the questions. And we have a question to you, and so we have discussed very topical climate agenda. How are you going to bring the share of renewables to 30%, given most of your stores in Central Russia where you don't have much access to bio sources? And one of the sources is hydro energy.

We are practicing this. Probably we will find other opportunities. Now we have the contract with a Russian hydro company. We could discuss which renewable sources are better, but we are trying hydro energy.

Are you planning to have the electric car charge stations next to your stores?

We haven't thought about that. If we hear this request a lot, we'll see. I hear it for the first time. Okay, it will be part of the ideas for the future.

And another question for all the speakers in your personal practices. How do you decrease the environmental footprint? And what are the plans?

Who is ready to start? I could start here, and I want to be original here. But the first thing that I started to do a few years ago is actually separating my garbage, and I try to train the older generation in that. And when I see my parents taking cardboard and plastic, I'm proud of this. And we have a lot of examples. We have 60 brands, and I have a lot of selection. When you [ wash ] 30% rather than 40. And so with our detergent, you can see that. You save 60% of energy, and you will improve your carbon footprint. Another tip I learned recently, although I've been with the company for a long time, it is enough to have a 8 -- if you have 8 items, then use the dishwasher. It is already environmentally friendly and you will save money-wise and [ common wise ]. Shampoos. There are dry shampoos and there are ordinary shampoos, but you've got to understand how much water we're using. And right now in the U.S. and Russia, we have similar water consumption per household, it is 500 liters per day. 500 liters per day. And thanks to our products, we want to bring it down to 50, and you have to reflect about this. Just be mindful when you are using different...

I see that [ Ivan would like to step in ], but these are top 3 on my list.

Okay, I want to respond. Okay, your personal environmental habit. For 15 years, I have been working at the [indiscernible] and as part of a financial [indiscernible], but I changed my career because I wanted to be in sustainable development. I wanted to help the Russian businesses become more sustainable, and I completely share what my colleagues are saying, and I'm not taking away my personal responsibility and accountability. I'm trying to exercise those habits, and we talk a lot to the students to improve their awareness. And I'm lucky because I'm doing this every day, participating in events like this. And when I talk to clients like X5 for the past 3 years, and this is my personal impact.

Thank you very much, [ Vladimir ]. I have the separate waste collection, but I started it recently. I come from the Far East, and in the Far East, it's just 6 million people. The 6 million inhabitants. And there are people in Russia who don't have any access to separate waste collection. That's the Far East. And quite recently, I started doing it in the Far East. When I worked there, we didn't even think about this. So that you understand where we were, Elena. And I come from St. Peter and my main home is in St. Petersburg, and we don't have a separate waste collection. And we initiated the meeting of the community. My eldest son is turning 25 today, and he brought me into the [indiscernible]. He brought me there. He said, that's the way to look to collect them, you have to sort out the waste. And I wanted to say that the younger people. And [ Ivan ] said that, that people who are driving the situation, they are people from 25 to 30. That's very true. That's where the future is. And my personal contribution is to listen to them and follow their suit.

Okay, congratulations. And with this, I would like to thank all the participants. And we are going to reduce our environmental footprint all together.

Thank you for the moderation, and I would like to thank all the colleagues present on this stage for their report and for the information they shared for the tips and tricks. And we are moving on, dear online participants. Thank you for joining our session today. And now we will have a short break for 15 minutes. After that, we will continue our conference today, and we will have sessions #2 and #3. And we will -- join us at [ 15 30 ]. [Break]

[Foreign Language] Welcome you back after the short break. Yes. During the break, I checked the questions that were asked on the chat. And we will ask those questions to speakers if it's relevant during the session, or we'll reply in the chat or we'll publish the replies later in the chat. There was 1 question that I would like to answer right away. And the question was whether the pandemic has changed our priorities. And a brief reply is no, our priorities haven't changed. So over the last 1.5 years, we have been feeling how fragile our world is, how interconnected different parts of the world are. So environment, healthy and lifestyle, support of people in need remain our priority. And the pandemic even strengthened the principle that you mentioned. Yes, it's strengthened the understanding that not everything is -- everything in life is interconnected. And we need to be very cautious, and we need to care of our environment and people in need. So the pandemic hasn't changed our priorities in the area of sustainability.

And I would like to ask a question to you as a transition to our second topic. Do you have any bad habits?

