Simple Group launches vinotheque format specializing in premium Russian wines

In the context of the growing popularity of Russian wines and a possible increase in import duties on foreign products, the major importer Simple Group began testing the format of wine cellars with a focus on local assortment. The first point, where 70% of the shelves were occupied by Russian wines, opened in Krasnodar, they plan to scale the project through a franchise. Market participants do not see the prospects of the format in all regions, warning about the limited range.

Simple Group is launching a vinotheque format specializing in premium Russian wines, Kommersant was told in the group. The assortment of the first point in Krasnodar consists of 70% of local wines “Galitsky & Galitsky”, “Valley of Lefkadia”, Loco Cimbali and others at prices from 790 to 5.59 thousand rubles. for a bottle. The rest is occupied by imported wines, spirits and soft drinks. In the Krasnodar Territory, the demand for Russian wines is higher than in other regions, so it was decided to launch a pilot project in the south, explains Vice President of Simple Group Anatoly Korneev. According to him, now the group is preparing a large-scale franchise project for the development of Great Russian Wine by Simple wine cellars.

Simple is one of the main wine importers in Russia. According to Kommersant’s data, in January-April 2023, it imported 4.9 million liters of still and sparkling wines, which is 2% more than a year earlier. The SimpleWine wine cellar network includes more than 70 points in Moscow, there are facilities in other cities. In 2022, the revenue of Simple Company LLC increased by 11.9%, to 22.93 billion rubles, net profit was 1.51 billion rubles.

In the standard SimpleWine wine cellars, Russian wine occupies about 10% of the assortment, which corresponds to Simple’s share in the turnover, the group says. The prerequisites for launching the format with a focus on local wines were the emerging demand, assortment and growing consumer interest in Russian winemaking, they note. In June 2023, sales of local wines at Simple grew by 25% in money terms and by 16% in units year-on-year.

According to the results of the first half of 2023, the production of all wines in the Russian Federation decreased by 3.55% year-on-year, to 190.85 million liters, according to a review of the Wine Guide of Russia by Roskachestvo. In general, the production of inexpensive wines by enterprises outside the large viticultural regions is reduced, and the total range is expanding over the year, experts say.

Alexander Stavtsev, head of the WineRetail information center, says that Simple is likely taking into account the changing agenda regarding imported wines, for which duty increases are being discussed. The company has collected a good portfolio of Russian wines, but it is unlikely that all the names will be enough to fill a large wine cellar, so if we focus on the local assortment, we can talk about more compact objects, he notes.

Fort Executive Director Alexander Lipilin says that a wine cellar dedicated to Russian wines may be a relevant project, since the segment and interest in it is actively growing, including thanks to state support. Ladoga President Veniamin Grabar points out that Simple used to focus on imports, but now local wines account for 70% of sparkling wines and 60% of still wines on the Russian market. In the wine cellars of Ladoga Wine, adds Mr. Grabar, the share of Russian products on the wine shelf has quadrupled since the beginning of the year.

Luding Group Executive Director Ernest Khachaturian believes that the wine cellar format with a focus on Russian wines will be more promising in the regions where wine is produced, as well as in Moscow and St. Petersburg. You will have to compete with wineries, alcohol stores and wine bars, where there is already a wide range of Russian wines, he adds. Pyotr Romanishin, CEO of Fanagoria, points out that for the time being Simple works with Russian wineries only on an exclusive basis, therefore the assortment of wine shops with Russian wine will not be diverse.

Anatoly Kostyrev