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MARKETING BRAND BUILDER: From Russia with love

30 July 2007 By db staff writer

Since it was first exported 50 years ago, Stolichnaya vodka has undergone massive change. Pernod Ricard is now rebuilding the legend, writes Patience Gould

Arguably Stolichnaya is not only the most recognised brand of vodka on the international circuit but also the only Russian brand (of anything) to beat a path to global fame and fortune. Put simply it is a Russian icon.

First exported over 50 years ago it has since captured the imagination of both consumers and trade the world over and along the way has chalked up a number of firsts. Stoli was the first to launch flavoured vodkas back in the 1970s; also the first to introduce super premium vodka (Gold) in 1989; and the first to introduce ultra-premium vodka (Elit by Stolichnaya) in 2004.

These facts are made all the more incredible when you consider that brand building only became part of the Stoli programme at the turn of the millennium, when the US trade and marketing rights were sold to the then UK multinational Allied Domecq in 2001. The company went on to secure the international rights in the spring of 2005. However, that summer Pernod Ricard bagged Allied Domecq and it was at the beginning of 2006 that the company acquired the international trade and marketing rights from SPI, the Cyprus-based, now privatised, company, which owns the Stoli trademark outside the Russian Federation. As a result in less than a year the brand went from the Allied Domecq-owned distribution network into Pernod Ricard’s, where it is now happily ensconced.

Key Facts

Stoli was the first branded vodka to be exported from Russia over 50 years ago
Since then it’s had a chequered history in terms of international distribution. In 1991 the Soviet Union collapsed and brands were privatised. SPI (Sojuzplodimport) came on to the stage
In 2001 US trade and marketing rights were acquired by Allied Domecq and in early 2005 global rights were secured
In the summer of 2005 Pernod Ricard acquired Allied Domecq and the following year the international trade and marketing rights for Stoli outside Russia
Pernod Ricard’s ultimate goal is to possess the brand outright, and there are ongoing negotiations with the Russian Government and SPI
The Stoli range comprises six flavours: Rasberi, Vanil, Cranberi, Citros, Peachik and Blueberi, as well as the standard Red; premium Blue, super premium Gold and ultra premium Elit

Aside from implementing a global platform for the brand, certain basic fundamentals had to be sorted out. Part of this involved upgrading the alcoholic strength of the brand, as it had been put down to 37.5% in certain markets, including the UK. The red standard is now 40% ABV “all over”, the premium Stoli Blue weighs in at 50% ABV, while Gold and Elit come in at 40% ABV. Interestingly, the flavours are 35% ABV in the US where they are mainly consumed as a “sipping drink over the rocks”, and 37.5% in the rest of the world.

Chequered history
“Stoli has been around for over a century – but lack of consistency has led to a chequered history,” says The Stolichnaya Brand Organisation’s chief Ian Jamieson. “For the last 18 months and two years we have been sorting things out – and it became evident that its Russian heritage and iconic status had to be central to the marketing.”

To this end the company has rolled out a e60m-plus advertising campaign, encompassing print, TV and cinema, under the banner: “Choose Authenticity”, a push that dispels any doubt – if any existed – that this is a Russian vodka. “This is not a relaunch – it’s rebuilding the legend,” says Jamieson. “It’s uncompromising, bold and stresses that Stoli is an authentic Russian brand – this needs to be reflected in everything we do. Authenticity is a big thing these days.” The global 360-degree marketing campaign is now “live” in 10 markets – including the US, which historically has been the vodka’s main stamping ground, and where volume currently stands at 2.2 million cases. Furthermore, the recent introduction of Stoli Blueberi – the sixth flavour – has already proved successful with volume nudging 100,000 cases, making it the third best launch in the US last year.

Now with its annual 3m-plus case tally (outside Russia), Stoli is also beginning to motor around the world. In the UK volume is “well over“ 100,000 cases and is on course to double by the end of the year; it’s the same story in Greece, while in Japan – a market not noted for imported white spirits – case sales are a promising 20,000. In addition first orders have come in from both Thailand and Guatemala – all of which points to a tremendous future for the brand.

“Stoli is growing very, very fast in a category which itself is growing well,” says Jamieson. “It is now sold in 83 markets and we are very confident. We have filled the brand’s tank and we are ready to roll.”

However, there is just one fly in the ointment: Pernod Ricard does not own the brand outright – and this remains the “key corporate objective”. Negotiations between SPI, Pernod Ricard and the Russian government are ongoing. “Life would be so much easier,” says Jamieson. “Meanwhile negotiations continue but time lines are elastic.”