Well, I think that's a provoking question.

That's how it happens on the stage. So you have some bad habits?

Yes, I left them behind. So bad habit is actually a very important matter. Have you noticed that many retailers and producers try to nudge their customers to make healthy choices?

Yes, I have noticed it. They want us to live longer and to stay your customers longer.

Yes, it's a very rational explanation. I think you are right to some extent, but just to some extent. We deeply care. And I see my colleagues and people that I know, we want to make healthy choices ourselves and want our customers, our consumers to make those healthier choices. So I suggest announcing the next session.

Yes. I think that I'm in my prime. And how do you feel? My energy is for you, for your disposal. All my richness. Green apples or fresh bread, there is no secret. Just take a look how beautiful I am and how easy it is to be the same. All the riches of the Earth and good habits. And you cannot have it on Mars. So let's stay together for a longer time.

And I would like to add, there is no X5 in Mars, but that's not for sure, not for long. We work in a bit. So are you're already in negotiations with Elon Musk?

Okay. That's a joke, of course. But thank you for this introduction of the second session. And the name is the ways of healthy habits in nutrition, and I would like to introduce [ Tatiana Mikhailenko ] of the [ Green Portal ].

Hello, dear friends. Thank you for joining us here today, and I'm very glad to be the moderator of this session. I'm Tatiana, I am a blogger and a journalist, and I cover many healthy lifestyle aspects. And I'm developing a project to make healthy lifestyle more popular in Russia. And I have my own award, green awards for manufacturers. A couple of years ago, I wrote healthy nutrition and thinking life hacks where I shared my insights and good practices. So today, with our experts, we will discuss healthy lifestyle and healthy nutrition, debunking myths, if there are any, and highlighting challenges and much simpler things that are much simpler than you might think. I'm introducing our participants. It's Tatiana Stepanova, Marketing Director, Perekrestok, [ Natalia Chervina ], professional psychologist; Alexsey Kovalkov, Doctor of Medicine, Dietician Sofia Bryantseva, nutritionist with Nestle; and online, if everything will work fine, we will have [ Eleana Smirnova ] with us, head of the demographics laboratory and nutrition epidemiology -- nutrition and biotechnology. That's the name of the organization. And let us start with a brief poll. This poll will be available to online users. Just look under the screen. And if you are participating off-line, you can scan the QR code. I encourage everyone to join the poll because it would be very interesting to find out what stops us from eating healthily. Option #1, I can't cope psychologically. I am addicted to junk food. #2, I do not have enough information on how to follow a healthy diet. #3,, I don't understand why I should eat healthy. There is a lack of availability of healthy food products on the shelves. And #5, nothing stops me. I've been eating healthy for a long time, and I recommend you do the same. Please provide your opinion. I'd like to find out what are the opinions of our participants. And it will take a couple of seconds. Yes, we'll need some time. And here, we can see the results. And as we see, most of you say that you are -- you cannot cope psychologically, addicted to junk food. And another popular answer: not enough healthy choices on the shelves. Each of those options have 38% each. And #5, I have been eating properly, is also quite popular. Many of you eat healthy food. So let us talk more about healthy eating. And even some of you who mentioned that you are addicted to junk food, you might find something new for you, and understand that actually, it's much easier than it seems and there are many myths that we can debunk. And I would like to talk to Tatiana Stepanova, Perekrestok, Marketing Director. Tatiana tell us, please, why is it important for retail stores? It seems -- it might seem that stores simply follow their interest and the request from customers. They put something on the shelf under track and what consumers prefer and provide more of it.

On the one hand, you're right. We follow the request of our customers. And we see that after the start of the pandemic, many people ask for healthier foods. And besides, we, as a business, are responsible for healthy consumption among the population. So it's a similar agenda in X5 and Perekrestok, and we, as a business, want to help our consumers. Every fourth consumer want to buy eco products, bioproducts, farmer-grown products, but only a small section of consumers are happy with the assortment. That's why we continue working with our suppliers. Healthy lifestyle is an important area of our development that will bring us even closer to our consumers. Some interesting things that we are doing. In particular, in fact, we have a healthy life corners so that people can easily find the products that they are looking for. Besides, we are collaborating with our suppliers, and every partner can select the attributes that their products have. For instance, gluten-free or organic or vegan, and provide documents that confirm that classification. And we can put those products on the proper shelf to help our consumers to better navigate among the tools. We have our private label, and we see for sustainability-conscious people, and we started with dairy. Now we also offer dry goods and even ready-to-eat snacks or ready-to-eat food, and the assortment is constantly growing. We see that our consumers are getting more and more prevalent. We try to understand our consumers better, understand their needs. We understand their consumer profile and develop, expand our assortment to meet the needs. The penetration of healthy lifestyle products in the average ticket has grown. So we see that people buy more and more healthy products.

