Cognac is reduced in degrees – Newspaper Kommersant No. 202 (7403) dated 10/31/2022

The departure of flavored whiskey brands from Russia and the interest in making cocktails at home are stimulating brandy producers to launch new products. Alvisa Group of Companies, which bought the Kinovsky cognac brand, plans to start production of tinctures of the same name with a strength of 35%. The tinctures category is less competitive and more profitable, besides, the current growth in demand for cognac may be temporary.

The structure of a large cognac manufacturer Alvisa Group (brands Stareyshina, Kinovsky, etc.) filed applications with Rospatent for the registration of trademarks Kinovsky Rich Peach and Kinovsky Blended Coffee. The list of goods includes mixed alcoholic drinks and tinctures. We are talking about flavor tinctures with a strength of 35%, which will be bottled at the KiN plant in the Moscow region (formerly Usovskie wine and cognac cellars), Svetlana Yartseva, marketing director of Alvisa, explained to Kommersant. She did not specify the planned volume of production.

Alvisa Group is owned by Kamil Askenderov, whom the media calls the brother of Zaur Askenderov, ex-deputy of the State Duma from Dagestan, chairman of the People’s Assembly of the republic. According to Kommersant’s data from market participants, Alvisa ranks first in Russia in cognac production. In January-September, the company increased the production of the drink by 73%, up to 1.07 million decalitres. Another 622 thousand decalitres were produced by the KiN plant near Moscow, bought out by Alvisa in early 2022. Brand “Kinovsky” the group acquired a year earlier at the Moscow wine and cognac factory “KiN”.

According to Svetlana Yartseva, the new drinks are designed for a younger audience, and their launch is in line with the trend towards growing consumption of cocktails at home. Alvis notes that liqueurs based on Elderishina cognac already provide up to 5% of the brand’s total turnover. A Kommersant source on the market indicates that Kinovsky tinctures are similar to Ararat cognac drinks with apricot flavor and coffee with a strength of 35%. Owning the brand Pernod Ricard continues distribution in Russia, Kommersant’s sources add. Russia’s Pernod Ricard did not provide a comment.

Stanislav Kaufman, owner of the Kaufman brand agency, says that turning a well-known brand into an umbrella brand for related categories can attract new consumers. And the cost of tinctures at 35% can be lower than that of classic brandy, he adds. Alexander Stavtsev, head of the WineRetail information center, adds that the consumption of liqueurs is growing faster than the demand for cognac, and this is a less saturated and competitive segment. According to the Unified State Automated Information System, in January-September 2022, retail sales of cognac increased by 3.7%, to 8.81 million decaliters, and alcoholic beverages with a strength of 25% or more, which include tinctures, by 27.3% , up to 7.95 million gave. According to a Kommersant source in the market, retail sales of only tinctures are growing by about 20% year on year.

Beluga Group has recently released a brandy tincture “Gold Reserve Apricot” and plans to expand the range. According to the representative of the group, tinctures are a more profitable product than vodka and cognac, and consumers are awakening interest in experimenting with such new products. Dmitry Isachenkov, Development Director of Ladoga, says that the company is trying to fill this niche in the conditions of the departure of world producers of flavored whiskey. According to him, Fowler’s flavored whiskey, flavored versions of Tavern Hound bourbon have been launched, and 16 different flavors of Tsarskaja vodka are planned to be launched. Elena Stolbovskikh, Chairman of the Board of the Alcoholic Siberian Group (ASG), says that all the new products of the ASG are among the flavored drinks: Sibbitter Wild Cola, Honey Tabasco, Five Lakes balm, etc., and new products are also planned to be released.

According to CIFRRA director Vadim Drobiz, the vodka and cognac markets have been stable until recently, and their current growth may end as early as 2023, because producers are also interested in other niches.

Anatoly Kostyrev