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Author: Anton Moiseenko

Wine Report Russia / Articles posted by Anton Moiseenko

The sad story of wine communications in Russia

Let me be clear — we, Russians, are not great communicators. At least, we are not great wine communicators. I am not talking about the “blogger” thing. If you as a wine trading company have 1500 SKUs in your portfolio, what else are you left to do than to communicate the hell about it? But, in fact, there’s no such understanding in modern Russian wine importing and distributing companies. Ain’t that a shame?

The reasons behind this (as I see them) are a mix of tough wine market regulations, the historical nature of alcohol related business (trading alcohol has always been a kind of grey area, high-margin, easily manipulated by specific officials to squeeze out a bribe). Wine has a long way to go before it stops being considered just another type of “alcoholic drink”. Because everything that is an alcoholic drink has to be severely regulated, because, from the Russian official’s standpoint, it’s bad for your health.

Of course, there’s a fair share of hypocrisy here: most officials are drinking expensive wines, at the same time explaining the normal folk, how bad it is for their health. That’s because they don’t have to count the money they spend on it. Now think — if a common Moscow salary is around €1,300/month, how much wine will you be able to consume?

Yet, there’s maybe a 5-10% of people out there who actually can be interested in wine and knowing more about it. How come our wine trade treats them so poorly?

Let me explain: when I say “poorly” I mean these things:

1. Lack of attention to wine consumers. It’s everybody’s problem in this market. All these CEOs and marketing directors seem to be born in the XIX century. In many cases companies boil their communications down to publishing rating and event reports, interesting too nobody, of course. It’s done to state: marketing department is doing SOMETHING. “We have no idea why, and what on Earth for, but we are doing it”. Brand-oriented content? With 1-2 rare exceptions (in Moscow and Saint-Pete there are approx. 30-40 wine importers) it’s not happening. And even if it’s happening, it’s hard to read through this drivel.

2. Underestimation of wine complexity.

The wine world is so damn interesting in big part because the wines are so different, so complex and interesting. It’s rarely understood that wine is more than a number of specific technical characteristics that you can happily pour down your consumer. Attention to wines’ details is extremely rare in Russia.

3. Underestimating the power of proper communications in wine marketing.

There’re many people in the wine trade in Russia who have little understanding and use of modern media channels — be that social media, newsletters, live coverage, videos or anything else. These dinosaurs are coming from the past and you can see them when you’re facing them. They are slow, they are dull, they are boring, they wear you out with their lack of enthusiasm and with focus on prices, money and milking the EU funds for OCM. “Of course, we need your marketing budget!” Will this budget ever be spend on anything good? No way.

4. Being unoriginal in communication.

Even if companies try to speak to their clients, they normally fall into boring wine descriptions, uninspiring and obviously fake adoration, unoriginal social media posts and boring events. The goal is, again, to show that they are doing something. If only anyone cared.

5. Unwilling to invest into high-end specialists

It’s maybe a result of a lack of proper education and marketing traditions in this country where the wine importers’ owners often come from the Soviet past where wine was a part of the producers’ market. Today the market is a consumer market, but the owners are still back there, in the Soviet era. There’s probably a couple of examples of bright and forward-thinking communications amongst wine businesses in Russia. One or two, just consider that. When companies are lucky enough to have great specialists, not many of them care to keep them or promote them to higher positions. Many think it’s better to higher a stranger form the FMCG business, than look at their own staff. Well, that’s expected.

Is there hope for the better future of the communications in the Russian wine trade? I believe it’s a generational thing as well. As soon as current business owners pass their business down the younger generations or younger people become the owners, we should expect some changes. Until then — wineries should take their communications in Russia in their own hands.

There’s no app for that, but there’s an article 🙂

Looking for a wine importer in Russia: 2019-2020 outlook

Moscow wine scene (and St.Petersburg’s, for that matter) definitely feels different from what it used to be just 3 years ago.

There’s a new breed of younger people to start and they are now managing fashionable venues and funky wine lists. The lists have evolved themselves: there are much more unfamiliar names in there. Chances are that if you go to a newly opened hip place you won’t recognise 50% of wine producers on the list (at least!). Unless you’re a professional, of course, having all these biodynamic and natural wine producers’ names on the tips of your fingers. And it’s not just talking – the wines really sell. Take pet-nats (Pétillant Naturels) — these easy, low-alcohol wines sell like hot cakes today.

With this in mind it became both harder and easier to find a wine importer in Russia. Easier because there are more smaller importers. Easier because many retailers and even restaurants started importing wine themselves. Easier because people are more price sensitive rather than brand-driven today. It’s actually a kind of a mauvais ton to even ask for these commercial brands. Among specific audience, of course.

It also became harder — the consumer buying power is not going up en masse, so it’s mostly bad news for big producers who have to push volumes. Price sensitivity is hilarious — the importers will squeeze you till you bleed (many people are quite happy about been squeezed, I must say).

That said, for many wineries from different countries Russia has in the recent years become a major market. It really moves me to hear that kind of news.

Importers landscape

Historically wine importers in Russia are balancing between the bad and the worst: market regulations are not a piece of cake here. The alcohol-related laws inside the country are not very nice for business. Nevertheless companies with the right attitude tend to deal with these circumstances and take this market’s volatility well. If runner’s idioms are close to your heart, this is, like, endurance building. Iron Man of a kind.

There has been a significant shift in wine importers (distributors) game in 2019. Big brands have been changing hands a lot, especially due to larger vodka-related companies coming into the wine-importing and distributing game. Take a look at Beluga Group and Ladoga Group — they are two good examples. Offering a lot of shelf power, they are not the same in HoReCa presence, clearly there’s a different strategy. Beluga has swiped brands like Torres, Masi and (speculatively) could get Antinori, which has been stuck with MBG Impex for many years now. Others, like Roust, Inc (the Russian Standard division) has lost its wine power altogether.

On the other side of the spectre there’s a trend of emerging small-scale importers operating with small teams of 5-10 people. These companies are able to deal with niche brands but also — with quite established names like Gosset in Champagne or AdVini’s Maison Champy in Burgundy. There’s definitely a HoReCa trend of increased interest in Grower Champagne. We will see, how far it goes in 2020.

Restaurant market

Both Moscow and Saint-Petersburg are dominated by successful restaurant groups — but this is changing too. Some of them, like the Novikov Group, Dellos Group, Ginza Group, Alexander Rappoport’s restaurants and others, are quite old, while younger and trendier examples include White Rabbit Family, Perelman People, Twins Group and Probka Family. Most groups have a chef-sommelier overseeing the overall concept of the group; Ginza, Dellos, Perelman and Twins are managed this way. Others, like Novikov Group and Rappoport, give more autonomy to each individual restaurant.

Restaurants in general has become less pretentious. There’s more life in them. Wine bars are opening (and closing) every day. And the wine lists are way more interesting.

For wineries this situation means one thing: there are plenty of top brands in the market, that don’t have a good representative. Many wine brands are looking to find new importers. Wineries drop those importers who can’t pay anymore, they drop those who fail to deliver even the bare minimum of what they’d promised. As one major distributor told me in a private conversation: “You can’t imagine what kind of wineries I’m talking to. It’s all top wineries looking for a good distributor”.

The strategies

One thing for sure — one has to understand what they want and what kind of distributor they need. Cold-calling the landlines and sending e-mails are good old tricks that don’t really trick anybody anymore. You can’t spend time on that if you don’t know the players personally. Of course, I’m talking less known wineries. Or wineries that need, mostly, off-trade sales. HoReCa is getting really small and really busy with competition. On the positive side — HoReCa needs value wines more than ever. What’s value in Russia these days? Depends on the city greatly — Moscow prices being the highest, but Russian regional cities are poorer in every aspect.

If you’re a winery that doesn’t need to push millions of bottles, you’re in better position as of today. Moscow and Saint-Petersburg are two major cities to focus on with occasional visits to Ekaterinbug, Novosibirsk, Rostov and others. It’s all perfectly good.

Anywhere from 2,000 to 5,000 RUR (€26-€66, at the rate of 75 RUR/€) can be considered “value” in today’s restaurants, depending on their concept. I’m talking about the final price in the wine list. Consider your ex-cellar price multiplied by 3-5 times and then multiply this by 2 to get an idea of how much your wine will cost in Russia.

Strategical thinking is important in Russia — especially when the market is volatile and fragile like today. It can drive your sales if you pay proper attention to it. Visiting every two years? Forget about it, this market doesn’t tolerate that.

Is it worth taking part in wine exhibitions in Russia?

Yes — Vinitaly is out there for you getting better and better, not so much for Gambero Rosso, which is, honestly speaking, a mess. I’ve been there, I know. Still, you’re lucky if you’re an Italian winery. Yes, there’s more competition in some segments, but trust me, there’s a lot of soul-searching about even the basic things like Piedmont and Tuscany. Prosecco I’d call the hardest and most competitive category of all.

Portuguese wineries now have an annual Wines of Portugal event that takes place in April. German wineries have several events during the year now, with Wines of Germany back on the market. For French wineries not so much choice, unfortunately, but some French tasting do pop up here and there. Still, French haven’t been great promoters of their wines in Russia during the last several years.

Getting to participate in exhibitions doesn’t get you to your goal if you don’t work hard before and during the event. Promoting the winery before the event is vital — articles and buzz help to inform the trade, so they know what they are facing even before they arrive. From personal experience, it’s been doing magic: sometimes one publication is enough to get noticed.

