E-Malt.com News article: Russia: SABMiller to discover a vein of gold for the entire beer industry if its Peroni Nastro Azzuro becomes popular with Russian consumers

SABMiller has set itself the task of training Russians to drink Italian beer, Ukrbeer.ua published on September, 26.

The company recently launched its Peroni Nastro Azzuro in Russia, positioning it as a beverage for the real connoisseurs of Italian style. However, the majority of experts regard this idea as a doubtful venture. To convince the consumer that the country of Chianti, Prada, and Maserati can also brew premium beer will require several years and millions of euros, experts believe. But, if the idea works, the “style” niche may turn out a vein of gold for the whole beer market.

Russians are always ready to squander fortunes on anything bearing the label Made in Italy. The price set by SABMiller for its new product is 65 – 85 roubles per bottle. Thus, Peroni Nastro Azzuro is referred to the premium segment.

On the international market, the producer positions the brand as Italian style embodied in beer. Over the last three years Peroni Nastro Azzuro entered the markets of the largest European countries, in the US, South Africa, Columbia, India, Australia, Peru, and Puerto Rico. Now it has officially reached Russia as well.

SABMiller purchased the Birra Peroni brewery in 2005. Today, according to Chris Taylor, the brand development manager, no less than five bottles of Peroni Nastro Azzuro are bought each second.

The brewing giant is building Peroni Nastro Azzuro’s promotion campaign on its belonging to Italy’s brand idols. However, Vladimir Jossan, head of Nord Wins Distribution specialising in beer imports in Russia, is doubtful about the efficiency of this tactics.

“The producer tries to unite its product with Italy’s best offerings. But neither consumers, nor Italians themselves associate this beer with the country’s style. Peroni Nastro Azzuro is not a star on the Italian style horizon. Even on a national basis, it is just a mainstream beverage,” he said.

Jossan maintains that Corona Extra, imported in Russia by his company, would look much more organically on Peroni’s prints. He considers Grolsh, which recently joined SABMiller’s portfolio, to be more promising if launched in Russia. Grolsh’s international potential is higher than that of Peroni, the expert believes.

Alexey Fadeev, creative director of Depot WPF brand company, argues: “Everybody knows perfectly – Italy, like France, is not a beer country. It is not clear in what Italian classics differs from any other, and why should Nastro Azzuro suddenly become a model?”

At the same time, other experts note that on the Russian beer market there will always be place for all kinds of new products, even from “non-beer” countries. The specifics of Russian consumers is that they are disloyal, easily switching from one brand to another.

Peroni Nastro Azzuro is currently imported in Russia from Italy, but SABMiller RUS does not rule out bottling it in Russia with the lapse of time. Detached observers, however, agree that if Italian beer is produced in Russia, it will lose its colour in consumers’ perception and will turn into a common domestic beer.

An anonymous expert from a large distribution company commented: “If the beer is bottled in Russia, it will become undrinkable in two-three months. If SABMiller ventures to transfer the brand, they will kill it. Élite consumers will not overpay for Italian beer made in Kaluga (small town in Russia where SABMiller’s brewery is situated).”

Konstantin Gevondyan, Peroni’s brand manager in Russia, sees no difference in geography. “We can cite examples where Peroni Nastro Azzuro is not imported but bottled locally, South Africa, for instance. When the necessary conditions are observed, the quality of a locally manufactured beer does not suffer. When we started brewing Miller in Russia, many people said it turned from American beer into Kaluga beverage. Today this perception barrier has disappeared, and Miller’s high sales testify to that. Now almost all popular world beers are brewed under license in Russia.”

Gevondyan said at the moment Peroni Nastro Azzuro is promoted only in Moscow and St. Petersburg, but in the future the company will target regional consumers as well. According to the most optimistic expert forecasts, in two years Peroni will be able to pretend to 0.3% of the nation’s market volume. Stella Artois and Redd’s currently hold approximately the same shares.

“Because of the great number of premium beer brands in Russia and, consequently, high competition, it will be difficult enough to win a serious share,” Maxim Bykovsky, an expert with the Azbuka Vkusa retail network. “Corona and Miller are very strong in the niche Peroni Nastro Azzuro aspires to.”

Oleg Tkachyov from the Soldis advertising agency draws attention to SABMiller’s declaration that Peroni Nastro Azzuro is aiming at competing with champagnes and wines: “If the company manages to break the stereotype of beer’s non-glamourness, it will make possible launching an entire range of hyperpremium brands with corresponding image and price components,” he forecasts. “Thus, this project should be viewed as a testing area for fine-tuning of the concept of a beer which “is prestigious to drink, just like champagne or wine.”

“So far there has not been any example of successful importing an Italian beer in Russia. If SABMiller manages to do this, it will secure itself a place in the Hall of Fame of marketing,” a representative of one of leading beermakers commented on terms of anonymity.

(1 euro = 36.49 roubles as of October, 1)


01 October, 2008