August 29, 2008

Wine in Russia – Now Available

Research and Markets ( has announced the addition of the "Wine in Russia" report to their offering.

This Wine in Russia market report offers a comprehensive guide to the size and shape of the market at a national level. It provides the latest retail sales data, allowing you to identify the sectors driving growth. It identifies the leading companies, the leading brands and offers strategic analysis of key factors influencing the market - be they new product developments, packaging innovations, economic/lifestyle influences, distribution or pricing issues. Forecasts illustrate how the market is set to change.

Why buy this report

-Get insight into trends in market performance

-Pinpoint growth sectors and identify factors driving change

-Identify market and brand leaders and understand the competitive environment

Product coverage

-Fortified wine and vermouth

-Non-grape wine

-Sparkling wine

-Still light grape wine

Executive Summary:

Vodka Consumption Substituted by Drinks with a Lower Alcohol Content

Russia saw sales of traditional local favourite vodka continue to underpin a significant portion of total sales during 2007. However, although still dominating Russia's alcoholic drinks market, vodka has seen something of a downturn as a result of health conscious consumers migrating to drinks containing less alcohol, notably beer, which also benefited from aggressive marketing by the brewers. The same story was not the case over the entire spirits sector, with imported brands, notably blended Scotch whisky, experiencing solid growth.

Increased Health Awareness Influences Consumption

The emergence of an urban middle class attracted to prestigious Western spirit brands has driven demand for higher-priced imported products in Russia. For example, imports of rum, tequila and even vodka performed well over the review period. As well as a pull, there has also been a notable push effect, as Russia is increasingly becoming a focus for the geographic expansion policies of major multinationals, illustrated by blended Scotch whisky being the best-performing spirits type in 2007. Less glamorous domestic brands have had to fight more squarely with health issues in the media, as well as government-sponsored campaigns, which have served to change the way Russians view alcohol, particularly spirits.

Slow Recovery After the Crisis in 2006

The alcoholic drinks market in Russia is trying to recover after the crisis that occurred in 2006 due to the government's introduction of the new spirits control system and updated excise rates for all alcoholic products. Severe declines were witnessed in the import and production of wine and RTDs. The government's measures aimed against illegal alcohol sales had the opposite effect - creating a crisis in legal imports and production, and, consequently, losses in tax collections in the alcoholic drinks market in the late review period.

Market Dominated by Local Players

Despite ongoing consolidation activity through mergers and acquisitions, Russia's spirits market remained highly fragmented in 2007, due to the prevailing dominance of local products and the strength of local brands. Major local producers, such as Synergya ZAO, continue to appear among the leading players, while the leading global player, Diageo Plc, still holds only a very small volume share at a national level. That said, the presence of international brands and manufacturers was more keenly felt in 2007 as major players look to the developing Russian spirits market as a potential opportunity that is too good to miss.

Future Growth to be Fuelled by Products with a Lower Alcohol Content

The Russian alcoholic drinks market is forecast to see its growth constrained by health conscious consumers migrating to drinks with a lower alcohol content, as the dominant Russian vodka sees sales eroded by products such as wine, FABs and, most notably, beer. The dominant spirits sector is likely to contract, although, with the emergence of an urban middle class, prestige spirits, such as blended Scotch whisky, and fashionable drinks, such as tequila are expected to perform well in spite of the prevailing malaise. Premiumisation is also likely to boost value sales in brandy and cognac.

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Source: Euromonitor International