Advertising and promotion options

Wineries have abilities to promote the wines via professional channels (tastings, trips to wineries), but, as one can imagine, those are limited by number of people that can be invited to such events and by the focus of wine importer, who has many brands to manage. What are the options then, to promote better and increase brand recognition?

  1. Creative independent content: articles, interviews, localised videos — all of this is possible with people like me. Honestly, not so many independent people share interesting and original content these days. Most people are stuck in their Facebooks and Instagrams, avoiding interesting thoughtful texts that conveys the image of wineries, their people and wines.
  2. Sommeliers in social via events. This normally works when importers bring you a group of their clients. But even here, the communication is normally limited to standard selfies with winemakers and bottle shots, fast decaying in the social media content roll.
  3. Opinion leaders in social media. It takes time to work out a program for such people: fist, you have to identify them. True, they can bring a lot of value to the brand, but the program has to be very carefully managed.
  4. Wine exhibitions. Arguably more important for those who are looking for importers than for those present in the market. There aren’t so many of them: Vinitaly, Gambero Rosso, SoloItaliano, Prodexpo, MetroExpo (only for Metro Cash and Carry clients), Guia Penin tasting, Spanish Wine Salon, Wines of Portugal and Wines of Germany yearly tastings (from 2018 and 2019 respectively). There are some smaller events too, for regional appellations.

Questions, collaboration inquiries? Reach out on LinkedIn or e-mail me here anton.on.wine (at) gmail.com

6 reasons for wineries to embrace Russian language communications

It is surprising — in the era of digital communications, social media and bloggers — to see how little attention wineries and wine promotional bodies actually pay to communicating in local languages. Sure, it’s not always easy to find resources to manage multi-lingual content and activities, but just thinking about the advantages it brings makes it clear: communicating locally and in local language is a must if you want to grow your business.

One would say: why would I invest my time and budgets into tasks that are perfectly (or, at least, fairly well) managed by my wine importer or distributor? Well, let me walk you through just 6 considerations.

1. Wider coverage: Russian is spoken all around in the Eastern countries

Sometimes exporters don’t get it: Russian language is the official state language of several countries with growing wine culture. Belarus, Kazakhstan, Ukraine, the Baltic countries, Tajikistan, even Georgia — all use Russian language — some, as official language, others as historical part of culture. Russian-language communications will go across border, especially, if managed correctly. Wineries that have enough muscle to manage different markets will certainly benefit from singular information flow.

2. Russians speakers don’t really engage with English

Talking to Russian sommeliers and trade might give you an impression that everybody can speak English here. For example, the winery is already running a global communication hub for international consumers, probably, in English. Will that be enough for Russian speakers? Let me break it out to you: even big cities’ professionals prefer mother tongue — to share, comment and engage. You are not going to get any substantial engagement from non-Russian communications, period.

3. Being INsider, not OUTsider

It’s not only about speaking Russian, it’s also communicating from within the Russian realities. Being outside and trying to be sociable won’t work here — creating content, that is local to local people, is essential for any wine brand. Despite the borders between Russian-speaking countries, we more or less feel the brotherhood and the same continuity to our cultures. Seeing a Kazakhstan sommelier talking about a wine bottle generates much more response than about any “western” national. Maybe it’s a matter of cultural closeness, language unity or something else.

4. More loyalty

You can’t really engage with wine drinkers unless you’re visiting your markets. It’s a kind of respect to people who drink your product. Gone are the days when winemakers could sit calmly at home and hope to sell the wines 5,000 km away. Same goes to communications. Talking in the language of your consumer is a part of basic respect and positive attitude. People who try to speak Russian get more sympathy than those who live here without taking any notice of the surrounding culture. In other words — Russian language generates more loyalty and trust to the brand before you even start producing the whole sentences. Professionals, too, might perceive your brand as big and faceless — unless they have a chance to meet you in person.

5. Better understanding of local markets with better feedback

Last but not least: will it surprise anyone if you start understanding the market better when you communicate in the local language? Your feedbacks will be realistic, your sales will consequently grow at another pace, your experience with the Russian-speaking markets will eventually go level up. What do these people want? What do they feel when they drink your wines? How should you adapt your international strategy to Russian-related markers? Those will be the questions you will probably get the answers to — and pretty quickly.

6. Using promotional materials across different markets

Of course, it’s when the economy of scale kicks in. Once translated all your information into Russian you can freely use it for a dozen of different markets — be it wines’ technical sheers, historic overview, news and presentations. Does this mean you have to constantly manage the Russian language information flow? Yes. Does it require substantial amount of work? Well, it depends on your managerial skills. In my humble opinion pushing the same international content to 50 different markets is a waste of time.

And money.

Creating engaging wine content for Russia

If you think that wine communications in Russia are a hard thing to do, you’re probably not right. There are some obstacles, but understanding them means better work in this volatile, but attractive market.

Oh yes, there’s a language barrier. When I start thinking of it, it turns out to be a huge problem. Wineries have no idea what their importers write about them, nevermind the auto-generated translations by Facebook and Google, they really work poorly with Russian language.

There’s another problem with communications in Russian: generally our companies don’t invest in professional writers and copy. Marketing communications is so poor, that reposting international scores is the most common way of communications. Other things include: boring Facebook posts, web-site publications that lack style and proper grammar (obviously good Russian gets harder and harder for people to learn), terrible connotations and attitude to consumers as to stupid kids. Forget depth, forget interesting questions in the interviews. The search for quality writing is nonexistent.

Importer’s web-sites in general are full of useless information put in boring Wikipedia writing with fake emotions of a 19 year old TV-star. Besides, you will discover that many importers don’t even run decent web-sites, stuck in development for years, not able to convince the business owners that it’s something of a necessity. 95% of wine import owners think that communications is simply not important. Exceptions are 1-2 companies of 40-60.

Wineries are left with little choice: you work in Russia, you leave this to the importer. You can’t even advertise your winery with proper journalists — since 2013 alcohol advertising ban, most magazines became too scared to write about wine and, especially, brands.

So, what is left for wineries who need better exposure in the market? Let me lay out your options

  1. Bigger wineries. It makes perfect sense to create their own content and communications in Russian language, connected to wine importer, but independent in its management and content generation. Some might see it as micro-managing things, but if you consider for a moment that Russian language is spoken in much wider territories than Russia itself – Ukraine, Baltics, Kazakhstan, etc – you will rethink. It’s not a bad idea at all to have your web-site’s Russian version to be the first thing seen by Russian consumers looking for your wines on the Internet. Search engines (like Yandex.ru) crawl international web-sites and are the major source of search traffic here. For importers it’s also nice to have an independent source of official information in Russian language. Controlled by the winery, this content is easily adjustable, updatable and can be shared across the world. I’m not even mentioning work like wines’ techsheets translation, ready to roll to importer and everybody who might be interested in them. Social media is another crucial thing for bigger wineries — importers are too busy and (as mentioned earlier) don’t have professional people to commit to such projects.
  2. Medium-size wineries. Of course, it all depends on the importer and the focus you want to have on the Russian market. Experience clearly shows: wineries who work in Russia, have extensive communications and come to visit the market often, 2-3 times a year. For these wineries it’s important to do things like promotional articles, winemaker/owner interviews, etc.
  3. Small and boutique wineries. Crucial to tell interesting stories and mostly do the same as medium-sized wineries. It will probably not increase the sales due to already limited quotas for Russia, but will generate important interest from the target audience.

Advertising and promotion options for everybody:

Wine importers have abilities to promote the wines via professional channels (tastings, trips to wineries), but, as one can imagine, those are limited by number of people that can be invited to such events and by the focus of wine importer, who has many brands to manage. What are the options then, to promote better and increase brand recognition?

  1. Creative independent content: articles, interviews, localised videos — all of this is possible with people like me. Honestly, not so many independent people share interesting and original content these days. Most people are stuck in their Facebooks and Instagrams, avoiding interesting thoughtful texts that conveys the image of wineries, their people and wines.
  2. Sommeliers in social via events. This normally works when importers bring you a group of their clients. But even here, the communication is normally limited to standard selfies with winemakers and bottle shots, fast decaying in the social media content roll.
  3. Opinion leaders in social media. It takes time to work out a program for such people: fist, you have to identify them. True, they can bring a lot of value to the brand, but the program has to be very carefully managed.
  4. Wine exhibitions. Arguably more important for those who are looking for importers than for those present in the market. There aren’t so many of them: Vinitaly, Gambero Rosso, SoloItaliano, Prodexpo, MetroExpo (only for Metro Cash and Carry clients), Guia Penin tasting, Spanish Wine Salon, Wines of Portugal and Wines of Germany yearly tastings (from 2018 and 2019 respectively). There are some smaller events too, for regional appelations.

The wine writing landscape is quite limited with some reference web-sites and wine magazines including:

  1. ByTheGlass (Independent). My web-site that I have been running for the past several years. Targeted at pros and trade across Russia and CIS, but also at people who likes entertaining wine texts and videos.
  2. ItsMyWine. Belongs to an important wine trader MBG Impex and used mostly as its marketing and PR arm. Still, has some reach.
  3. Simple Wine News. Probably the oldest wine magazine in Russia. Has a lot of limitations and interest conflicts due to the ownership by a wine importer. Has a print magazine.
  4. Invisible. A very interesting project targeted at selling wine, but with some quite engaging articles, design and a strong social media following.
  5. SpazioVino and VinoItaliano (Independent). Both focus on Italian wines, a lot of information, but the overall quality is quite poor in terms of journalism. Both share terrible outdated designs as a feature.
  6. Wine Report Russia. This is my web-site where I put up only my English language articles.

