During 2006-2008 Russian market of hard drinks demonstrated robust growth with more than 20% of annual increase in value. Meanwhile in 2010 Russian alcohol market showed quite unimpressive growth; sales value exceeded RUR 100 billion.
According to estimations of “Global Reach Consulting” (“GRC”), in 2011 sales value of hard drinks saw more than 4% year-to-year increase.
In 2010 production of hard drinks in Russia saw slight year-to-year decline; in 2011 declining trend continued and production volume reduced by more than 10%.
Vodka dominates production volume of hard drinks with more than 80% in 2010.
Increasing share of vodka in hard drinks production volume is a recent trend; in 2010 share of vodka increased almost by 8%. According to “GRC”s” findings, this trend continued in 2011.
Domestic production of vodka in Russia is mainly driven by companies located in Central and Privolzhsky Federal Districts; in terms of federal subjects the leader of domestic production volume in the category is Moscow Region.
Cognac is mainly distilled by the companies located in North-Caucasian and Northwest Federal Districts; in the said regions production is mainly driven by Dagestan, Kaliningrad Region and Moscow.
There are still many SME manufacturers operating on Russian hard drinks market, however, according to “GRC”, production is mainly driven by production facilities of large holdings.
Most important players of Russian hard drinks market are “Russky Alkogol (Russian Alcohol)” GK CJSC, “Sinergiya (Sinergy)” Group OJSC, “Moskovsky Zavod (Moscow Plant) “Crystal” OJSC, “Alkogolnaya Sibirskaya Gruppa (Siberian Alcohol Group)” LLC, “Tatspirtprom” OJSC and “Bashspirt” OJSC.
Today “Russky Alkogol” group owns the following production facilities: “LVZ “Topaz” CJSC (Pushkino, Moscow Region), “Pervy Kupazhny Zavod (Blending Plant # 1)” LLC (Tula), “Sibirsky Likerovodochny Zavod (Siberian Plant of Vodka and Liquors)” CJSC (Koltsovo settlement, Novosibirsk Region) and “Parliament Production” LLC (Balashikha, Moscow Region). Brand portfolio of the group includes “Parliament”, “Zelenaya Marka (Green Mark)”, “Zhuravli (Cranes)”, “Marusya”, “Gerbovaya (Armorial)”, “Yamskaya”, “Sotka (One Hundred)”, “Talka”, “Serebryany Kupazh (Silver Blend)” and “Kauffman”.
“Sinergiya” Group incorporates such facilities as “ROOM” CJSC (Nizhny Novgorod), “Traditsii Kachestva (Quality Traditions)” LLC (Krasnoznamensk, Moscow Region), “Mariinsky LVZ” OJSC (Mariinks, Kemerovo Region), “ALVIZ” OJSC (Arkhangelsk), “Ussurijsky Balzam (Balm of Ussuriysk) (Ussuriysk, Maritime Territory), “LVZ “Khabarovsky” OJSC (Khabarovsk) and “Permsky VVZ (Perm Wine and Vodka Plant) “URALALKO” OJSC (Perm). Major brands of the group are “Beluga”, “Belenkaya (White)”, “Myagkov”, “Gosudarev Zaraz (Tsar’s Order)”, “Russky Led (Russian Ice)” and “Beloe Ozero (White Lake)”.
Moscow plant “Crystal” distills vodka under the brands “Chisty Kristal (Pure Crystal)”, “Zolotoe Koltso (Golden Ring)”, “Stolichnaya (Capital)”, “Zavalinka”, “Kristalnaya (Crystal Clear)”, “Prozrachnaya (See-Through)”, “Posolskaya (Ambassador)”, “Prazdnichnaya (Festive)”, “Putinka”, “Staraya Moskva (Old Moscow)”, “Pshenichnaya (Wheat)”, “Medal”, “Etalon (Standard)”, “Kazenka (Public)”, “Privet (Hello)”, “Ivan Kalita”, “Zimnaya Doroga (Winter Road)” and “Bely Klyuch (White Well)”.
Trademarks of “Alkogolnaya Sibirskaya Gruppa” LLC (Omsk) are “Pyat Ozer (Five Lakes)”, “Kedrovitsa (Cedar Vodka)”, “Khaski”.
Brand portfolio of “Alkogolnaya Sibirskaya Gruppa” includes brands of different price categories. Major brands are “Belaya Berezka (White Birch)”, “Khaski”, “Pyat Ozer”, “Kedrovitsa”, “Gusli”. The only production facility of the group is “Omskvinprom” located in Siberia.
“Tatspirtprom” OJSC (Kazan, Tatarstan) distills vodka under TM “Khanskaya (Khan Vodka)”, “Russkaya Valyuta (Rusian Currency)”, “Tundra”, “Sherkhan”, “AKDOV Original”, “Graf Ledoff”, “Tatarstan”, “Sataraya Kazan (Old Kazan)”, “XXI Vek Lux (XXI Century Luxe)”, “Tsar Kedr (Cedar)”, “Khlebnaya (Bread Vodka)”, “Priyatelskaya (Friendly)”, “Korabelnaya Rosha (Ship Timber Pine Forest)” and “Kazanskaya (Kazan Vodka)”.
