Ladoga will launch a new brand of flavored drinks

Large alcohol producers are looking for new niches in the segment of flavored drinks with an alcohol content of less than 40%. Ladoga will launch a new brand in the category based on rum distillate, the raw materials for which are supplied from Iran and Brazil, which should ensure low costs. The demand for such drinks is growing, but competition is also intensifying.

The manufacturer and distributor of alcohol Ladoga (Tsarskaya, Barrister, Fowler`s, etc.) will begin producing flavored drinks with a strength of 37.5% based on rum, a company representative told Kommersant. According to him, the line under the Cool Skeleton brand will include 16 flavors. Rum distillate is produced by a foreign partner using raw materials from Iran and Brazil, they say at Ladoga. In Ladoga Wine’s own retail network, drinks will cost 840 rubles. per bottle 0.7 l. By the end of the year, the company plans to sell about 300 thousand bottles.

As Ladoga notes, rum is one of the most popular bases for popular cocktails, and flavored rum drinks can be consumed as an independent product. Iran and Brazil are major producers of sugarcane and by-products, the company adds. Prices for raw materials for the production of rum distillates from these countries make it possible to maintain the availability of the drink at retail, explained Ladoga.

On the Russian market there are rum-based drinks with a strength of 37.5% with various flavors under the Dead Man`s Fingers brand from the British Halewood (Whitley Neill, J. J. Whitley, etc.). On the online showcase of “Crossroads” Dead Man`s Fingers costs from 1.89 thousand rubles. per bottle 0.7 l. Halewood did not answer Kommersant.

The head of WineRetail, Alexander Stavtsev, says that through flavored drinks, producers of strong alcohol are trying to attract a “new generation of consumers.” Cognac drinks with a strength of about 35%, launched in the wake of the popularity of similar Ararat (Pernod Ricard) lines, are showing good sales, he notes. Tinctures with a strength of 35% based on Kinovsky cognac were launched by Alvisa Group of Companies (see “Kommersant” dated October 31, 2022). No comment was provided there.

According to Alexander Stavtsev, the choice of rum distillate is logical, given the limited supply of whiskey and cognac spirits, which are more expensive. Secretary of the Alcopro guild Andrei Moskovsky says that in the case of rum, reliable and long-term supply contracts are needed. Iran and Brazil, he said, are “predicted suppliers of raw materials, while some producers from the Dominican Republic do not want to work under direct contracts with the Russian Federation for a number of reasons.” However, the expert notes, it will not be easy for a new brand to compete and the stated price may be high.

CIFRRA director Vadim Drobiz notes that Ladoga is probably seeking to expand its portfolio as much as possible before the IPO, which, as company president Veniamin Grabar reported, is planned for 2025. According to Mr. Drobiz, the share of young consumers who may be interested in flavored drinks will grow in the coming years. But the expert nevertheless sees the main potential in the market in the growth of vodka sales with a possible further increase in the living standards of the poor.

The Alcohol Siberian Group (ASG; brands “Five Lakes”, “White Birch”, “Husky”) confirm the trend towards the growing popularity of flavored drinks. For Husky vodka, the flavor line acts as a sales driver and the share of flavor positions under this brand is growing, they indicate. The ASG added that they plan to expand the production of Holy Gun flavored whiskey, Le Chocolate cognac liqueurs and Sibbitter bitters, and are also preparing to launch their own rum brand, where flavored items may appear.

According to NielsenIQ, rum sales in Russia grew by 8.5% in volume and 5.1% in value in 2023. The share of local manufacturers in the category over the year to September 2023 increased from 18% to 30.3%, analysts calculated.

Anatoly Kostyrev