INTERVIEW: Russia’s Abrau-Durso to boost exports to 5% of sales ‘16

Interview with Abrau-Durso’s CEO Pavel Titov

MOSCOW, Jun 11 (PRIME) -- Russian sparkling wine producer Abrau-Durso, formerly a tsarist court purveyor, plans to expand exports to 5% of its sales by 2015-2016, CEO Pavel Titov told PRIME in an interview on Tuesday.

The company, which last year floated its shares at home, now sells its wines to Finland, the U.K., Singapore, Denmark, and Israel.

“We are planning to start supplies to China, the U.S. and Brazil ... The bulk of sparkling wine is sold to Finland at the moment, but the most important market from the point of view of quality recognition is the U.K.,” Titov said.

Abrau-Durso is now Russia’s fourth sparkling wine producer by volume with an 8.9% market share.

Titov said that although the market was stagnating and market leaders have cut production volumes, Abrau’s volumes, including shelf presence, continues to rise.

“Our growth must have been conditioned by the fact that we have stopped competing in the segment of other Russian players where prices of 250 rubles or less per bottle compete. This strategy was chosen in 2008, and we are happy to have chosen it – the result was beyond our expectations” Titov said.

Titov said that Abrau is lobbying for the introduction of a minimum price per bottle of sparkling wine to fight counterfeit products, which account for 30-40% of the market.

“Any good faith producer will be in favor of setting a minimum price,” he said.

The Abrau-Durso sparkling wine house was founded in 1870 and only supplied beverages to the monarchy and their court until the 1917 revolution. The company was later the exclusive supplier for the Soviet government. The Soviet Champagne trademark was and continues to be a well-known in Russia, despite objections against the name from French producers of champagne.

“The Abrau-Durso brand is waking up now, or I’d rather say it has woken up,” Titov said.

Abrau-Durso is constantly raising its marketing budget to buck the stagnating market trend, but the situation is exacerbated by Russia’s tradition of drinking sparkling wines mainly during New Year celebrations.

“Given the macroeconomic background, I do not think that we shall see positive dynamics on the Russian consumer market as a whole. Champagne is a festive drink in our country,” he said.

“If the people have nothing to celebrate, it will be drunk in smaller volumes.”

According to Titov, the company, which will produce 25 million bottles this year, wants to branch out into still wines and will make a test batch of two white and one red table wines.

“Abrau-Durso used to produce non-sparkling wines, but the tradition was lost at the end of the 80s of the XX century,” Titov said.

“We have achieved a certain success in sparkling wines. It took the lion’s share of our resources… We should now try a new product, widening the product portfolio is very important for us.”

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