Thank you very much, Tatiana. And what are the criteria today for a product to be named natural or healthy lifestyle supporting? You mentioned organic products were other aspects. So what does it mean for Perekrestok healthy eating?

Yes, that's a very important question. We spoke to a nutritionist, to customers, and that is something that supports need of people to be healthy: food and vegetables and vegan produce and products for people with diabetes. We have prepared a classification so that our suppliers can better understand how they meet, how [indiscernible] into that structure. And we highlight those products on our shelves. People with lower sugar content, people for -- people with diabetes. People can better navigate. So now that content is constantly growing, the penetration of this category. And I think that by the end of the year, it will grow significantly.

Thank you very much. That's good news because the more accessible and affordable healthy products are becoming, the easier it is for people to go there, and we do not have to spend a lot of time and energy anymore to find such products. Yes, it's very unfortunate that the needs of customers, consumers and the products that retail chains are offering meet. More and more people are looking for such products. And I would like to talk to Sofia, nutritionist at Nestle. And my question to you is, what is your opinion? Is it easier right now? Can any person find healthy nutrition in the stores?

Thank you very much for this question. I would like to -- I suggest abandoning that classification into healthy and unhealthy products, because it's about balancing your diet in such a way so that you get enough nutrients and include products food from many groups. And actually, in any store close to your home, in any convenience store, you can find products that can support your healthy lifestyle. You should pay attention to vegetables and fruit that should constitute half of our diet. Potatoes, excluded. And whole grains, they contain all the natural components in a balanced proportion and provide a lot of fibers, carbohydrates and energy for our body. We need to use our sources of protein such as meat and dairy and fish and legumes and include fish because fish provides not only protein, but also omega-3 fatty acids. And dairy, they provide a lot of calcium and 2, 3 portions of dairy every day. It's yogurt or milk or cheese. And remember to drink enough water, enough fluids without sugar or with low sugar contents. As you see, all of those products can be easily found in any convenience store. And by following these rules, you can collect -- you can establish a good food basket. Yes, in Perekrestok, we have prompters. You can find information on what you need to buy to have a well-balanced diet.

That's cool. But there is a notion that of vegetables and fruits and meats are products, and poultry, the -- they are not very healthy because pesticides are used or antibiotics are to keep animals healthy.

Actually, we work a lot with our suppliers. We take care of transparency of supply chains. We check where those -- the produce is grown, the -- how animals are kept. So we will further develop that area of application.

Yes, that's important. We need to consider it to call food really healthy, Sofia. I feel you consult people a lot. And you might know what kind of myths are there in relation to healthy eating. So what are the myths? And what is the right attitude to those topics? Maybe our listeners can better understand it.

Yes, we live in the information age, and unfortunately, not all the information is -- can be confirmed -- is confirmed by scientific research. And if you remember, several decades ago, people tried to exclude fats from their diet. But recently, fats were rehabilitated or reinstated in their right to be present on our plates. But now, people perceive carbohydrates as their enemies. Actually, we shouldn't be afraid of them. They have a place in our diet, and there are myths about some products. Until now, people think that palm oil is poison. But actually, that's a natural fat that can be consumed as a part of a healthy diet, just not too much. Many people do not trust gluten, but most of people do not have any problems with digesting gluten. So they can eat gluten-containing food. And another myth is that you need to drink at least 2.5 liters of pure water every day, excluding tea and coffee. But actually, our body can get water from soups and from cucumbers, from other types of food. And one of the widespread myths is about some products being completely fulsome, completely good for your health, you have to think logically.

And now that you are talking about the water, I felt like having some more. I would like to discuss the following. It is the food of the future. And right now, there are certain trends developing, and there are new formats of this type of food. Could you tell us about what it is and how much is it associated or not associated with healthy foods? And how do views evolve if we are talking about the food of the future?

