The Group's principal objective is to become the market leader in the Russian distilled spirits business in terms of both market share and profitability. In order to achieve this, the Group must be present in all profitable market price segments and niches with a strong and highly recognizable portfolio of brands. Once the Group achieves its objectives in the Russian market it would consider launching some of its category champions in the most attractive export markets.
The Group's main strategies to achieve market leadership include the following:
Expand and enhance the distribution platform
The Group aims to further develop its nationwide distribution network. The Group intends to gradually introduce dedicated sales teams and direct sales and minimize its reliance on sales via non-exclusive distributors, with the aim of increasing penetration is accompanied by increased profitability as we retain the profit margins earned by independent distributors. In addition, the Group will seek increased listings of its premium brands with hotels, restaurants and cafes ("HoReCa") in Moscow, St. Petersburg and other heavily populated Russian cities. The Group envisages a distribution system that will become the most efficient means to introduce new spirits and third party spirits into the Russian market.
Support branding strategy with aggressive marketing
The Group will channel significant resources to brand support and advertising. While most of the focus will be on the federal brands slated to be segment leaders, the Group is intent on preserving the significant market presence it has among regional brands through targeted campaigns and product restyling. The Group plans to improve brand awareness through national and regional advertising campaigns in the press and on pay-cable and satellite TV channels, as well as through public event sponsorship.
Enhance brand portfolio with brand extensions and new brands
Another component of the Group's strategy is maintaining a balanced brand portfolio which covers all profitable segments in the Russian vodka market. The Group will seek to increase its market share through entering new market segments and niches with brand extensions or new brands.
To capture the significant growth in the premium and super premium price segments the Group will seek to promote the premium Beluga brand launching national advertising in the press and on pay-cable and satellite TV channels, as well as by using special product shelves in stores and retail chains or participating in various public events as a sponsor or promoter.
Fully exploit economies of scale
The Group, due to its size, enjoys significant costs advantage in both product costs and distribution, in addition to the flexibility that comes from being able to combine regional presence with national brands and centralized management control. In this regards, the Group will continue to evaluate acquisitions that contribute to enhance its market share or where it identifies cost saving via synergies with particular components of its existing operations.