Vodka is ‘the drink of the past’ in Eastern Europe

31st July, 2014 by Amy Hopkins

Vodka is now seen as “the drink of the past” by younger consumers in Eastern Europe, giving whisky brands opportunities for rapid growth, the CEO of Chivas Brothers has said.

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Eastern European countries such as Russia and Poland hold a great amount of potential for whisky brands, according to the CEO of Chivas Brothers

Speaking to The Spirits Business, Laurent Lacassagne, CEO of Chivas Brothers, the whisky and gin arm of French drinks group Pernod Ricard, said that while countries in Eastern Europe using favoured white spirits, younger consumers are driving demand for international, premium brown spirits.

“Brown spirits are enjoying a kind of shift in attraction in market across the world,” he said. “In the past two decades, other spirits have been very strong, but we are starting to see a change.

“In particular Eastern Europe is very attractive for our brands. We have grown consistently in this region for the past five years.

“In these markets vodka was historically very popular, but this is probably now largely seen as the drink of the past among younger consumers who are increasingly attracted to brown spirits.”

Lacassagne added that within the Eastern European region, Russia and Poland were the main drivers for growth. Russian, he said, is a key strategy market for Chivas Brothers, while Poland is the third largest market for Ballantine’s.

Chivas ‘under-represented’ in Latin America

Christian Porta, Lacassagne’s predecessor at Chivas, told The Spirits Business in 2012 that Chivas’s brands were under-represented in Latin America, lagging behind main competitor Diageo.

On this, Lacassagne said that the “situation has improved” in these markets and that both Chivas Regal and Ballantine’s blended Scotch whiskies are experiencing double digit growth.

“It is not possible completely change the situation in two years time but we have strong investment and plans in Brazil, Mexico and Colombia, and we enjoy good progress in these markets, and we are also gaining market share.

“What Christian said is still true in the sense that we are still behind out main competitor, but we are enjoying strong progress in the region.”

Furthermore, while the group has experienced disappointing sales in Asia as a result of China’s on-going campaign of austerity, Lacassagne said that these are “short-term challenges”.

“The trends in 2013/14 have been challenging as we are facing a slowdown in some Asian markets,” he said. “These are short-term challenges but long-term trends are more robust and stronger than ever.

“I have a lot of confidence in our Scotch whisky business in these markets. There’s a lot of investment in this industry and we are seeing this in our own brands and production capacity. We are confident for the future.”

More insight into Pernod Ricard’s performance in these regions is expected when Pernod Ricard announces its full year financial results for 2013/14 at the end of August.

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