You are What You Drink – Economizing, Russia’s Middle Class Turns from Scotch to Vodka

Paul Goble

            Staunton, February 19 – Forced to economize because of the economic crisis, Russia’s middle income groups have stopped buying whiskey imported from abroad and returned to drinking Russian vodka.  This shift has not affected those at the top of the Russian income pyramid: sales of luxury alcohol brands remain strong.

            Svelana Naumova, the Russian representative of the Diageo Company which handles brands like Johnnie Walker, Smirnov, Captain Morgan, J&B and White Horse, tells the Rambler News Service that price has become ever more important in Russian decisions about alcohol purchases (rns.online/consumer-market/Crednii-klass-v-Rossii-pereshel-v-krizis-s-viski-na-vodku-2017-02-18/ and polit.ru/article/2017/02/18/srednyklass/).

            Middle income groups have stopped buying mid-range imported alcohol and shifted their consumption toward domestic vodka, she continues, while the wealthiest groups have continued to keep sales of premium scotch at about the same levels as a year before.

            “In 2015 and the beginning of 2016,” Naumova says, “less expensive imported whiskey suffered” the most in loss sales, something she adds is “logical” given that its buyers are the ones who have seen their incomes contract the most.  One consequence of this is that vodka now again forms 85 percent of the Russian market for strong alcoholic drinks.

            If and when the economy improves, she adds, Russians are likely to return to purchasing scotch and other imported categories of such drinks.  Indeed, in those areas where there has been a stabilization or even a slight uptick in the economy, that trend is already noticeable.

            In other comments, she points out that “the process of import substitution and the ‘patriotic’ attitude of Russians to domestic products has not led to an increase in competition between foreign and Russian spirits producers.”  They are in some ways separate markets, and demand for the imports has not disappeared.

            Around the world, Naumova says, people are drinking more rum and whisky, and Russia is not an exception to this pattern. Consequently, her company expects serious growth in demand as the Russian economy comes back.