One year in vodka

2011 threw up various unique challenges in the global vodka market.

THE GLOBAL vodka market has thrown up a number of challenges over the course of 2011, not least in eastern Europe.

According to Alina Zhuk, head of marketing at Belarusian vodka TM Bulbash, it all started with the relicensing which took place in Russia towards the beginning of the year.

“This took out some key players and influenced to the activity of major vodka brands, who had to change their distributors,” said Zhuk. “This uncertain situation during first half of the year caused a decline in the Russian vodka market of 1.2% year-on-year, according to the Russian Statistics Committee. Since Russia is the world’s second-biggest vodka market we can consider that this recession caused changes in the original sales plans of many brands.”

Ominously, Russia plans to double excise tax rates two times by 2014. If this comes to pass, experts forecast significant growth of the black market.

In Belarus, however, the market has seen sales growth of 14.8% over the same period, according to the Belarusian Statistics Committee.

Zhuk explained: “The first reason for this is the government’s policy of reducing consumption of cheap fruit wines, which are a very popular product for people on low incomes and still have a great share of the alcohol market in the former USSR.

“Also the decline of imported drinks’ share of the market in Belarus, due to the global crisis and unfavourable exchange rates, distributors were not able to supply enough quantity of the cheap, unbranded imported drinks such as brandy and wines from Moldova for instance, which used to maintain a healthy share of the market.”

Zhuk is firmly of the opinion that, as economies recover, strong brands will gain an ever-increasing share of the vodka market.

“In our opinion the vodka market will become stronger in 2012 and the market will be split quite equally among the strong brands.

“New strong Russian players will appear in the near future with strong marketing and big investments.

“Sales of Bulbash increased over 2011 both in our local market and in export markets. Due to the economic crisis and the devaluation of national currency our vodka became more attractive for international distributors. We forecast that export share will rise over the course of our next financial period.”

Zhuk is also in no doubt as to which styles of vodka bartenders should be pushing in order to maximize their returns from the category.

“In my opinion barmen should choose vodkas which offer different tastes in it’s range, because flavored vodkas and spirits are very popular among young people right now.”