So how is it possible to set up a communications plan?

  1. Do it yourself. Study the market. Get to know the key people, meet and discuss even before you start working here.
  2. Work closely with your importer. Demand very certain things in terms of communications. Demand an annual plan. Work to propose some activities to gather more following in Russia.
  3. Outsource. The importer is busy? Unresponsive? Not focused on your brand? Outsource your communications work. Work with local people. Do your own tastings and social media. Work with journalists directly.

There are endless possibilities to control the winery’s communications and reaching out to winder audiences — they require a good knowledge of the market to

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Ninja wine distributor search in the falling Russian market

Earlier this year I was writing about the perspectives of those willing to find an importer and distributor for their wines in Russia. There’s an important update to that information.

It so happens that the political games Russian government plays to control its population and support their wellness and status quo require the economy to be… well… in deep shit, to put it mildly. This is why we are not going to see Russia as a truly emerging wine market in the nearest future. We are not going to compete with leaders of wine consumption. We are going to continue to drink cheap vodka and cheap wine.

So, you might ask, why all that writing of yours about the “new Russian wine consumer”, importers and all that? Why even look for a distributor in that market? And this is tricky: you will be surprised to hear that in the falling market many wineries manage to sell a lot. And even grow. I have facts to substantiate that. Wine promotional bodies from different countries see the falling volumes but growing average bottle price for the wines sold in Russia.

As an export manager (whom I mostly have in mind when I write my market reports and articles) you might find yourself in an impossible situation — high market volatility, a lot of cultural confusion (“those Russians never reply my emails!”). Well, guess what, I don’t think they’re intrinsic features of this wine market. Not really. It’s a system feature imposed, not developed. Wine importers operate balancing between the bad and the worst. Market regulations are not a piece of cake, you can trust me on that. The alcohol-related regulations inside the country are terrible for business. This is not to say everybody is good, everybody’s having good business ethics, but that’s merely a result, not a desire. Try to understand what’s happening here. In the end of 2018 the sales of everything are not looking bright. It’s not even 2017 in comparison.

A bright side is that wine drinking cannot be stopped. Many finest wine drinkers fled the country in years after 2014 and the ongoing Crimea situation. They are not drinking wine here anymore. Those who remained are drinking cheaper wines, no more oligarch sales at large. Forget it.

For wine exporters it means another thing: there are plenty of top brands on the market, that don’t have a good representative. Many wine brands are looking to find new importers. They drop those who can’t pay anymore, they drop those who fail to deliver even the bare minimum of what they’d promised. As one major distributor told me in a private conversation: “Anton, you can’t imagine what kind of wineries I’m talking to today. It’s all top wineries looking for a good distributor”.

This got me to thinking: what would be a good strategy for this market?

To quit? Not to try? To focus on other markets that are in better shape? There’s no universal answer, you imagine. It all depends on how big you are, how famous you are and what you want. And on the fact if the wines are actually good and… worth the price you ask.

So what’s the right strategy in such a complex environment? One thing for sure — understand what you want and what kind of distributor you need. Cold-calling the landlines and sending e-mails are good old tricks that don’t really trick anybody. You can’t spend time on that if you don’t know the players personally. Of course, I’m talking less known wineries. Or wineries that need, mostly, off-trade sales. HoReCa is getting really small and really busy with competition. But — on the positive side —HoReCa needs value wines more than ever. What’s value in Russia these days? Depends on the city greatly — Moscow prices being the highest, but regions are poorer in every aspect. Anywhere from 2,000 to 5,000 RUR can be considered “value” in today’s restaurants, depending on their concept. Remember, I’m talking about the final price in the wine list. Consider your ex-cellar price multiplied by 3-5 times and then multiply this by 2 to get an idea of how much your wine will cost in Russia.

Back to distributors: mind you, there are new distributors too, that are most probably not on your radar until you start digging your self or with someone’s help. From personal experience I can say that a good deal (which means, finding an importer) can be as a gust of wind. Here it was, your chance, and now it’s gone, they made a contract with another one.

Is it worth taking part in wine exhibitions?

Yes — Vinitaly is out there for you getting better and better, not so much for Gambero Rosso, which is, honestly speaking, a mess. I’ve been there, I know. You’re lucky if you’re an Italian winery. Yes, there’s more competition in some segments, but trust me. there’s a lot of soul-searching about even the basis things like Piedmont and Tuscany. Prosecco I’d call the hardest and most competitive category of all.

Portuguese wineries now have an annual Wines of Portugal event that takes place in April. This year it was oddly coincident with Vinitaly in Verona, not a good choice of date, but we keep fingers crossed for them to be smarter 2019. For French wineries not so much choice, unfortunately. There’s nothing out there to be a part of.

Getting to participate in exhibitions doesn’t yet get you to your goal — if you don’t work hard before and during the event. Promoting your winery before the event IS vital — articles help to inform the public (and I’m talking professionals), so they know what they are facing even before they arrive. From personal experience, it’s been doing magic: sometimes one publication is enough to get noted.

Life doesn’t end with exhibitions, though

Ninja search starts with contacting the locals, the aborigines, in other words, the Russians. Finding ways to send samples and deal with importers on individual basis. Until recently I considered sending samples to Russia impossible. Luckily there are ways to deliver to Moscow. So: send 3-4 cases of wine to your agent and.. get to work.

Systemic and rigorous approach is the one yielding real results.
Anton Moiseenko, December 2018

Photo credit: © Anton Moiseenko

Questions? Reach out: anton.on.wine /at/ gmail.com

Also, read this on LinkedIn

Russian wine tastes are changing

Talk to a Moscow-based hip sommelier or a high-end wine trader and they will use words like “pét-nat”, “orange”, “Spätburgunder”, “Pinot Blanc” and so on. Soldera and Gravner sound like they’re the go-to names for the whole of Italy. Then, take a look at what people are actually drinking – and it can be quite different.

With the Russian economy in crisis, belt-tightening can be felt across the country. Surprisingly, that doesn’t mean wine sales are down: in some instances, things have become even better. Professionals across the market indicate that wine knowledge remains poor among the general public. But the ruble’s reduced buying power, and retailers’ desire to make better margins, have combined to expose Russians to more new wines than in the past. Russians are experimenting, whether it’s with wine from Spain’s La Mancha or Portugal’s Vinho Verde, New Zealand’s Sauvignon Blanc, Spanish Cava and Prosecco or affordable German Rieslings.

Dramatic changes in taste

It’s not easy to obtain hard statistics from Russian retailers, and commercial information is rarely offered to media voluntarily. What is certain is that Russian import statistics have shown dramatic changes in the past three or four years. Among the losers are Old World leaders Italy, France and Germany, which have all lost a significant share of the market compared to runners-up Spain, Portugal and Georgia. The New World is stagnating, with Australia, South Africa and Chile losing market share; the US and Argentina have been particularly hard hit. On the other hand, wine-producing countries of the former USSR, which share a cultural tie with Russia, have seen impressive growth.

Although Russia as a whole remains a consumer of sweetness-driven wines, market players sense a slight drift to drier wines. Although the effect isn’t big, it’s there, probably because there is such a great variety of dry wines, some of which can readily compete with off-dry and semi-sweet wines. The developing gastronomy scene has been another factor in the move towards dry and brut styles. While the trend is largely limited to wealthier consumers, it influences other groups too.

Russians buy their wines from several categories of retailers. The biggest combine food and wine offerings, such as X5 Retail Group’s chain of Pyaterochka supermarkets, which has more than 12,000 shops across the country and which is, by far, the biggest mover of volume wine in Russia. On the cheaper side is the Diksy chain, while Auchan is a big volume mover as well. Metro Cash & Carry, on the other hand, is a far more sophisticated wine trader dealing both with volume and quality producers. With its combined wine shops/on-trade concept, Otdokhni (“Take a Break” in Russian) is another fast-growing retailer combining food, wine and HoReCa under one roof and defining what the future of affordable wine sales might look like. Mid-level supermarket chains like Lenta and Perekryostok are showing fewer signs of a creative approach while upscale supermarkets like Tvoy Dom (“Your House”), which have an impeccable wine portfolio, don’t seem to be making it an important part of their business. The top-end Azbuka Vkusa (“The ABC of Taste”) retail chain, which has its own wine portfolio, is a powerful player catering for higher-income consumers.

The development of affordable chains shows that the general consumer likes shopping close to home at Krasnoye & Beloye (“Red & White”, about 5,000 retail outlets); Bristol (2500 outlets); Aromatny Mir (“Aromatic World”, 500 outlets) and the abovementioned Otdokhni (200 outlets). Such chains, some of which have thousands of outlets situated in uptown Russian cities, are capable of moving serious volumes. Spirits producers are also involved in the distribution of wines. Beluga Group, the producer of the eponymous Russian vodka, has importing wine for several years now, having already added about 300 specialised shops in Moscow under the brand WineLab.

Another reason for wine producers to be optimistic about Russia is the recent trend towards retailers importing on their own behalf. While the rich and stable 2000s were about the development of fine wines, and importers and distributors were able to maintain a healthy margin and still be successful, from 2010 prices were pushed downwards and they had to fight for every cent. Now, observers on three sides – retailers, importers and journalists – agree on the diminishing role of classic wine importers, as retailers invest in their own importing departments. Several national wine promotional bodies have reported an increase in value per bottle sold in Russia, despite volumes being down. Wines of Portugal have returned and German wines are expected to follow suit.

