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