A marketer has revealed the mystery of the alcohol market: why sales of vodka are falling and cognac sales are growing

Ruslan Bragin: “The target audience that consumes alcohol is being rejuvenated”

Russians continue to buy alcohol more and more actively, as evidenced by official statistics. Moreover, neither rising inflation, nor falling incomes, nor a permanently weakening ruble can break this trend. The only thing that changes is the demand for various alcoholic beverages. This year, sales of vodka have fallen slightly, but cognac sales have increased noticeably. What factors currently influence the alcohol preferences of Russians? Ruslan Bragin, a strong alcohol marketing expert and member of the Guild of Marketers, told MK about this.

Alcohol sales in Russia from January to August 2023 increased by 4.3% compared to the same period last year. Thus, sales of cognac increased by 10.7%, liqueur wines by 84.5%, and liquor and vodka products with a strength of over 25% – by 26.6%. At the same time, liquor and vodka products with an alcohol content of up to 25% became less popular – their sales decreased by 88.5%, and sales of vodka fell by 0.1%, Rosalkogoltabakcontrol reported.

– How can you interpret the latest data from the alcohol market regulator?

– I am always skeptical about statistics of this kind, but in this case I am ready to agree with the official data. Alcohol consumption always increases in society during periods of economic instability, crises, and uncertainty about the future. This is a protective reaction of consumers to stress. Therefore, sales of alcoholic beverages are growing.

– And more specifically, why have sales of cognac and liqueur wines increased the most?

– There can be many possible answers here. For example, the share of these drinks on the shelves has increased – therefore sales have also increased. There is another option. Each distributor has an active customer base. Let’s say you sold products to 500 stores, and sold to 750. The very fact of increasing the number of stores leads to an increase in sales. We must not forget about the error in statistics. But the exact answer to the question “why” will only be given by professional, expensive research, which is unlikely to be carried out by anyone now.

– Could demand be artificially stimulated?

– Quite. During the pandemic and lockdown, gin sales increased by 30-40%. This is confirmed by the EGAIS system. It turned out that this was the work of “brilliant” marketers who reminded consumers of one historical fact. In the 19th century, a malaria epidemic began in India, where British troops were stationed. Then the British officers gave the soldiers to drink tonic. It was not like it is now, but just like medicine. It contained astringent and tart quinine, which helped with illness. To sweeten the pill, officers added gin to the soldiers’ tonic. So it was thanks to quinine that it was possible to fight malaria. But the soldiers, returning home, began ordering gin and tonic in pubs. In the 21st century, this story was revived by comparing coronavirus with malaria. As a result, gin sales have increased significantly during the pandemic. This year there has been an increase in demand for liqueur wines and cognac. It cannot be ruled out that this excitement was created artificially.

– Well, why did sales of our national symbol – vodka – stall and even decline?

– Well, such a small decrease of a fraction of a percent is within the statistical error. But if we think more globally, then the target (that is, alcohol-consuming) audience is being rejuvenated. The category of people who prefer vodka is shrinking. The drink is no longer fashionable among the new generation and others are taking its place. There is a “migration” of consumers to other segments of the alcohol market. If earlier he chose from two or three brands of vodka, now he is looking, in particular, at the same cognac or whiskey, which is also showing growth in sales.

– Will alcohol consumption continue to grow? What drinks will be in greatest demand?

– Yes, in times of crisis people will consume alcohol, which functions as an antidepressant. My forecast: the growth in alcohol consumption in Russia will continue, but only slightly. Sales of whiskey, brandy and cognac will increase – both from the Russian Federation and from friendly countries. Vodka will continue to slowly lose demand. Another interesting trend is possible. Due to rising excise taxes on alcohol and critically slow wage growth, consumers will switch to more budget-friendly beverage options. If earlier, for example, he drank inexpensive Scotch whiskey, now he will switch to Russian bottling whiskey. If he drank French or Italian wine, he will now start consuming Georgian and Russian wine. But in general, alcohol consumption will definitely not decrease. It’s just that, for the most part, Russians will switch to budget analogues of their usual alcoholic drinks.