Right now, we have almost 8 billion. And in 2050, they're speaking about 10 billion. And so our choice is to make sure that everyone can have the right healthy diets with all the right nutrients. And one such task is to develop the protein sources which would be a viable alternative to meat. Because as you know, meat industry takes a lot of resources. And probably, it wouldn't be able to care for the 10 billion. And here, we are talking about plant foods and insects. You can also grow meat in a lab tube. And so this artificial meat would be completely identical to the real meat and the 3D printing. Even in Moscow restaurants, you can have a 3D-printed squid. And we can also see the substitutes that are very close to meat. And this is also the response to the needs of the consumers who are turning to what's going vegan.

Speaking about the trends, actually everything around us is moving digital, and definitely this is also about healthy lifestyle, starting from smartwatches and pace meters, to step counters and also the applications that help us assess our foods and help us also order something. And yes, Sofia?

And another thing, actually, we have been looking at healthy foods, not just as getting something nutritious. We also make sure that it's not just healthy, but also sustainable. And we are trying to make sure that we use the planet's resources in the right way. And especially when we speak about the food of the future and 3D printing, that's exciting. And the thought is that I really like this trend to going vegan and vegetarian, also is that from the assumption, that's probably there won't to be enough meat for everyone and they are trying to associate it with health. I believe that everyone should have their own choice.

And now I would like to ask the question to Natalia, our psychologist. And I believe you are working a lot with the clients. Do you have clients who want to learn about healthy foods and overeating? What prevents people from eating in the right way and in the right amount? And what are the psychological tricks that can help people?

Thank you very much. Yes, we do have a lot of clients who asked about that. And what I would like to discuss here, it is our physiology. We have moved to first, and for centuries, we lived in communities, and hunger was the anchor for our brain. It's the time to start moving. When you are hungry, start moving, start doing the push-ups or the situps. And this is no magic. It's simple physiology. And one of the main points here is that we are not thinking about that. And people start viewing hunger as something hostile and negative emotion. And so very often, people cannot withstand hunger. And the next problem is the problem with the eating behaviors. Whenever I am sad or happy, I can not process that, I start eating. I move the signal from my head to my stomach. And it somehow is a small pain. The rest of people who feel emotional pain and they could start cutting themselves or pinching themselves. And people have to learn to cope with themselves and to understand why they're eating. Are they eating because they are hungry? Or to go cope with something I cannot cope with otherwise? And what is the right way? Some smoke, some turn to alcohol.

And what do psychologists recommend?

You know what, if we are talking about emotions, as a dietologist, I usually advice to use apps like FatSecret. And what I like is the emotional diary. You don't stop yourself. You don't exercise the will power. It is a limited resource. You start writing what you feel. And after a couple of weeks, you at least can understand what such of emotions lead to this state, and then working with this emotional state. For example, when -- it is a maternity leave for women and your children are asleep, and she starts eating and this is an association of food and relaxation. And if she keeps a diary, she starts to understand that she needs to go for with your stress different ways. And when people go shopping, you know that this is in the trial. And this is when you go shopping and you want it here. And now -- and that's great. When this inner child is motivated and stimulated in any other way rather than food. Grandmas and moms very often express their love through food. You visit your grandma, and at the end of summer, you get fat. And if the mom doesn't know what the child eats throughout the day, then it means you are a bad mom. If you don't think just about that, and you have to eat. So grandmas make sure to [indiscernible] a lot. And these are the moms that are passing on their behavioral patterns to us. And it's always about emotions. So for the emotions, probably somebody, like they're buying clothes, someone loves us, somebody meeting friends, but it's about getting out of the irrational position or the position of a parent that many live with. And when my inner child is internally satiated, not hungry, then they don't crave for food that much. So understanding ourselves, our emotions, through understanding what leads to overeating [indiscernible].

Thank you very much, Natalia. And now let's talk to [ Eleana Smirnova ], who is joining us by Zoom. And we can see [ Eleana ] and [ Eleana ] is head of demographics and epidemiology of nutrition, and we can see and hear you well. I wanted to ask about the following. Do you believe that there should be some kind of healthy eating standards for everyone? What is healthy lifestyle? Are there any formal criteria?

