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Interview, Part 1: Russian Standard USA Remains Bullish On U.S. Market

November 28, 2012

After wholesaler realignments and price increases that resulted in flat 2011 performance for its brand portfolio, Russian Standard USA has returned to form this year. CEO Leonid Yangarber reports that his vodka brands are up over 20% this year, and he expects that trend to continue through the remainder of the year. Yangarber recently spoke with Shanken News Daily about Russian Standard USA’s performance.

SND: How are Russian Standard’s vodka brands performing this year?

Yangarber: We made a couple of important decisions last year that impacted our brands. First, we realigned wholesalers in several states. We now have four major wholesaler partners. Our largest is RNDC (in 21 states), then Young’s Market Company (in 10 states), Southern Wine & Spirits (in six states), and M.S. Walker in New England. We also have several small wholesalers in some individual states. Last year we also decided to take a considerable price increase, primarily in our largest markets. We’re very happy with the changes we made. Even though we were flat last year due to those changes, this year our entire portfolio is up between 20%-25% year-to-date.

SND: How significant was the price increase, and what is the pricing now?

Yangarber: The increase was between 5%-15%, depending on the market. Russian Original, our key brand, now has a national average retail price of around $20 a 750-ml. Russian Standard Platinum is about $25-$26. For Russian Gold, which is our newest entry and is still in trial markets, we’re testing several super-premium price levels and will make a determination in the next few months. Imperia, which isn’t under the Russian Standard label in that it’s more of a stand-alone brand, is about $40.

SND: How optimistic are you about this year’s fourth quarter sales?

Yangarber: We’re very optimistic. Our 20%-25% growth this year has been steady month to month. So we see that trend continuing throughout the fourth quarter. Russian Standard Original is back on track, and we are projecting 16% growth with volume at 192,000 cases by year-end. So we are outperforming the category by a substantial margin.

SND: How are Platinum and Imperia doing?

Yangarber: Platinum is still a very young brand with new, distribution-driven momentum. This year it will finish with about 25,000 cases, up 25% in the last couple of years. In recent months we’ve seen momentum increase, with growth at about 40%. Imperia has been repositioned to the upside, so the numbers have been flat lately. But this year we expect to see 10% growth to 6,000 cases.

SND: Where is Russian Gold being sold, and how is it doing?

Yangarber: It’s mostly in our largest markets, like New York, New Jersey, California, Illinois, Georgia and Florida. We’re quite happy with its performance. We’ve positioned it at the high end in terms of price. It was designed for the Russian market for gifting occasions and celebrations. We’re now seeing a lot of repeat purchases in the U.S.


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