Cognac and vodka will go into cocktails

The sharp growth in sales of low-alcohol drinks stimulates the interest of players in this segment. Thus, the Crimean Vodka Company (KVK), a producer of Koktebel cognac and Medoff vodka, will start selling bottled cocktails in federal networks in the coming months, and next year it wants to launch a new brand in cans.

The Crimean vodka company plans to enter the federal market of low-alcohol cocktails, its CEO and owner Viktor Zlotnitsky told Kommersant.

According to him, in the coming months, chains will begin selling non-carbonated line in bottles under the Longer brand in several flavors.

Negotiations are at the final stage, he said. In addition, KVK plans to launch a new brand of cocktails in aluminum cans in 2023.

KVK manages a plant in Simferopol, which was previously part of the Ukrainian Soyuz-Viktan Group of Companies Andrey Okhlopkov. In January-July 2022, KVK was the sixth cognac producer in Russia (brands Koktebel, Krymsky, etc.), increasing the production of the drink by 57%, to 326 thousand deciliters year-on-year, follows from the data of market participants. It also produces vodka under the brands Medoff, Soyuz-Viktan, On Birch Trees, and Mirnaya. In 2021, KVK’s revenue increased by 16%, to RUB 3.25 billion, net profit was RUB 142.55 million.

Now KVK sells Longer cocktails in the Crimea. According to the company, in January-September 2022, 148 thousand decalitres of the drink were sold. In 2023, it is planned to ship at least 350 thousand decalitres, and in the next two years, to gain a foothold in the top ten most popular brands in the category, says Mr. Zlotnitsky. The planned retail price of Longer on the federal market is 95 rubles. per bottle 0.33 l. For comparison: Shake cocktails (Rust Group of Companies) are available on the Perekrestok online storefront for about 98–120 rubles. for a bottle of 0.33 l, Hooper’s Hooch (“Perspective”) – 109.99 rubles each. for a can of 0.5 liters. These companies did not provide comments.

According to Viktor Zlotnitsky, the demand for low-alcohol drinks is growing and the development of a line of such products will allow KVK to diversify its portfolio.

In 2021, sales of low-alcohol drinks in Russia grew by 25%, to 14 million decalitres, and the pace is increasing, he points out. According to NielsenIQ, in January-September 2022, sales of low-alcohol cocktails grew by 36.8% in volume and by 54% in monetary terms. For comparison: sales of all alcoholic products in physical terms increased by only 1%, in money terms – by 12.4%, brandy – by 5.9% and 13.3%, vodka – by 3.1% and 10%, respectively.

According to a Kommersant source in the alcohol market, the demand for Russian cognac is largely provided by budget products in the category up to 500 rubles. per bottle, and the cost of production is growing due to rising prices for raw materials, so manufacturers are actively looking for new niches. Another interlocutor of Kommersant in the industry adds that low-alcohol cocktails are not a super-profitable category, but it allows you to produce a large volume and compete normally.

Director of CIFRRA Vadim Drobiz predicts that this year sales of low-alcohol drinks can reach about 20 million decalitres, but he doubts that the segment will grow further. But, he adds, hard liquor sales are also unlikely to grow in 2023. Aleksey Nebolsin, a member of the Presidium of Opora Rossii, notes that the production and range of low-alcohol cocktails is still increasing, but the potential of the category has been largely exhausted. In addition, he points out, partial mobilization and the departure of some Russians abroad threaten to reduce the audience of consumers of such products.

Anatoly Kostyrev