Talking about healthy eating, starting from March 2020, this became a part of the federal law about the quality of food products. And now, healthy eating and the principles of healthy eating are part of this law. There are definitions, and whatever we discuss anyway, so we'll go back to what is written in the law. In Russia, it is defined in regulation. And I will agree here with Sofia when it comes to wording the main principles, and it's very close to what we have in the law definitely. It's not about the products that are called healthy products. No. We are talking here about the diet. We are talking about the diets. And in terms of the regulation, there are no healthy or unhealthy foods. There are healthy and unhealthy diets. Speaking about healthy lifestyles and the criteria for that. I would say that the WHO has already taken care of us and there are indicators to assess healthy lifestyles. First of all, no smoking, adequate physical activity, 150 minutes of moderate exercise or 70 intensive per week, and also no more than 80 -- certain amount of alcohol. And 2 criteria for food, that is consumption of vegetable and fruit, it should be minimum 400 grams. It is 2, 3 portions of vegetables; 2, 3 portions of fruit; and no more than 5 grams of salt per day. Those are the official criteria of healthy lifestyle.

Excellent. And you can find it in law? I know the criteria for healthy lifestyles, a part of WHO documents?

I wouldn't be able to give you the number of the documents from the top of my mind, but it is a well-known definition. As to the principles of healthy eating, if you look at the federal law about the quality of food products, you will find the principles of healthy eating or the principles of healthy diet.

And could you tell us why is the government introducing this? And why is there the need to make it a regulation? And what incentives should the government take to promote healthy eating? And what measures are already being taken? As far as I understand, if it is part of the regulation, the efforts have been stepped up.

Exactly. Actually, we are living in really exciting times starting from 2019. the government is paying unprecedented attention to healthy eating and healthy lifestyles, in particular. And definitely, there has always been the health education in place. But the efforts that we are seeing both in terms of regulation and promoting the principles of healthy eating and raising their awareness, I would say they are without parallel, and it all started in 2019 with national projects called demographics. And looking at this law, we understand that this is the result of the first year of the project. It would be interesting to understand why this is happening and so why government wants to do it right now. Okay. We're going to move on. It's very simple. The goal of the government is to ensure longer lifespans to decrease mortality and make sure that people are healthy, and nutrition is one of the main factors. It's more than 50% of building of human health. And unfortunately, the eating habits in Russia left much to be desired. And definitely, we have the main nutrients, and energy-wise, it is fine. But the structure of consumption is far from ideal, and we have excessive calories in the food. We consume a lot of salt and sugar, and old habits. And this means the obesity, and right now, obesity is quite high in Russia. If -- more than 60% of Russian population have these risk factors in place, and this is putting them in danger of osteoporosis, diabetes and cardiovascular disease.

[ Elena ], thanks so much for being with us and explaining it all to us so straightforwardly. We have the same goals ourselves and the government. The government also wants us to be healthy. And now I would like to ask the question to [ Alexey Ivakhov ], who is a medical doctor. And Alexey, tell us, is it all in the genes? And everything else is relevant? And should we exercise and eat healthily? Or is it all about the genes?

If we are looking at cucumbers, for example, I have cucumbers in my greenhouse, and it is a great product that was [ brought ] by our people. But then now we put it in the salt solution and depending on what we do with this cucumber, whether we pickle it or consume it fresh, the outcome is different. And health is given to us for free. That's why we don't give it much thinking or cherish it. We are talking about the diet, and the dietologist say that it shouldn't be just about good foods. That's a must. Definitely, they should be high quality, but they should also be well balanced. And we've got to understand that the way a small girl eats or an old woman or a body builder eats, and even throughout the cycle, women lose iron, and they should take more iron. And there can be additional diseases, so iron wouldn't be digested. And academician, [ Pokrovsky ], Head of the Nutrition Institute, said that eating should be balanced individually given the individual features of each patient and the tasks of the doctor. And we understand that it's impossible to select an individual diet for each person, especially in the store, and the way out is education. And as they teach a lot of subjects and things at schools that can never be used quite in life, you can hardly remember any of your chemistry or mathematics formula. But how to combine correctly the food products, that protein should be different, that by a logical makeup is important. The micro flora is very important. And this is something that the children should be trained early in life, and the government stepped out of this. I believe if the stores take on this function, they will bring up the new generations who will come to their families with this knowledge, who will tell their mom. Mom, you are not buying the right foods because you come to the yoga's shelf. There are [indiscernible] on the shelf. How do you select? They only look advertising with the price. But when they know that this is calcium, and it has to come with phosphorus. If it is too much phosphorus, then calcium will not be consumed. If it is too -- there is too little phosphorus, but calcium will get on the vessel wall. And you have to add magnesium and vitamin B, and this is mindfulness and the understanding of why they need to eat the right thing. They understand that they need to do it, so that their family is healthy, they don't waste money on the pharmacists. Half of the budgets of elderly people is spent on the pharmaceuticals, and you don't want to do as winter traffic. You want to lay the right foundations the house of your health. And so the government stepped out from that. This would be great if McDonald's and the retailers would take on the children, the young people would have some master classes, meeting with dietologists, probably even online. It would be a great start, and then they would raise the new generation of consumers. That would be great.