What’s hot, what’s not

Production of local wines has grown since 2010 as more wineries in the south of Russia develop a clear vision for better quality. Thirst for the national product increased dramatically after the population was cut away from the EU by sanctions and trade wars. After US-Russia relations deteriorated, the impact on US wines was felt immediately although some high-end wines remain in Russia. Interest in local wine can also be explained by the fact that many wine specialists and PR people, having lost their EU projects and employers in Russia, have been forced to work for Russian wineries or winery associations. With the addition of Crimea, the country’s areas under vine have dramatically increased. While the quality remains debatable, there are positive examples of better wines appearing, both at the high end and mass market levels.

Chile remains the leading New World supplier in Russia, but consumers are losing interest in wines from across the Andes. They are simply not trendy anymore and do not fit the price to quality ratio Russians like to see. Important brands of the past have been washed out of the stores with the likes of Luis Felipe Edwards and Concha y Toro being virtually all that have survived. With no marketing presence in Russia, Argentina and its Malbec have been unable to take root on the shelves.

New Zealand’s Sauvignon Blancs, on the contrary, have doubled their exports to Russia in the past few years. Although imports in general remain relatively small in comparison to Chile’s, intense, crispy Sauvignons sell faster than pancakes on a sunny Easter day.
With regards to French wine, something has gone terribly wrong so that they no longer compete on a par with Italy. Oxana Batarshina, export manager for the Gérard Bertrand Group, believes several factors are to blame: bad consecutive harvests in Bordeaux leading to a surge in prices, the ruble devaluation, and strong competition from other countries in the price level previously occupied by cheaper Bordeaux. “People are also simply fed up drinking wines of the same regions,” she adds.

Italy, on the other hand, faces equally negative developments. Expensive classic bottlings from Tuscany and Piedmont are much less attractive while booming sales of Prosecco have not helped much on the value side. Affordable Italian reds from Puglia and Sicily perform better with distributors reporting increased interest.

Russia used to be one of the fastest growing markets for sparklings. The good news for Italy is that Prosecco remains big, although DOC/DOCG distinction is mostly disregarded. Another interesting market mover has been Spanish Cava, which attracts ever more people. This interest is driven by democratic offerings that have appeared in supermarkets. Chains like Krasnoye & Beloye sell Cavas at $9.00 to $10.00.

Russians love wines with high alcohol. While professionals are calling for Pinot Noir-ish elegance and lower alcohol levels, ordinary consumers vote with their rubles for intense, powerful wines. The alternatives to $20.00 Amarones sold through Krasnoye & Beloye are Puglia’s lush reds and Georgian Kindzmarauli, a semi-sweet wine made from Saperavi grape.

Georgian wine, banned from the Russian market in 2006, is now back on the shelves and stronger than ever since the ban was lifted in 2013, although it’s more mass-market options than quality-driven wines that are available. The thirst for Georgian wines is explained by the demand from consumers who remember Soviet times and Georgia’s position as the winemaking Mecca of the Soviet Republics. The popularity of Georgian cuisine and tourism are also contributing to growing demand; Georgia is clearly becoming an important travel destination.

While the political status of Abkhazia remains an issue, it has become, alongside Georgia, one of the fastest-growing suppliers of wine to Russia, dominating the cheap wines segment; the wines are probably made from Moldovan bulk. Brands like Lykhny, Apsny and Psou cost virtually nothing at just $5.75 and are semi-sweet. There are positive trends for countries such as Azerbaijan and Armenia too. Winemaking in the latter is moving at speed and geographical names like Areni are becoming familiar, thanks to Arthur Sarkisyan’s efforts to bring these wines to Russia.

Mysteriously, Portugal, whose grapes most Russians can’t even pronounce, is making a strong comeback, with sales doubling in value in 2017 compared to 2013. The secret is, of course, attractive pricing, great quality, drinkability and Vinho Verde. The “zelenoye vino”, as Russians call it (green wine), is probably the most emblematic Portuguese wine in Russia. The Wines of Portugal 2018 marketing campaign has also helped.

Sales of Spanish wines, not including the imported bulk used to produce “Russian wine”, are also on the rise. Democratic offerings from La Mancha and Jumilla are driving the segment with distributors increasing the presence of smaller wineries from Spain’s non-classic regions.

Grower Champagne, although a niche offering for HoReCa and Moscow’s private clients, has become interesting in places where sommeliers play an important role. Instead of carrying one or two well-known brands of Champagne as they did several years ago, Russian distributors are looking for niche terroir wines of limited production, which generate all-important cash flow.

With people still figuring out which wines taste better, organic concepts are not yet attracting strong interest. While both retailers and media have made great efforts to explain the difference between organic and biodynamic farming, the population at large still remains uneducated on the matter and, in any case, it looks like organic ideals don’t really speak to the Russian soul.

Pét-nat wines, on the other hand, have attracted interest thanks to favourable reviews from hip somms and traders. While companies are still bringing such wines into Russia, it looks like the saturation point is not far away.

Overall, while times are tight, they’re also good for ordinary consumers, who have more and better wines on offer than ever before.

This article first appeared in Meininger’s Wine Business International, 22 Nov, 2018

The Verdicchios money can’t buy

Why is it always the same story with Italian white wines: they — with rare exceptions — are perceived as something not worth cellaring, sommeliers and wine drinkers grim when you mention the names of the grape varieties. “Come again?” — the snobs would say. These varieties, mind you, Italian noblemen were happy to drink, so why wouldn’t we drop the doubts and dive into the world of variety that deserve to carry the name of “Classico” on the label (and there are not so many in Italy!). Meet the winemakers rolling out ten-years-old wines (and more!). Frankly, in case of Verdicchios from the area of Jesi ten years could be just the bare minimum.

One might be tired of the same old story, but you know what: definitely not of the wines. The recent “Old but Gold” tasting of older Verdicchios of Marche, the region where mountains date the sea on a regular basis, proved once again: in “golden” hands every grape gets a chance. Add some historical terroirs like those around the town of Jesi to the mix and off you go chanting praises to the winemakers’ efforts.

I was lucky enough to have been invited to the memorable “Old, but Gold” tasting with Ian d’Agata, an apogee of 3-days-long Verdicchio tasting, where sommeliers, trade and a couple of MWs from all around the world gathered to discover the true potential of the white “king” of Marche — the Verdicchio variety.

Not a single of 15 still wines presented for the tasting failed to serve its minimum purpose — to be a pleasant and drinkable wine. As we proceeded from younger vintages (2014 having been the youngest) to the older ones (the tasting peaked at 1997), the idea of good Verdicchio was evolving as did the potential of Verdicchio terroirs.

4 years old. While most Verdicchios are consumed younger than that, we started with a four years old bottle from Tenuta dell’Ugolino. The 2014 presented the exotic side of the variety, bright, rich and cheerful, aged in stainless steel and showing intense attack on all the senses. Pineapple and yellow apple packed tightly.

A 5 years old Leopardo Felici’s “Vigna Il Cantico della Figura” 2013 is a rather crispy, but overall modest Verdicchio with playful astringency and a pleasant exotic finish. While very nice wines in their own right both 2014 and 2013 can lead to a false belief that Verdicchio is all like that: exotic and bright. The wines that came later demonstrated that one couldn’t be more wrong.

8 years old. Tenuta di Tavignano “Misco” 2010, Casalfarneto “Crisio” 2010 and Montecappone “Utopia” 2010  were the three Riserva wines chosen to impress the audience. Duly mentioned during the tasting, there are not so many white Italian wines that can withstand the 8 years of ageing. “Misco” 2010, beautiful and balanced, showed the increased pungency and the growing complexity of aged Verdicchio. Casalferneto’s Verdicchio “Crisio” was, on the other hand, deeper, lingering, rounded wine arguably injected with gunpowder — the taste we would discover in many fine older Verdicchios to come. The Montecappone “Utopia” 2010 Riserva showed a modest character affected by a cold vintage on clayish soils.

The real surprises were yet to come, though.

The 2009 “Rincrocca” by La Staffa pushed the limits of the Verdicchio image — who could have known that a 9 years old white from Marche could be like that: deep, salty, lush, peppery and mineral at the same time? Salivating over this one can leave one without any fluids. And, again, the gunpowder aromas showcase the character of the soils and grape combination that comes from clayish-calcium salty soils in the hills near the small village of Staffolo.

Moving on to 10 years old wines — “Selezione Gioachinno Garolfoli” from the Garofoli winery showed a good acidity with already familiar notes of gunpowder. On the other hand, the Marotti Campi “Salmariano” 2008 was fresh as new, pleasantly pungent, beautifully saline and very attractive overall. It didn’t lack complexity too, making some of us to think about the enormous gastronomical possibilities.

Meanwhile we were moving along to 11-years-old wines of 2007: both Santa Barbara’s “Stefano Antonucci” and Umani Ronchi’s “Plenio” showed really well just what was there to be expected of excellent aged Verdicchios. With Umani Ronchi being more on the “classic” side (in fact by this I mean a rounder style), beefier and juicer, the Santa Barbara was a stream of mind-blowing acidity mixed with stellar minerality and a familiar gunpowder take.

A 14 years old Pievalta was definitely one of the favourites of the tasting: the Riserva “San Paolo” 2004 is amazingly deep and bright, lingering on the palate and revealing tons of pungency, the wine of definite gastronomic power and, dare I say, scientific interest.

