Whiskey went under vodka – Newspaper Kommersant No. 218 (7419) dated 11/24/2022

In the Russian whiskey market, where a niche of 1.5–2 million decaliters could have been vacated due to the departure of some foreign brands, competition is intensifying. A major vodka producer, Alcoholic Siberian Group (ASG), is launching its brands in this category; other players have plans for this market. Given the low loyalty to new brands, demand, as experts expect, will be stimulated by discounts.

ASG will produce whiskey at the Omskvinprom plant, Kommersant was told in the company. Elena Stolbovskikh, Chairman of the Board of the ASG, says that the license for production has been received, deliveries of distillates from Scotland and Armenia are expected, and bottling is planned to begin in December. In the first quarter of 2023, it is planned to produce 100 thousand decalitres of whiskey. ASG has invested more than 100 million rubles in expanding the capacity of Omskvinprom to 10.8 million decaliters per year. Whiskey from Scottish spirits should cost 1-1.2 thousand rubles, a drink in the middle segment – 500-600 rubles. for a bottle. Trademarks are at the final stage of registration and have not yet been disclosed.

ASG was engaged in the distribution of Scottish Whiskey Whyte & Mackay. But after the outbreak of hostilities by the Russian Federation in Ukraine and a new wave of Western sanctions, the supply of the drink from the country became more difficult due to the position of the Association of Scottish Producers. In addition, large whiskey producers from Ireland refused to ship shipments, and the United States stopped the supply of all alcohol to Russia. CIFRRA Director Vadim Drobiz estimates the volume of whiskey imports that fell at 1.5-2 million decalitres.

Whiskey production in Russia is growing. According to market participants, in January-October, the production of the drink increased by 24%, to 2.85 million decalitres year-on-year. The production of vodka, for comparison, grew by 8%, to 67 million decaliters, cognac – by 14%, to 6.97 million decaliters. Among the major competitors of ASG, whiskey production in the Moscow region was recently launched by Rust Group (vodka Russian Standard, Green Mark, etc.), which previously produced the drink in Scotland (see Kommersant on November 14). In 2023, Rust plans to produce 100,000 nine-liter boxes of whiskey.

Luding Group Marketing Director Andrei Ushakov says that whiskey sales are growing by about 6% yoy, the group has also begun bottling a drink from Scottish and Armenian distillates in the 600–700 rub segments. and 500–600 rubles. per bottle, respectively. The general director of the Crimean Vodka Company (KVK), Viktor Zlotnitsky, notes that whiskey production is profitable, but it is important to ensure uninterrupted supplies of distillates and invest in promotion, as the brands that left the market conducted powerful marketing campaigns. KVK has found a distillate supplier and plans to release whiskey in the second quarter of 2023, says Mr. Zlotnitsky.

Ladoga Development Director Dmitry Isachenkov points out that Russian whiskey is already well represented in the mass segment. Thus, sales of the Fowler’s brand in January-September grew five times year on year. And in the near future, a serious struggle will unfold among the new local brands of whiskey for the consumer, Mr. Isachenkov notes. According to him, brands allowed for parallel imports (Johnnie Walker, Jack Daniel’s, Bushmills, etc.) are a different price segment. The Beluga Group is also expanding the production capacity of Fox & Dogs flagship whiskey, plans to launch new products and develop imports in the category, the company says. In the ASG, in addition to their brands, whiskey from India will be sold in the Russian Federation.

Stanislav Kaufman, the owner of the Kaufman brand agency, says that in the whiskey and cognac categories, the reputation and history of the brand is important, and with restrictions on alcohol advertising, it is very difficult to promote new brands. According to him, sales will depend on the label and name, but more on distribution and price. Given the launch of many new local brands, manufacturers are likely to stimulate demand primarily with discounts, the expert predicts.

Anatoly Kostyrev