Thank you very much, and that really resonates, and I would add from a different perspective. My yoga instructor is always saying your body is the new car that life give to you, but how you drive it is up to you. You can use it on bad roads and break it or you can make sure that you want to take care of it, and then this car will serve you for many years to come. I agree with you completely, and sorting out all of those things around marketing are difficult. And the responsibility among this should be also on the government and the stores. They should help the consumers buy their way. But now we are living in era of education, online and short courses online. I have online school for health and lifestyle businesses, and I believe a lot more consumers could become better educated. And I believe our education is the least educated yes, but there is a flip side to this. When people who are in health and lifestyle, who are providing all sorts of slimming [ my results ], who are not responsible for anything is different from the doctors and who don't know a single thing about health and who are only about PR or subscribers or about money, and they are doing great damage to the people. And people, for example, you see is that people that have problems with their health, which should exclude meat, and they recommend eating more meat. Now it's the time for the professionals rather than amateurs, and I believe we are going to a new stage, and this is -- this area of education is going to be licensed. And hopefully, the quality will be boosted. We have some examples. For example, we understand that education should start early because this is when the right habits are built, and we have the social programs. And it started in 1989, and we see that almost 1.5 million school children are taking this, and our social responsibility is about helping parents. And big companies are starting to care about this. And we don't have much time, and we have time for one question. And the question is to Tatiana, and this is the question from our broadcast. Why do you have unhealthy products? For example, the palm oil products. I'm just reading. Thank you.

And like I said before, it's important to give people choice, and we have to tell them what we can give them. There are some myths around health, and it's important for us to let people that will give people choice, and we have to explain that it's about choice.

I would like to thank all the participants for this interesting discussion. And hopefully, our off-line and online participants liked it. I think that all the questions discussed were really relevant. Goodbye, and thank you for your participation.

The majority of our conference is already behind us, but another important topic is ahead of us, and we'll talk about developing social programs supporting the underprivileged.

Yes, I completely agree. That is quite interesting and that is very important because everything that people do, they do it first for themselves and for the future and for those who will continue living on this planet with future generations.

Yes, when we discuss stable development and no business can be sustainable if there are routes or population that are not supported by anyone. So the question is who shall we support, what are the right forms, the modern technologies. All of that will be discussed during our third session. I would like to give the floor to the moderator. But wait a second, let's take a look at the screen, and then we will announce the participants. Do you know great when you have reliable friends that shares your opinions. Maybe sometimes, you do not notice how you help me to take care of yourself. You have many good-hearted people trying to help others. I'm happy to watch you and help us much as I can. It's good that we met today to act and to think together. That's our mutual choice for the sake of the future, and I will take care of you.

And the topic of our next discussion is retail as a driver of social interactions. And I'd like to give the floor to [indiscernible] the Head of our [ Plus 1 City ] project. And this project is a partner of our conference, and she will invite and introduce all the speakers of this session.

Hello, everyone. I'm [indiscernible] and I'm the Head of the [ Plus 1 City ] project. It's a navigator to use socially significant services, and it's a great honor and pleasure for me to facilitate this session. Compared to where we started 2 years ago, the majority of useful services were not tied to retail. But now about 30% of socially significant services are in the area of large stores, and it's very good that those services are present in large stores because more people can see that. And today, we have [indiscernible] with us, represent the key value of search and rescue team; Sergey Goncharov, General Director of Pyaterochka; Ilya [indiscernible], founder of [ Sensipar Company ]; Nikita Kukushkin, Russian film and theater actor, founder of the Help project; and Julia Nazarova, President of the Rus Foodbank. But to start, a brief survey for our viewers and participants. So the question is, what is the social role of retail: number one, low food prices and the affordability; number two, food support for the underprivileged; number three, involving consumers and charity projects; and four, providing a comfortable and safe space around home? Dear friends, you can use the survey QR codes or you can use the link below the streaming window. So while we are waiting for the results of the survey, do you have any forecast? What will be -- which option will be the winner? I think low food prices will be on the top 2 and food support for the underprivileged.

