Our next live radio show will be on the emerging markets in the wine business. From a European stand point of view, the emerging countries are: China, India and Russia. We already went over some issues related to China and India. Russia is a far more difficult market to reach and understand.
In spite of a reputation for hard drinking, Russians are way behind French, Irish and Czechs in alcohol consumption, with only 9.3 liters a year per capita. Russian traditions in wine and food explain this bad reputation, and the current situation. “Russian cuisine,” explains the author of the Wikipedia article on “Russian cuisine”, derives its rich and varied character from the vast and multicultural expanse of Russia. Its foundations were laid by the peasant food of the rural population in an often harsh climate, with a combination of plentiful fish, poultry, game, mushrooms, berries, and honey. Crops of rye, wheat, barley, and millet provided the ingredients for a plethora of breads, pancakes, cereals, kvass, beer, and vodka. Flavorful soups and stews centered on seasonal or storable produce, fish, and meats. This wholly native food remained the staples for the vast majority of Russians well into the 20th century. Lying on the northern reaches of the ancient Silk Road, as well as Russia’s close proximity to the Caucasus, Persia, and the Ottoman Empire has provided an inescapable Eastern character to its cooking methods (not so much in European Russia but distinguishable in the North Caucasus).”
Later on, from the 16th to the 18th century, Russians imported smoked meats and fish, pastry cooking, salads and green vegetables, chocolate, ice cream, wines, and liquor. This created, for the rich and mighty aristocrats, the various sources of refined and elegant dishes. This trend was confirmed and extended in the 19th century, when the Russian court and aristocracy imported not only the ingredients but also the French and Austrian personnel able to cook the new dishes. That is why, concludes our anonymous author of the Wikipedia article, “Many of the foods that are considered in the West to be traditionally Russian actually come from the Franco-Russian cuisine of the 18th and 19th centuries, and include such widespread dishes as Veal Orloff, Beef Stroganoff, and Sharlotka (Charlotte Russe).”
It was customary for the traditional Russian to drink mostly vodka with his meals. 30 years ago, Russians were drinking 17 liters of wine per capita a year. The rest of their alcoholic consumption was dedicated to beer and vodka. By the mid 1990s, their wine consumption had plummeted to 2.5 liters, but went back up to 5.1 liters in 1998. The main core of their consumption is still vodka and beer.
This difficult history between wine, spirits and food in Russia does not influence so much the newRussia wine consumer whose profile is rather similar to the Indian or Chinese wine consumer. Drinking wine is a sign of status and social success. There are now a few hundred millionaires in Russia: their fortune is estimated at around $3.4 billion dollars. The richest of all those successful businessmen is Roman Abramovich, whose fortune is estimated at $19.2 billion. The income of the average citizen has also increased. The average income of the middle class is now $7,000 (around 4.800 euros) a year, while the national average is around $2,610 (about 1.800 euros) a year. 20 million people are now above the poverty level.
In this relatively prosperous economy, more and more people have a little disposable income. Wine is a good way to spend some money; it is new and trendy as well as a sign of success. Russians drink mostly red wine (70%); white wine accounts for about 25% and rosé wines for the rest. Russians – a little like their American counterparts – have a sweet tooth. They love off-dry and semi-sweet flavors, even in red wines.
Dry wines reflect mostly the more sophisticated drinking habits of the wealthy consumers. Young entrepreneurs and high executives of international corporations are the main clients of the fine wine business. The wealthier wine consumers thrive on First Growth Bordeaux and cult wines from the New World.
The average wine drinker will mostly buy imported wines from Moldova (before the ban), Bulgaria, Georgia and France, with Italy now getting into the picture. The price of a bottle will be in the 3 euros range, but the situation is different in the major cities, like Moscow, St. Petersburg or Kiev. In those cities drinkers have a much higher disposable income and spend more on premium wines.
More traveled, highly educated, with a high income, these new wine drinkers have the time and the will to learn more about wine. They want to have access to the status symbols of the Western world. Wine, like luxury products, is highly desirable for these new consumers.