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RUSSIA: Downturn provides feast and famine for Russia's spirits - Research

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The global economic crisis has had a significant impact on the Russian spirits market, changing market dynamics and briefly halting the much-lauded premiumisation trend, according to recent research.

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A report from IWSR on Russia's spirits market, released this week, claims that the downturn has also led to disruptions across the supply chain, with many suppliers and distributors going bankrupt or halting production.  For healthier companies, however, it has presented an opening to establish their brands and take market share.

Imports have made a significant impact in Russia since the collapse of the Soviet Union and, although the market today is fairly saturated, there have been new brand success stories over the last five years for both local and imported brands.

Traditionally a vodka-drinking country, in recent years Russia has seen a boom in brown spirits consumption, especially whisky and brandy. But, while sales of most whisky categories dropped in Russia in 2009, low-priced whisky managed to buck the trend and continued to grow during the economically tough times.

Diageo's Johnnie Walker Red fell by over 27% in 2009 as Diageo temporarily switched its focus to its lower-priced White Horse Scotch brand, which grew by 29% in 2009, making it the top-selling whisky in Russia.

Many local brandies found growth during the crisis, meanwhile, while Cognac consumption plummeted.

The IWSR Spirits in Russia Report shows consumption of spirits in Russia broken down by category, local v imported and by brand. The report also includes on- and off-trade splits, distributor information, 2010 forecasts and pricing information taken from in-country store checks.


Sectors: Spirits

Companies: Diageo, Johnnie Walker

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