Vodka was put in its place – Kommersant

In the first quarter of 2023, the leader changed in the list of the largest vodka producers in Russia. Tatspirtprom, owned by the government of Tatarstan, took first place in terms of volume, while Beluga Group, which reduced output by 11% yoy, fell to second place. The decrease in production for companies may be due to the high base of the first quarter of 2022 and restrictions on the export of vodka from the Russian Federation. At the end of this year, major players still expect to show an increase in volumes.

Owned by the government of Tatarstan, Tatspirtprom took first place in the production of vodka in Russia, ahead of the Beluga Group in the first quarter of 2023, follows from the data of market participants available to Kommersant. In January-March, Tatspirtprom (brands Tundra, Russian Currency, Khanskaya) produced 2.05 million deciliters of vodka, up 8% year-on-year. At the same time, the Beluga Group (Beluga, Belenkaya, Myagkov) reduced vodka production by 11%, to 1.96 million decalitres, year on year. The total production of vodka in the country during this period decreased by 8%, to 15.8 million decalitres.

In other major players, the production of vodka in January-March also decreased in annual terms, follows from the data available to Kommersant. Thus, the Alcoholic Siberian Group (ASG; Belaya Birch, Five Lakes, Husky) reduced the production of the drink by 16%, to 1.33 million decaliters, relative to the first quarter of 2022, Traditions of Success Group (Khorta) ) – by 21%, up to 1.28 million dal, GC “Rust” (“Russian Standard”, “Green Mark”, “Parliament”) – by 27%, up to 1.23 million dal. The fastest growing among the 20 factories was the Kaluga “Crystal”, increasing the production of vodka by 71%, up to 346 thousand decalitres.

Beluga Group did not provide a comment. The group previously explained that the results of the first quarter of 2023 were affected by abnormal shipments in March 2022 associated with political events. Tatspirtprom says that in January-March of this year, the Russian vodka market did not grow due to the high base of 2022 and poor performance this March. For Tatspirtprom, the growth in the category was provided mainly by the Tundra Authentic and Khlebnaya brands, whose shipments increased by 54% and 16%, respectively. In the ASG, the year-on-year reduction in vodka production was explained by the rush demand in the first quarter of 2022, when the chains filled the shelves, and buyers made purchases for the future.

Traditions of Success says that the need to launch new brands affected the decline in vodka sales, after Global Spirits withdrew licenses for the production of Khortytsya and its other brands on February 24, 2022. In addition, the group reduced investments in promotional vodka brands, directing funds to the production of new categories and the development of a cognac assortment. Ladoga Development Director (Tsarskaya brand) Dmitry Isachenkov also says that the company’s production plans in the first quarter were focused on gin, whiskey, liqueurs and tinctures. But sales of Tsarskaya in the first quarter grew by 45% year-on-year, he emphasizes. Kristall plans to enter the top ten vodka producers by the end of the year.

Director of TSIFRRA Vadim Drobiz says that the reduction in vodka production is due to the large stocks of the drink that remained after a sharp increase in output in the second and third quarters of 2022. In addition, export restrictions can affect the dynamics, he adds. After the outbreak of hostilities in Ukraine, the main importers of Russian vodka – the US and the EU – banned the import of the drink from the Russian Federation. On the impact of Western sanctions on production volumes previously said and in the Rust Group. Beluga Group sold the rights to produce Beluga vodka outside Russia to the Noblewood Group, headquartered in Montenegro, due to export complications.

The Stellar Group (Veda brand) predicts an increase in vodka production by about 1% this year. According to the group, retail sales of vodka are growing, additional demand will be provided by new regions, as well as exports to alternative foreign markets. In Stellar Group, in particular, some countries of Africa, Central Asia, Transcaucasia, China and Israel are considered among the promising ones for export. In addition, they are waiting for the launch of vodka brands in other price segments.

Tatspirtprom says that the focus of the consumer has shifted from vodka in the minimum retail price (MRP) segment to the economy segment due to an increase in the MRP from 261 to 281 rubles from 2023. for 0.5 l. The main competition is in the middle and economy segment, but premium brands are also showing growth, they say. The ASG expects to show an increase in the vodka category by 10% in volume due to premium segment brands. Traditions of Success is also planning to launch two new premium vodka brands.

Anatoly Kostyrev