How much better and how much older Verdicchios can really be? That was the question as we moved on to tasting 17-18 years old wines. By that time the grape variety already proved it’s capable of much more than is normally expected, but proving even more could be revealing. Fazi Battaglia’s “San Sisto” Riserva 2001 was in surprisingly good shape, despite having probably lost some of its initial freshness, the wine retained the body with clear vanilla hint. Another 17-year-old wine — Coroncino’s “Gaiospino” 2000 — is a striking example of how wrong one can get about Italian whites, the wine of staggering depth, nutty character that, nevertheless, retained all of its beauty, complexity and brisk acidity, moreover, it gained body weight and powerful richness. Frankly, the old Verdicchio is as modern as any hipster would like it to be!

Was it enough to put Verdicchio into a different league? Yes, but two other wines were still sitting in front of us willing to crush the last nail into the coffin of our imagination. A 20 years old “Vigna Novali” 1998 from the cooperative winery of Terre Cortesi Moncaro was the Verdicchio that reminded me of visiting a pharmacy. The wine was balanced in the mouth and whilst not showing the amazing structure of the previous one, it still delivered great emotions.

Overwhelmed by the ridiculous beauty of all the Verdicchios we tasted we were waiting for the last one: Fratelli Bucci, “Villa Bucci” 1997. Considering its age this Riserva could be in any shape from beautiful to horrible. And it was a stellar wine: lingering in the mouth, buttery like some Burgundies and showcasing deep, juicy salinity. Twenty one year old, a legal drinking age in some countries, this wine could be a great start of anyone’s drinking career. A cherry on top of the tasting cake, this one could be a testimony to the Marche’s (and Jesi’s) potential, a proof for each and every somm in the world, an attraction for a collector’s wallet.

If only he could put the hands on it!

Text: Anton Moiseenko, 2018. This article first appeared in The-Buyer.net (UK)

On the Rive bank

Have you already noticed (and tasted) some of those Proseccos carrying the name “Rive” on the label? Introduced in 2009, the category is supposed to bring a more terroir focus on the Conegliano-Valdobbiadene DOCG subzones, but is there a future ahead of the category? Anton Moiseenko is reporting from the region

Before 2009, the only truly territorial unit within the larger Conegliano-Valdobbiadene area was that of Cartizze, the historic 107-ha hill located close to the town of Valdobbiadene, the one that used to supply the parties of well-off Milanese with rich, exuberant, mostly sweetish sparkling wine. Then the changes arrived — and many Prosecco producers woke up to the fact they could now produce something called “Rive” Prosecco Conegliano Valdobbiadene.

The name of the new category was taken from the local dialect word “Riva” meaning “hill”. That’s no coincidence: most vineyards that bear the Rive name are located on the slopes of the hills between the towns of Valdobbiadene and Conegliano. There are currently 15 “Rive” villages (or communes) of which 43 separate “Rive” can be — in theory — produced. Innocente Nardi, the President of the Consorzio Tutela del Vino Conegliano Valdobbiadene Prosecco puts it this way: “We have been studying zones and soil types for years to see the difference from one zone to another. In 2009 we made a clear statement that the territory is of the utmost importance. “Rive” is the consequence of this philosophy”.

While some slopes allowing “Rive” production roll gently into the autumn mist like Rive Di Manzana in the commune of Vittorio Veneto to the north of Conegliano, others rise abruptly with extreme hill inclinations that reach 80%, as in the vineyards of Riva di Guia in the commune of Valdobbiadene. Besides the requirement of being located within the specific communes, the grapes for Rive wines must come from vineyards with controlled yields of a maximum 13 tons per hectare (which is slightly lower than the official 13.5 tons requirement for the Prosecco Superiore DOCG wine) and be manipulated exclusively by hand.

The hill concept

Not all the Rive hills give birth to Rive wines, though: some exist only on paper. “The vineyards are owned by a lot of people,” — says Lodovico Giustiniani, the owner of Borgoluce winery that produces wine from Riva di Collalto in the commune of Susegana. “The wineries located closer to Rive areas are more interested to produce “Rive” wines. Some “Rive” subzones have several producers, others don’t have any, especially if the growers sell to bigger wineries.”

“To produce Rive one needs a dedicated project, fewer grapes quantity and more work in the vineyards,” — says Sergio Bramuzzo of Le Manzane winery bottling Rive Di Manzana.

“Rive” production is still relatively small (only 2,3% of all the Prosecco Superiore DOCG sparkling wines were Rive in 2016) not only because enough growers have to come together united by a single winery. Smaller wineries are still figuring out how to build “Rive” into their current production coming from the hills. In fact, many small-to-medium size wineries could (if they wanted) convert all their production into “Rive”.

“In the beginning, we didn’t actually want to produce this category,” — says Vanessa Follador of Tanorè winery that makes “Rive di Guia” from extremely steep hills and older vines near Valdobbiadene. “All our vineyards are on the classified hills. If we converted all the vineyards we’d produce less wine and would have to set higher prices, which — due to the steepness of our vineyards — are high enough already”.

While bigger wineries are treating Rive as communal appellation and blending grapes from the hills, others, like Zardetto with its Rive di Cozzuolo “Le Viti Di San Mor” are playing the single vineyard card selecting grapes from dedicated plots within one “Riva” hill. “Of course, we could make “Rive” wine from the whole site that we have here, but we are trying to source grapes only from the best parts of the vineyard,” — explains Filippo Zardetto, whose father Fabio is consulted by a famous Umbrian enologist— Riccardo Cotarella.

“We started to produce “Rive” in 2011 and each year we decide whether to make it or not because each year is different. It’s like doing something for fun, but it’s not fun, it’s a serious approach to show the soils diversity and the Glera variety,” — says Daniele d’Anna Bortolotti of Umberto Bortolotti winery already producing several different Rive.

Besides hilly vineyards which are considered to be the must for a proper “Rive” Prosecco, producers point out the importance of old vines. Manuel Godello of Roccat winery, the producer of Rive di San Pietro di Barbozza, says: “The older vines make wines last a lot more in terms of smell and taste”.

The approach

If Rive is a communal and terroir-based concept one would expect some differences in style of different communes. The question is not yet easy to answer: it’s been just 7 years from the arrival of the category. While producers are taking Rive seriously and with enthusiasm, their number and Rive tradition are not enough to speak about the distinct differences between the Rives at large. Some of the Rive have only one single producer that defines the “Riva” style. Those that have 3-5 producers, are too early to compare since their production methods are varying in terms of lees contact, fermentation and blending practices, not even mentioning soils composition within one classified hill.

One important factor is that producers are sharing the idea that Rive should be wines with lower sugar levels. There are, of course, extra-dry and dry versions of “Rive” wines, but overall the tendency is towards being either Brut or even soon-to-be “Extra Brut”, the category that will encompass wines with sugar levels below 6 g/l. Prosecco area has a long history of producing sweeter versions of Glera they actually call “dry”, but the Rive category might change that.

“In Rive wines we want to achieve a more complex and structured taste, [while] also retaining fruitiness,” — says the producer of Rive di Refrontolo, winemaker Mirko Della Colletta from Colvendrà winery. “Yes, sugar is important for boosting perfume flavors. In dry version the flavor is more pronounced. The brut version expresses the terroir better, but we also would like to have a top wine that could pair with deserts. Brut is just not good for that”. Even with these considerations, Colvendrà bottles 70% of its Rive production as Brut. “It should be the best wine we produce”.

It’s safe to say “Rive” producers are looking to bring more complexity and identity to their wines. For many wineries Rive already represents the top wine. Sweeter and richer Cartizze wines remain something of a tradition. And an expensive one.

Time seems to be key in the DOCG zone evolution. Sergio Bramuzzo of Le Manzane says: “We have 20 years of experience with Prosecco DOCG and only two years with Rive. There’s a long way ahead and we are experimenting a lot”. “The differences between “Rive” wines are not so clear, but the more you know these wines and the more you taste, the more they become apparent. For us it’s also a learning curve,” — says Innocente Nardi, whose family also produces Rive di Farra di Soligo at the La Farra winery.

Unusually, it’s the bigger cooperatives like Cantina Produttori di Valdobbiadene (around 13M bottles a year) that have all the opportunities to become the leading Rive producer. With roughly quarter of a million bottles of “Rive” produced in 2016, the winery accounted for about 13% of all 2916 Rive production. “We don’t say we make the best wine, but we can make the best wines from certain areas. Wines with different personalities,” — says the winery’s general director Aldo Franchi. With an extensive network of growers at hand, he can, in fact, produce the most variations of Rive wines. “The response we have from the market encourages us to move forward with Rive. We could end up producing 10-12 different wines”. For now, they make four.

Pricing

The market figures indicate that Rive exports have been growing since the introduction of the category in 2010 — together with the growing production of the category. Around a quarter of Rive bottles produced is being exported. This means 75% of Rive is consumed in Italy where the prices for these wines are way more affordable. This is especially true for €7-10 price range — being around 30% of Rive production in 2015, only 4,6% made it to the distribution channels.

The price difference between ex-cellar prices for Rive wines and Prosecco DOCG normally falls into €1-3 range. “Partly this increase is caused by lower production and bigger costs of manual labor. While Prosecco Superiore DOCG wines are also often produced by hand, it’s important to understand that in Rive vineyards one cannot use machinery at all: neither for grass management nor for moving the boxes with grapes and such. All the treatments have to be applied by hand too”, — says Mirko Della Colletta. “It’s about 8-9 times more labor-intense to produce wines from these hills than from flatlands,” — adds Vanessa Follador. “It’s only normal that Rive wines cost more”.

