RTDs in Russia: Red Alert for Stimulants in Moscow
Keeping up with the marathon of legislative changes, political posturing, taxation hikes and advertising restrictions in the freefalling Russian alcoholic drinks market over the past 5 years would prompt one to reach out for a stiff drink- even before factoring the rubble’s plunge or the geopolitical Gordian knot and resulting sanctions into the equation.
Begrudgingly doing so would probably lead to lacing said stiff drink with generous quantities of caffeine in the hope that the temporary buzz would provide short term insulation from the market’s crashing realities. From the 1st of May, even that – admittedly desperate – option will be illegal, at least in Moscow.
For anyone following the tumultuous evolution of the RTD segment this is a familiar narrative. Public outrage and damning tabloid headlines have historically been almost as frequent as the category’s innovation cycles and stimulant-laced iterations remain a favoured target.
The ‘alcopop scourge’ angle ‘sweeping the UK’ during the 90s became a template for alarmist campaigns around the world in the years that followed although the most recent and relevant story actually comes from Russia’s arch-nemesis in the current neo-cold war environment.
Back in 2010 it was the U.S. Food and Drug Administration that warned four companies – including the producer of Four Loko, known on college campuses as “blackout in a can” or so the rumour went, – that the caffeine added to their malt beverages was considered an “unsafe food additive.” The product was soon after recalled and reformulated but its meteoric triple digit rise came to an abrupt and rather sobering stop- a trajectory ironically emulating health advocacy groups’ criticism of the drink’s effects themselves.
Nevertheless, there is an important difference that has largely escaped analysts drawing parallels – beyond the obvious apocalyptic state of the Russian market when compared – with the buoyant US. Four Loco never made it past 4th place in the rankings of RTD sales in the country. The ban on stimulant additives had no actual effect to any of the leading brands and hence the overall US RTD market.
The situation in Russia is very different indeed. According to Euromonitor International, 3 out of the 4 leading RTD brands in Russia (Jaguar, Tenstrike and Chernyj Russkij) are either self-proclaimed ‘alco-energy’ drinks or they heavily feature such variants.
Even more alarmingly for the Russian RTD market, Moscow accounted for 43 out of the 208 million litres of RTDs sold in the country in 2013, so this will soon be acknowledged to be much more than a minor regional issue.
As for the public health impact of such a measure, it should be analysed against the backdrop of Kremlin’s recent move to lower the government-regulated minimum price of vodka for the first time in years.
At least we now know what that -government sanctioned- stiff drink will be.
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