I think so, too.

Yes, that's -- are there any other opinions, maybe involving consumers and charity projects? We would like to, but we are trying to forecast the opinions of the majority voters. I think that low food prices is the key option, seemingly obvious. But as a head of the project that deals with those assets, safe environment around home is important. And retail assumes a very important role here because when you have large, nice, well-kept store nearby, when you are followed by somebody suspicious in a dark evening, you can enter the store and you can feel safer. Yes, there are results. And as we guessed, low food prices and affordability of products, and number 2 is creating comfortable safe neighborhoods and provide -- and also food support and involving consumers and charity projects. And today, I would like to give the floor to Sergey Goncharov. My question to you is, why is Pyaterochka engaged in social programs?

Hello. Pyaterochka is a major retail company in Russia. More than half of the country's population visit us. And speaking of the total number of people that visit us daily, 13 million people every day. And if we add 260,000 employees plus their families and our business partners and suppliers, more than 8,000 companies and families of people working there, then you can understand that the scale of our business is huge. And that huge number of people come in touch with us every day. We think that we, as a commercial organization, being such a large and successful company as we are, should be socially responsible. And by the way, speaking of X5 Group, X5 has more than 300,000 shareholders Most of them are just usual people, households, families that hope to get additional income from dividends and the share price increase. So when we are speaking of such a huge coverage at scale, we need to be very conscious of the impact, how we impact the society. And it's very important to care for our community -- a cornerstone of our consumer value offering.

Sergey, could you tell us please how you selected the areas where you develop your social responsibility programs? And how did you approach selecting the partners?

We have been working with Rus Foodbank for a long time, and we have been investing for a long time into such programs as Basket of Kindness and the Candy of Kindness foundation Life Line. So convenience and trust and our scale and scope was very important. And besides, I'm inspired by our program, Safety [ islets ] that we launched together with Liza Alert search and rescue team. We asked -- we search for those opportunities, and now we helped more than 1,800 people to come home.

Did you face any problems on that path?

In such a big organization as ours, how should I say it? At the beginning, that process took some time. We needed some time to launch this process and to gain momentum and to scale it. But when we mention it often, when we convey this message to colleagues, to employees and, most importantly, when we understand why we do it, what is our purpose, it becomes smoother and easier every time. Besides, we try to think what else we can do considering our large scale because we have 17,000 stores in our Pyaterochka network. We invited one of the best companies in Russia to cooperate us, the [ Sensipar ] Bureau and Ilya and his team conducted a large survey for Pyaterochka. We talked to families to common people what they are concerned about, what they care about. And we launched several pilot projects in 5 cities. If I'm not mistaken, it's Moscow, Nizhny Novgorod, [ Polevskoy ], Novorossiysk and Krasnoyarsk. And we found evidence that our stores are hubs of local communities that unite, to some extent, people around them. That's why after launching this survey, Ilya will share more on it. Now we are evaluating the results, and we want to scale this project up and invest more.

Thank you very much. And now let us move on to the next panelist, Ilya. How did -- when Pyaterochka addressed you, what was your reply?

Actually, the request was to help understand what are the distinctive features of Pyaterochka and what is the role that Pyaterochka is playing in society. We conducted a large survey, and one of the things that we understood is that Pyaterochka stores in large cities and in small towns are natural centers of local communities. It's not always very sunny, but sometimes, it's the only place where it's warm and good lighting and good products on the shelves. And people meet other people, neighbors, schoolmates, workmates before the checkout in the checkout lines. And we came to the conclusion that contributing to development and local communities is something that Pyaterochka can support naturally. It means that Pyaterochka can help people to find out about initiatives, help people, help others through making them aware of what is going on around them. It doesn't mean that we will play the role of entertainers, but we perceive it differently. There are many people in every community that are ready to contribute to society. They simply need a coordinating center, a coordinating impulse, and that's what Pyaterochka can do. And it increases trust, and people like Pyaterochka more and like the community that they live in more and create better social bonds.