The future

For many wine producers a less pricey and less sweet Rive category is allowing to replace the expensive and traditionally sweet and limited Cartizze production, become less dependent on bought grapes and seek new terroirs that best fit for Glera.

“Knowing Rive is knowing the Prosecco territory, it’s moving towards the deeper understanding of the area,” — says Innocente Nardi. “This is a very cultural aspect. A lot of people know Prosecco, but not so many know about Conegliano-Valdobbiadene, and even fewer know about Rive”.

Prosecco DOCG producers tend to avoid the subject of competition with Champagne. Still, with a more terroir-driven, communal and even single vineyard approach, this competition will become more and more evident. It’s worth mentioning that some producers even leave the Prosecco name off their labels. The appellation rules actually allow them to do so: some labels simply read Valdobbiadene DOCG and the name of a specific Riva as it’s with Roccat and Umberto Bortolotti. The extreme side of it is Bepin de Eto — the winery produces its Rive di Rua closer to the town of Conegliano without any reference to the Conegliano-Valdobbiadene DOCG on the front label. Could there be a stronger Rive message to the world?

It will probably take years for the international markets to digest the new category of Prosecco Superiore quality. Wineries with clear passion for quality and terroir are going to define the face of Rive wines in years to come. They will also have to confront the stereotypes associated with Prosecco. Will Rive category make this task easier? We will see soon enough.

A version of this article first appeared in Meininger’s Wine Business International, 10 Feb 2018

Meet the new Russian wine consumer

Surprising as it seems, the urban wine consumer in Russia has evolved more over the past couple of years than during the so-called ‘oil boom’. This is explained by two factors: the arrival of a new generation, and a total market shakeup due to the political and financial crisis of 2014. These effects are shaping consumption trends among the people the top wine producers would like to see sipping their wines in Russia.

One important group of wine importers and distributors in Russia caught the wave early and seriously set out to service private clients and corporations by establishing dedicated sales departments that proved to be much-needed additions to the companies’ existing sales channels. While far less significant in financial terms than the HoReCa and off-trade, they offered features that are lacking in those sectors. Among these, says Ilya Veinberg, head of private and corporate sales for wine importer and distributor Classica, is rapid cash flow which “makes the department extremely important”. So, too, is image-building among a very valuable target audience.

The leaders

The major players with established private and corporate departments are importers whose history stretches back to the 1990s: Simple, MBG, Eurowine, FORT Wine & Spirits, DP-Trade and a number of smaller players. Of these, one company has shaped the face of today’s private and corporate sales in Russia. With a department employing more than 50 people and a good grip on the most important corporate wine consumers in Russia, Simple has raised the bar for its competitors, outweighing them by salesforce, PR, market aggressiveness, and the scale of its ambitions. As Russia’s economic situation stabilises and rules covering online sales are expected to be relaxed, that competition is likely to become fierce.

Mid-sized companies like Classica, Grape, and Vinoterra are paving the way to further growth. Another new phenomena of recent years has been efforts by vodka producers and distributors to tap into the wine market. The St Petersburg-based Ladoga Group, for example, has sought to build a serious wine portfolio, attracting names like M. Chapoutier and expanding its operations to Moscow.

At the other end of the scale, smaller companies like Wine & Only manage a compact portfolio of French wines and are dealing directly with private and HoReCa clients. “We generate new clients mostly via word of mouth,” says Natalia Zubova. “Our wines are mostly recognised thanks to the specific winemakers who produced them.”

In attracting private clients, some companies rely heavily on famous brands, communications, PR, and educating both private clients and sommeliers. Others focus on building stronger personal relations, offering niche wines and more flexible payment terms. Pricing is another crucially important factor for wine importers seeking to succeed in the private and corporate channels. One way to get this right has been by managing currency exchange rates in a period of severe fluctuations. As of mid-April 2017, several wine importers declared considerable price reductions due to exchange rate stabilisation and a steadily strengthening ruble.

Where did all the oligarchs go?

Back in the 1990s and 2000s, it was sommeliers who were pouncing on the new wealth. For better or worse, the anecdotal days when oligarchs bathed in Pétrus and Château Margaux and barbecued with grand crus are over. Those businessmen have virtually disappeared from the modern wine scene. “Private clients have evolved. They travel, they speak foreign languages, they know the wines,” says Vladislav Volkov of Vinoterra. “People who drank Super Tuscans and grand crus had no choice but to switch to less-expensive bottles,” observes Liudmila Mamontova, head of the private and corporate clients department at MBG, a key fine wine player in Russia.

With the political crisis of 2014 and subsequent collapse in the value of the ruble, many clients with thick wallets fled the country and now only visit to check their remaining assets. “Even for those rich people who are still here, it’s not good to consume the way they used to. It’s not only about the money, it’s about the evolving culture,” says Alexander Lipilin, the CEO of FORT Wine & Spirits.

The reasons to drink wine are also changing. Private consumers are moving away from drinking for status to drinking for pleasure. “They now realise that it’s not necessary to drink expensive wines. Wine is not Rolex anymore,” says Elena Kuznetsova, head of the private and corporate department at Eurowine.

As for the corporate side of the wine market, that normally stays hidden from prying eyes and ears – a secret carefully kept within their companies. But there is no doubt that if anyone is spending heavily on wine in Russia, it is the corporate clients, who are satisfying the wine needs of holiday gifting for their employees and business partners.

The oil, gas, construction, financial, and mining sectors and top consulting companies are all desirable targets for wine distributors seeking to secure important seasonal sales during the New Year period. Hardly surprising, some players estimate about 30% to 50% of fine wine is sold during this time of year, but national holidays such as Defender of the Fatherland Day on February 23rd and International Women’s Day on March 8th also offer lucrative opportunities. “It’s an important part of the sales,” says Volkov. “With these clients it’s quite simple: the major thing is to have the right price.”

Many corporate clients buy and spend enough to create fierce competition for their business. Tenders are a common way to select wines for corporate gifting, especially since harder economic times drove corporations to tighten their budgets significantly. “They want 50% to 60% less than before the crisis of 2014,” estimates Mamontova. Nevertheless, according to most market players, wine remains an important option for corporate gifting. “Everything counts in the corporate game: wine prices, and brands, and relations with the person who makes purchasing decisions,” says Alexander Lipilin of FORT. Eurowine is watching the regional corporate market closely. “With the crisis, many Russian companies are moving their headquarters outside Moscow. We have to pay attention,” says Kuznetsova.

The wine distributors’ representatives agree that Russian clients of every income level are counting their rubles carefully before spending them. “Nobody takes prices for granted anymore,” says Olga Taipova, who is responsible for private and corporate sales at AST International Environment. What this also means is that the desire to experiment with new wines is growing.

The exchange rate fall that slowed wine sales in the end of 2014 also ignited interest in Russian wines produced in the south of the country, and especially in the annexed region of Crimea. Most wine distributors who initially resisted adding Russian wine to their portfolios now carry at least one brand. “High-quality Russian wines are rare and they are in demand, especially as gifts for foreign friends or partners,” Lipilin says. The overall interest in Russian wine and its share in wine sales across all channels has certainly grown significantly, and Lipilin attributes this to the value for money they offer rather than patriotism. “As the ruble gets stronger, demand for Russian wine goes down,” he observes.

Bordeaux grand crus, by contrast, have suffered because of the ruble exchange rate. “We carry nice second- and third-growth Bordeaux grands crus – wines offering better value for money. Top chateaux are too expensive; it’s hard to guess the best vintage,” says Ilya Veinberg of Clasisca.

The new generation

Step inside one of the Moscow’s many wine bars and you will be surprised by the number of young women chatting and having a good time. There are definite gender shifts among modern urban wine drinkers. The Russian wine market created in the ’90s by and for men is changing rapidly. While serious wine buyers still tend to be male, women are now making many more wine purchasing decisions. “Ladies are often leading wine buying, especially in restaurants. It’s also easier for them in terms of image since wine has been traditionally thought of as a drink of choice for women,” comments Veinberg.

Even so, the buying power of Russian males still lies largely in their business activities: men are more exposed to sophisticated gifting situations and negotiations that require a quality dining experience with business partners.
“Among older consumers, men are still dominating, while 35- to 45-year-old urban men and women are more evenly matched when it comes to selecting and buying wines. They are having fun and advising each other,” says Sergey Podporin, owner of LEO Wine & Kitchen restaurant in the southern Russian city of Rostov-on-Don. According to him, female customers’ interest to wine is also connected to the end of their maternity leave. “Women who start thinking about themselves again are literally hungry for wine,” he notes. Lipilin also refers to the way decisions tend to be made within younger Russian households: “The person with more time and knowledge normally leads.”

Ageing with grace: the generational change

The new generation of young people in their 30s is already defining the future shape of the Russian wine market. They don’t yet have the means of the wealthier over-45-year-olds who were raised on labels like Sassicaia and Tignanello, but their habits and openness to new tastes and new wines are already very apparent. And it is not only Moscow and St Petersburg that are experiencing this trend. Sergey Podporin says his clients are no longer satisfied with discussing a single red or white. “They want to sit down with five to six glasses of different wines.”

