Russia sees surge in foreign wine demand

- Last updated on GMT

Related tags: Cabernet sauvignon

Russian firm Sanserite will import new, Spanish wines aimed solely
at Russia as demand for foreign wine increases thanks to rising
consumption, higher disposable incomes and a declining domestic
wine industry, reports Angela Drujinina.

Wine consumption and sales in Russia has risen by 15 and 25 per cent respectively in the last few years. It is expected that the tendency will continue and experts forecast further wine market growth of 12 per cent.

The Moscow market alone is worth US$300m, according to a rating drawn up by RosBusinessConsulting agency.

That is why Sanserite has decided to launch new dry and semi-sweet wines in its Castillo and Don Torso ranges, aimed at the lowest price category so as to attract new consumers.

"We think that their price will not be above RUR150-170 ($5-5.6)"​ said Dmitry Bolshakov, Sanserite Marketing Manager. "It is worth mentioning that the Russian wine market is not yet developed. You can find on the market both cheap wines (less than RUR70 ($2.5)), and also very expensive French wines, which cost more than RUR1500.

"You can find these products on the shelves of the same store! We consider that there will be a great demand for the novelties that we will bring. The customer does not only want to buy expensive wine, but also wants the possibility to purchase cheap, quality, imported wines every day."

The wines are bottled in classic dark bottles and the label depicts a bull with the silhouette of a castle. This should single out the wines as Spanish.

Castillo series wines are made with Tempranillo grapes and are kept in oak barrels for more than 12 months. Don Torosso series wines are simpler and are considered as table wines. They are manufactured with Tempranillo and Irene grapes.

"We know that Russians like red wines more,"​ said Bolshakov."We asked the manufacturer to produce a series of semi-sweet wines specially for Russia. These kinds of wines are very popular with our customers. It is probably due to the Russian culture of manufacturing nastoyka and fortified wines in domestic conditions. White wine consumption is 1.5-2 times less than red wine consumption."

Sanserite said there were about 50 importers of Spanish wines on the Russian market. Many distributors operate further down the line, though the top three on the market are well ahead of the others. Vinnyi Mir is the leading distributor with a 35 per cent market share.

More than half of wines sold in Russia are imported. Imports have become increasingly important in Russia as the domestic wine industry faces decline.

The Russian Ministry of Agriculture said that wine production has declined six times and constitutes under a quarter of the country's wine-making capacity compared to 1980. For the first 10 months of 2004, wine imports increased by 52 per cent and importers' income increased by 41.4 per cent on average.

Some firms have experienced sales growth of nearly 80 per cent, while others have more modest growth of around 17 per cent. Experts say that the purchasing capacity of Russian consumers increased by €1 in 2004, compared with 2003.

Sanserite will get its new wines from Spanish firm Bodegas Navarro Lopes, which has won a number of quality awards in its 100 years of wine-making and bottling. Sanserite currently imports more than 40 different brands and has its own retail chain.

Spanish wine has been particularly popular among Russia's biggest distributors. Wines from Spain make up more than 40 per cent of Vinnyi Mir's sales, yet analysts believe wines from all over Europe and America will become increasingly popular in Russia over the next few years.

Related topics: Processing & Packaging, Emerging Markets

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