Andrew Osborn








Vodkas Reflect Allure of Power --- In Russia, Putin-Inspired Brand Is Big Seller, but Not Medvedev's Namesake

The Wall Street Journal, 10th March 2009 11:30

By Andrew Osborn

Moscow -- Putinka vodka piggybacked on the cult-like popularity of Vladimir Putin to become one of Russia's top-selling brands of spirits. For a new vodka named after Mr. Putin's presidential successor, Putinka is proving to be as tough an act to follow as Mr. Putin himself.

Medvedeff vodka, named after President Dmitry Medvedev, appeared in shops here in December, next to bottles of Putinka vodka and for the same price -- 150 rubles, or roughly $4, per half liter. But, while Putinka, which hit the market in 2003, remains Russia's second-best-selling vodka, Medvedeff has yet to find a place among the top 20.

The disparity reflects Russia's political reality. Mr. Putin left the presidency in May, accepting the more-junior position of prime minister, yet polls show he remains more popular than Mr. Medvedev and that his aura of absolute power hasn't waned. A recent survey from the Levada polling center in Moscow showed 87% of respondents thought "real power" remained either completely or significantly in Mr. Putin's hands.

Using Mr. Putin's image to sell vodka was a smart move by the creators of Putinka, an affectionate take on the former president's surname. The brand has annual sales of more than $500 million.

But Russia's $11 billion vodka market is crowded and highly competitive. To stand out, experts say, a vodka maker needs a unique brand and needs to market it heavily.

Medvedeff's parentage is as opaque as Kremlin politics. A vodka factory near Moscow confirms it distills the vodka but says other details -- such as production volumes and who owns the brand -- are "a secret." TPG Kristall, the factory's owner, also refuses to identify the brand's owner. TPG Kristall's president declined to comment for this article but told the daily Vedomosti that his company was making a small quantity of Medvedeff for a Moscow vodka maker to test the market.

Market researchers say Medvedeff's market share is invisible so far. Business Analytica, which publishes vodka-sales figures, says Medvedeff's impact, if any, will only become apparent at the end of March.

"It has no chances," says Alexander Yeremenko, managing director of branding consultant BrandLab. He says the fact that Mr. Medvedev's authority is so tentative means drinkers won't embrace the drink in the same way as they have Putinka.

Vinexim, owner of the Putinka brand, spent tens of millions of dollars promoting and advertising it in recent years. "You'd need to spend 10 or 20 times that," Mr. Yeremenko says of Medvedeff.

Arseniy Soldau, president of branding agency Soldis, says he, too, is a skeptic. He fears that Mr. Medvedev, in Russian minds, is too closely associated with the unfolding economic crisis that is likely to get worse. By contrast, branding gurus and pollsters say Mr. Putin is associated with a period of rising prosperity when oil prices were high and real incomes here improved.

Stanislav Kaufman, the man who dreamt up Putinka, says he can't take Medvedeff seriously. "Mr. Medvedev is not a vodka personality," he says. "Mr. Putin is."

Mr. Kaufman says Mr. Putin's background as a spy is a good match for a drink that is at least 40% alcohol. Mr. Medvedev, a former corporate lawyer who has touted himself as a liberal modernizer, just doesn't have the right image, he adds. Brand gurus say the Medvedeff brand is also slightly confusing because it evokes images of bears -- medvedi in Russian -- as well as the president.

A Kremlin spokesman said he wasn't sure if the president was aware of the new vodka, but said such initiatives generally weren't welcomed. A spokesman for Mr. Putin has said that Mr. Putin has "an extraordinarily negative attitude" towards attempts to use his name for commercial purposes, but in the case of Putinka has no legal means to block it.

Russia's vodka consumption, which fell or stagnated during its boom, is likely to rebound as the global economic crisis continues, with many Russians turning to illegal vodka, which costs less than 80 rubles per half liter, says Dmitry Dobrov, of Rosspirtprom, Russia's state-owned spirits monopoly. Vinexim's Mr. Kaufman thinks those who can afford a bit more will be drinking Putinka, not Medvedeff.