Keeping younger generations in mind, some forward-thinking Russian companies have decided to be more open-minded and friendly to this group of consumers than others. While traditional wine marketing includes traditional ways of doing things: discounts, wine dinners, direct calls, and even various forms of financial inducements, companies like Invisible and WineStyle are putting their efforts into aggressive forms of online strategy. Invisible, in particular, is noted for using youth-oriented internet slang and hipster-style graphics, while WineStyle has built a reputation for its extensive online wine catalogue that incorporates wines from many different wine importers. Both firms’ sales are rising.

 

Being in the game

Wine distributors understand that their private and corporate departments are not just about making sales. Today they act as private sommelier services that guide clients through the world of fine wine, sometimes on a 24/7 basis. In order to tap into the private and corporate wine market, Russian professionals recommend a proactive approach: first, visit the market often and talk to the potential consumers face-to-face. “It’s important how charismatic the winemaker or the owner is. People tend not to remember the names of wineries, but they do remember the other people,” says Lipilin.

Private and corporate client departments are not just meeting needs – they are creating them. Being a direct connection to wine producers and the whole world of wine ratings and critics, they can influence and educate, shift preferences and tastes. “The vicious circle is that where there’s no supply, there’s no demand,” says Kuznetsova. With the improvement of the economic situation, and especially the gradual improvement of the value of the ruble, these parts of the business will become even more important.
Anton Moiseenko

This article first appeared in Issue 2, 2017 of Meininger’s Wine Business International.

Mindless drinking

Roman Smirnov just had a terrific day. One of this evening’s guests ordered three bottles of Grands Échezeaux and one of La Tâche, all four by one of the greatest Burgundy producers — Domaine de la Romanée-Conti. The final wine bill came to a whopping 850,000 rubles (approx. €11,000). Why does Roman care? Because he is a sommelier at the celebrated Russian chef Anatoly Komm’s upmarket restaurant. Too bad Smirnov and other sommeliers at top venues cannot simply rest on their laurels anymore as the kind of prolific outlay is becoming extremely rare.

While fine wine bills have soared across the country due to the twofold weakening of national currency and economic turmoil, the question restaurant owners, sommeliers and wine traders ask themselves is why on Earth the rich man’s wine wardrobe remains so clearly driven by a small group of overpriced wines. And the broader one: why doesn’t wine culture flourish yet, after 25 years of open market?

Back in the 1990s it was looking so promising for the wine trade. Opening the market for imports and new wealth came smoothly together. What attracted Russian wine importers and sommeliers at first were classic wines. “Companies were willing to bring crème de la crème of the fine wine world”, recalls Dmitry Bazashvili, a Moscow sommelier with extensive experience in the city’s top restaurants. This meant exactly what it sounded like: Bordeaux, Burgundy, Tuscany, Piedmont. The blue-chip stuff of fine wine world. It hasn’t been until the 2000s when the practice of using top wines to show off took off: the talks of Petrus’ baths had already been in the air. Until recently “resolving issues” (reshat voprosy, in Russian) while drinking top Bordeaux was a common practice.

The luxury consumer

Expensive bottles which get two-three times more expensive when they reach the Russia’s capital, attract a well-defined clique of consumers. They are top managers, businessmen and, not the least, officials of all sorts. Top wines sales have often been fuelled by the money coming from the government-affiliated structures. Oil, gas, mining, construction businesses, everything that turn around tremendous amounts of money, are the most desirable clients of all, often willing to pay ridiculous money for the “right” bottles. I drink Tignanello, you drink Tignanello: like two submarines call-signs it’s a way of telling foes from allies.

Ironically, it’s not the desire to enjoy the aroma and taste of top wines that is the main driving force behind the demand for the “blue chips”. “Up to two thirds of such wines are destined for gifting,” says Vladimir Basov, running wine importing business and managing several wine bars in Moscow and St. Petersburg. “Most consumers of top wines regard them as status symbols rather than something to enjoy”. Sounds familiar: think China or Brazil. Doesn’t any developing country follow the pattern? When it comes to label-drinking, Russia has some specific features.

Label-drinking “a-la Russe”

As the rich became introduced to what sommeliers and Russian wine trade referred to as “best wines”, the interest to other wines quickly faded. Feels like the vici part of veni vidi vici never happened. At a certain stage top wine drinkers decided that they know wine because they drank the “best” ones. The will to discover new things rather than seeing to the old habits is something that never became a healthy habit in the country. Selecting wine is intimidating to the rich ones with too much at stake: their image, personal and business relations. With each new bottle a Pandora box, label-drinking came in handy.

Fabio Borgianni, Quadrum restaurant manager, Four Seasons Moscow

“Around 60% of our Russian guests want famous labels like Ornellaia, Masseto, Solaia, Tignanello. They are looking for rich, full-bodied, rounded wines with universal powerful taste,” says Quadrum restaurant manager Fabio Borgianni at Four Seasons Moscow, overlooking Kremlin. To encourage guests to break away from their habits Fabio has to go round and about and make use of tricks of all sorts. Guaranteed return of an already open bottle if the wine does not fit the guest’s taste is one of those that regularly works well.

One might think that Tuscany example is the only that of brand-driven, mindless consumption in Russia. It’s not. Burgundy, the Holy Cow of wine aficionados, follows almost the same consumption pattern. Even assuming the consumers of Burgundy should know more about wines they still choose the famous labels. “Half of those who prefers Burgundy in restaurants do so to make an impression,” points out Basov.

Professionals like an expat in Moscow Fabio Borgianni are in low demand these days: sommeliers prefer to think less, sell more and are often tied up by restaurant owners who control the wine list and benefit on specific agreements with the wine traders.

R.I.P., Mr. Sommelier

With wine advertising ban closing the possibilities to deliver the wine-related information to the final consumers in 2013, sommeliers remained one of the few legal channels to convey the wine knowledge. But the hopes that sommeliers could somehow replace media vanished fast. It’s sad to admit that “sommelier” in Russia has turned into a curse-word. It was in this decade when restaurant lists became dominated by commercial wines and regulated by the contracts between importers and restaurant owners. Money agreements, that is. Sommeliers slowly evolved from deciders to what’s called in Russian vinocherpiy — a guy who simply pours your wine. The “labels” — expensive, famous, promoted by sommeliers and wine businesses — became just the right tool.

Designed to be the guides into the immense wine world, Russian sommeliers quickly became something else: a tool for promoting a limited number of fine wines, expensive and easy to sell. Driven by the desire to serve best to their nuveau-riche guests, sommeliers seldom dare or care to persuade those to enrich their wine vocabulary with a bit cheaper wines of the similar quality as the top ones.

Nobody trusts anybody

Russian sommeliers seem to have lost unconditionally in fight against label drinking. The clear lack of trustworthy local experts added a lot to it — no Russian Robert Parker has yet been born to influence, guide and inspire. Journalists are moving to make their own wines and wine writing is still widely banned from papers by law, making the profession extremely rare and non-rewarding financially. Besides, top drinkers rarely listen to experts of any sorts and, especially, the younger ones. Prices of wines sold are directly linked to the seniority of those who sells them.

Arkady Novikov, powerful Russian restaurateur, the head of Novikov Group

It’s not only about the sommeliers per se. As a famous Russian proverb puts it, fish begins to stink at the head. Trust between the Russian venue owners, directors and sommeliers leaves much to be desired — at best. The anticipated restaurant life cycle of virtually any given restaurant is short and is a major reason behind the lack of inspiring wine lists. While most restaurants in Russia are run by businessmen rather than chefs, exclusions only make the rule more obvious. And then business goals step in: “You’re a good sommelier. Look, I’d pay you a basic salary and you go ahead and do business of your own,” the owners say. It is also about the money. Expensive wine requires expensive service — stemware, specialists, storage facilities and more importantly, time to store top wines.

Russian restaurateurs generally want quick returns, which is not good news for wine consumers. Unwilling to invest in wine cellaring, restaurants are managing smaller lists of no more than 150 wines. “As a result, we have reduced the interest in wine among guests. We stayed at the level where we like to drink Chablis but still think it’s a grape variety”, says Alexander Khatiashvili, special projects director at Simple, the fine wine importer based in Moscow. And if the lists are so limited they are bound to be filled with self-selling labels that turn around fast with virtually no effort from the sommelier side.

It’s possible that for this exact reason the most expensive wines like those of Domaine de La Romanee-Conti, distributed in Russia by Dmitry Pinsky’s company DP-Trade are among those that seldom suffer from crises. “In troubled times our best-selling wines are those of DRC. Their consumers don’t change their habits, ever”, says Pinsky puzzled himself.

Psy-factors

Back at Anatoly Komm’s restaurant Roman Smirnov says wines with a price tag of 5–35 thousand rubles a bottle (€70–450) are the backbone of top venues’ sales. Unfortunately for leading wine producers, the number of places capable of offering expensive bottles is declining fast: dealing with them proves to be psychologically hard to match short-term goals of restaurant owners.

Psychological observations of wine consumption are interesting and noteworthy. Insiders point out the Russian wine market is distorted by itself: it generates an extremely narrow interest towards a dozen of wine labels. “The rich ones start their wine journey with top commercial wines and are forced to believe that drinking such wines is a matter of prestige. In 95% of cases they will continue to drink full-flavour, commercial wines”, notes Mikhail Volkov, the co-owner of a wine bar downtown Moscow promoting more subtle wines of Burgundy, Germany and Austria. Unable to attract enough consumers in long term venues like his one rarely survive in the city.