“Bashspirt” OJSC (Ufa, Bashkortostan) offers the following alcohol brands “Dikij Med (Wild Honey)”, “Bely Chai (White Tea)”, “Bashkirsky Standart (Standard of Bashkortostan)”, “Belebeevskaya”, “Kalinovaya (High Cranberry Vodka)”, “Petrovsky Senat (Peter’s Senate)”, “Kreshenskie Morozy (Frosts of Kreshenie)”, “Ermolaevskaya”, “Lesnaya Krasavitsa (Forest Beauty)”, “Zoloto Bashkirii (Gold of Bashkiria)”, “Snezhnye Vershiny (Snowy Peaks)”, “Severnye Amury (Northern Amors)”, “Chestnaya (Fair Vodka)”, “Stalkovskaya”, “Gostinka (Small Apartment)”, “Kurai”, “Ufimka”, “Fyodor Chaliapin”, “Novaya (New)”, “V Semejnom Krugu (In the Family)” and “Davai Za Zhizn (For the Life)”.
According to “GRC”, during 2006-2010 Russian market of hard drinks saw increase of import and export in value with the exclusion of recession period (2008 and 2009) when Russian foreign trade of hard drinks declined.
In 2010 import constituted a little more than 20% of hard drinks market in volume with domestic alcohol providing respectively about 80%.
According to “GRC”, share of import on hard drinks market increased in 2011 and reached approximately 25% of sales value.
In 2010 total import of hard drinks to Russia increased almost by one third in volume and practically recovered the volume of 2005 when maximum index was reached (period of 2005-2011 was considered). In 2011 import growth ceased so import saw slight year-to-year decline in volume.
Meanwhile in 2011 import of hard drinks demonstrated more than 20% year-to-year growth which evidenced for increased prices for alcohol of foreign manufacturers.
In 2010 import was growing in volume in all segments of the review market. Vodka dominated import of hard drinks to Russia and share of this category in total import volume in 2010 almost didn’t change in comparison to 2009 – respectively 30.8% and 30.9%. In 2011 share of vodka in total import volume of hard drinks to Russia reduced slightly – down to 29.1%.
Share of whisky in total import volume of hard drinks increased from 16.3% to 21.8% in 2011. Share of cognac and other drinks based on grape wine showed practically no change. Russia imports hard drinks from all the parts of the world; however obvious leader here is Ukraine with its inexpensive mass alcohol; meanwhile European manufacturers like France and Great Britain with twice smaller import volume control almost by two times larger share in import value.
The largest importer of vodka to Russia in 2010 was “Image Holding” DP (Ukraine, TM “Khortitsa”, “Blagoff”) with about a half of total vodka import to Russia in volume. A quarter of vodka import to Russia was provided by “Ukrainskaya Vodochnaya Kompaniya (Ukraine Vodka Company) “Nemiroff” DP (Ukraine, TM “Nemiroff”). Other large importers were “Natsionalnaya Vodochnaya Kompaniya (National Vodka Company)” LLC (Ukraine, brands “Khlebny Dar (Gift of Bread)”, “Tselsij (Celsius)”, “Kazatskaya Rada (Cossacks’ Rada)”) and “Altia Corporation Finlandia” (Finland, brands “Finlandia”, “Koskenkorva”).
“Erevansky KVVK (Erevan Cognac, Wine and Vodka Complex) “Ararat” AOOT (Armenia) was the leading foreign supplier of cognac to Russia in the group of cognac and brandy with about 10% of import volume in the category in 2010. Second and third large importers of cognac were “Tessendier & Fils” (France) and “Erevansky KZ (Erevan Cognac Plant)” CJSC (Armenia). They were followed by “Vinno-Konjachny Dom (Wine and Brandy House) “Parakar” LLC.
“John Walker & Son Ltd”, “Chivas Brothers Ltd”, “Willam Grant & Sons Limited”, “Glasgow Whisky Limited” (Great Britain) – are the largest manufacturers of whisky supplying this drink to Russia. In 2010 “John Walker & Son Ltd” controlled about 13% of whisky import to Russia.
More than half of rum import volume to Russia was provided in 2010 by “Bacardi International Limited”. Second important foreign supplier in this category was “Captain Morgan Rum Company” with almost 15% of total import volume of rum. The two leaders were followed by “Corporacion Cuba Ron. S.A.” and “Havana Club International S.A.”.
Gin and juniper-flavored spirit drinks in 2010 were supplied to Russia by such companies as “James Burrough” and “Alexander Gordon & Co.” – almost 40% and 30% of import volume in the category.
Until 2008 Russian market of hard drinks demonstrated decline of sales in the category of vodka and liquors on the background of growing sales of cognac. In 2010 the category of vodka and liquors provided more than 90% of sales. According to “GRC’s” findings, in 2011 vodka sales saw slight year-to-year increase.
Total sales of hard drinks in Russia constituted about 170 million dal in 2010 with certain year-to-year decline in volume – declining trend has been observed on the review market since 2006. In 2011 sales of hard drinks saw slight growth in volume over 2010.
During 2005-2010 cognac sales were growing and sales of vodka and liquors were declining. This trend still continues.
In 2011 sales of hard drinks in Russia saw 4% year-to-year growth. According to “Global Reach Consulting”, during 2012-2013 sales of the review category will be increasing approximately at the same rate – by about 4% annually.