Mikhail Volkov (right), the co-owner of Winil wine bar, Moscow

Driven by stereotypical wine beliefs Russian restaurant-goers often categorically reject certain wines (“all Rieslings are sour” or “I only drink Italy”). They limit themselves to a certain label: even the harvest year is not important anymore. The only thing that matters is the familiar name on the bottle. “For the fun of it, take a Sassicaia bottle and add another producer on the label with smaller font — no one will ever notice”, says Roman Smirnov.

Two ways it could end

So it’s a bit thick, all of that. There’s limited wine information flow, sommeliers are bound by restaurant owners, who are, in turn, bound by short-term thinking and depressing economical conditions, which are, in turn, bound by political situation. And drinkers are pressed down by psychological issues connected to the general interest to life and living. Label-drinking is a minuscule part of the wine-trade business complications and could be perceived as a natural market response to squeezing, tightening and red-tape control of the sector.

Some say it’s time for new wines for reasonable money. “The best wine bars in Europe aren’t full of wine connoisseurs, it’s just people who came to have a good time,” says Vladimir Basov. Importers and restaurateurs are seeking to bring new trends: those who don’t feed on Super-tuscans, promote subtle German and Austrian wines and the word “Riesling” sounds more often than “Supertuscany”.

“Wine is an element of culture. The more you travel, the more you learn. At least people are now taking pictures of wine labels,” says Mikhail Volkov. “We need another generation that would replace the current one, that have traveled the world and came back. Only then something will happen in this market,” dreams Khatiashvili.

Moscow restaurants: hard times in a changing landscape

Moscow-based White Rabbit just made a tremendous climb in The World’s 50 Best Restaurants, making its debut to the list at No.23. If you plan on visiting the Russian capital, you should catch up on what’s been happening on the restaurant scene.

At the beginning of 2014, Moscow’s restaurant market was still embracing western values by the book, with venues growing like mushrooms after a warm shower and gastronomic life flourishing with food festivals and mini-markets. But now changes seem imminent.

The breaking news of the government banning imported foods took the ‘new middle class’ by surprise. Television and social media exploded with questions ranging from the selfish “How can I survive without Camembert?” to the scary “What’s next? Wine? Cars? Being able to travel abroad?” The final question was: “How will restaurants handle it?”

Despite the food import ban, which was damaging at first sight, most Russian chefs and restaurant owners managed to overcome the problem and find local suppliers, in many cases changing recipes and restaurant concepts. “We totally switched to local meat including chicken, turkey, goat meat and lamb,” said Ivan Shishkin, the chef at the Delicatessen in the center of Moscow.

Moscow, which has around 3,000 to 4,000 restaurants, bars and cafes, is dominated by big groups rather than big chefs. Novikov Group, Ginza Project, Restaurant Syndicate and Maison Dellos have already grown beyond the two Russian capitals, Moscow and St. Petersburg, and some have launched restaurants in London and New York. Their business schemes include posh design, trendy musicians and a couple of celebs, and they’re set in the right locations and shaken up with a powerful PR blender.

The truly unique skill of Moscow restaurateurs has always been problem-solving. The fact is that any Moscow restaurant can be instantly closed down simply because the outdated restaurant regulations are extremely hard to comply with. It is the restaurateur’s role to manage everything from landlords and health inspections to specific recipes.

Moscow chefs, too, have developed skills uncommon among their western peers, and they have to think outside the box in order to make it. Anton Kovalkov, born in the city of Nizhny Novgorod, just 250 miles away from Moscow, was the first Russian to get training at Noma. Ivan and Sergey Berezutsky, Vladimir Mukhin, Ivan Shishkin, Dmitry Zotov, Anatoly Kazakov, Dmitry Shurshakov are notorious examples — the list not being exhaustive. “Chefs are now both capable and willing to do great things,” says Andrey Fedorin, who manages MariVanna, Ugolyok and Uilliam’s. “They are more involved in business than ever before.”

Restaurant owners are changing, too. Once obscure investors who told chefs what to do, they have now become clever foodies, giving interviews and hanging out in open kitchens in front of their guests. White Rabbit, Zodiac and Selfie founder and managing director Boris Zarkov is widely considered a new type of restaurant CEO, forming close partnerships and friendships with creative and modern chefs like Vladimir Mukhin of White Rabbit.

Famous chef Anatoly Komm has been struggling to prove Russians are ready to enjoy complex gastronomy — including molecular cuisine — on a regular basis, seemingly dreaming of himself as a Don Quixote of the Russian culinary landscape. While Mr. Komm is certainly seen as an influential chef, his ideas of introducing Moscow’s population to experimental fine dining are generating mixed responses from both professionals and visitors, with mockery and worship forming intricate patterns.

It seems that what Muscovites are expecting these days is a more down-to-earth approach, and that’s what the major groups are coming up with — just take a bite of the burgers at the new Novikov place, #Farsh, (literally meaning “ground beef”), for an example. We’ll have to watch this space to see how it plays out.[bs_icon name=”glyphicon glyphicon-leaf”]

This was initially published in the World’s 50 best Restaurants Blog

Drinking Russian in Moscow

As the rouble tumbles, making imports more expensive, Anton Moiseenko discovers that Russian wines are finally appearing on smart menus

At 3.00 pm on a Sunday afternoon, the White Rabbit restaurant in Moscow is receiving guests. Several tables are occupied by families, restaurant staff are reading fairytales to the smaller children, and even the Stalin-era Ministry of Foreign Affairs skyscraper doesn’t look so bad when viewed through the French windows. Managed by co- founder Boris Zarkov and chef Vladimir Mukhin, the White Rabbit is a symbol of innovation in Moscow’s restaurant scene. It is also one of the few upscale venues that dares to tempt the guests with Russian wine, unimaginable just a couple of years ago.

New opportunities

Sitting on the glass-covered terrace, it’s interesting to speculate about what has changed. The answer lies in a combination of the impact on imports of the devaluation of the rouble, and the growing stories about a renaissance of local wine and small ‘garagiste’ producers who are successfully experimenting with native and international grapes. If it’s no longer a shock to come across a decent Russian wine in a top restaurant, the high prices asked for these bottles – from $60.00 to $120.00 in the White Rabbit – still come as a surprise.

Dmitry Bazashvili, White Rabbit’s sommelier, offers a dozen Russian wines, alongside a couple of hundred from other countries. There are three examples of native Russian grapes and nine blends of local and international varieties. “It’s not our goal to sell specifically Russian wines,” he explains. “Most of our guests are reluctant to perceive local wines as quality ones and it takes a lot of effort and personal tasting experience to change their attitude.” He says that he does a lot of blind tastings, and watches people’s faces change when they see that wines they liked are produced in their country. “Russian wine is still at the experimental stage and has a lot to add to its complexity and overall harmony. It’s obviously a work in progress.” The limited size of the Russian industry and many of its players mean that production costs are higher than they might be elsewhere.

Two bottles from the Usadba Divnomorskoye winery of the Abrau Durso Group command prices of about $85.00 on the White Rabbit’s list. The company’s commercial director Denis Kouznetsov admits that Russian wines are not yet priced for the mass market. High production costs, boosted by the wineries’ reliance on imported rootstock, equipment and chemicals, all mean that, “unfortunately, Russian wines are not cheap to start with”.

Position, position, position

But there are other factors that explain the price restaurants ask for Russian wine. None of the wines on the list could be called ‘local’ to Moscow – the closest wine region, around the city of Rostov-na-Donu, is some 1,100 km south of the capital – and it is a rare Musco- vite who ever gets to see a Russian vineyard. This distance makes it easy for distributors to add high margins to ex-cellar prices. “Wine pricing is a question of positioning, too,” notes sommelier Bazashvili. “As a matter of fact, I will have a hard time persuading our guests that a €20.00 ($23.00) wine can be a quality one, especially when compared to the prices of imported wines that have risen due to the skyrocketing exchange rate of the dollar against the rouble.”

One of the producers on the list is the Vedernikov Winery from the Rostov region, which makes the excellent red Krasnostop Zolotovskiy from the local Krasnostop grape, and a subtle white Sibirkoviy. Its owner, Valery Troychuk, isn’t surprised at the prices being asked for his wines. “In the recent past I had to ask some venues that were charging $170.00 to $230.00 to lower the prices to bring them in line with others.” Taking into account the distributor’s and the restaurant’s margins in Moscow, Troychuk believes $120.00 – five times the actual ex- cellar price – is fair for his top wine.

Wine enthusiast and businessman Mikhail Nikolaev, the founder of the Lefka- dia winery in the Krasnodar region, has three of his wines on the White Rabbit list. Times are tough for importers dealing with rising exchange rates, he says, making it easier for sommeliers and retailers to turn to high-quality Russian wines that offer stable prices. “The distributors are also talking dif- ferently to us these days, it’s the moment of truth.” Only in the wine business since 2004, Nikolaev also acknowledges that positioning has a big role to play in restaurant pricing. “In the end, if a sommelier thinks that our wine is able to compete at these prices, it’s a good thing.”

“Imagine,” says Kouznetsov of Abrau Durso, “All the wineries that are making real progress now simply didn’t exist five to ten years ago. Plus the management of the older ones has changed dramatically.” He believes the changes are positive. “What could hap- pen to a sommelier offering a mediocre Rus- sian wine in a top restaurant? He could eas- ily get beaten up!” he says. “He or she has to make sure the wine’s good enough.”

By 6:00 pm, all of White Rabbit’s tables are occupied and it feels the same as it did before the crisis. With one essential difference – there are Russian wines on the list. Even if there are only a dozen of them, they are standing alongside the finest wines in the world.