Abrau-Durso Group, Russia’s leading producer of sparkling wine, aims to reach an ambitious milestone by 2025, with projected exports climbing to two million bottles, according to the company’s president and chairman, Pavel Titov.
This target reflects the group’s intensified focus on expanding its international footprint, especially amid recent disruptions in several export markets.
Speaking at the third Russian Winemaking Forum, Titov expressed optimism about the group’s export potential. “At this point, the results [for exports] are modest, but we hope to reach 2 million bottles in exports. This will probably already happen next year,” he stated. The company’s current strategy includes leveraging new export channels, particularly as geopolitical and economic challenges have severely curtailed access to certain regions.
Challenges and Opportunities in the Chinese Market
The Chinese market, in particular, stands out as a key focus for Abrau-Durso’s export ambitions, yet remains a challenging arena. While Chinese demand for wine has been historically low, the potential for sudden growth is notable. Titov highlighted this potential, stating, “There is little understanding of wine in the country, not just Russian but in general. But we see big potential...in China something can have no movement for a long time and then grow with explosive force, so one can't ignore this market.”
Abrau-Durso’s promotional efforts are primarily aimed at establishing brand awareness and consumer familiarity in China, a market that could yield substantial returns if wine consumption trends shift. The company faces significant competition here, with both local producers and established European and Australian brands vying for attention in the mid-to-premium price segments.
Shifting Trends in Chinese Alcoholic Beverage Preferences
Despite Russia’s strategic efforts, the Chinese market has shown a distinct move away from grape-based wines in recent years. As Strategy Partners' expert Vladimir Shaforostov noted, “Grape wine consumption in China has been declining since 2018 due to more popular Asian trends, [such as] Korean, Japanese traditions of alcoholic beverage consumption.” Local preferences have been gravitating toward beverages like soju and various rice wines, which are seeing double-digit growth.
Yet, there is a silver lining for Russian producers. Russian wines have gained some recognition in China, with certain brands and regions already known among Chinese consumers. By strategically positioning their products, Russian wine producers, including Abrau-Durso, can potentially carve out a niche in a market where European, Australian, and local competitors are prevalent.
Wine Imports and Market Potential in China
While wine imports in China have decreased by 64% from 2018 to 2023, Russian wines saw a 10% increase in the first half of 2024, according to data shared by Mark Pen of the Russian-Chinese company Sunrise Group. Although Chinese wine consumption, at an estimated 1.5 billion liters for 2024, is low on a per capita basis, the growing interest presents a promising opportunity. Pen stressed that “the culture of wine consumption in China really needs to be cultivated from scratch,” adding that while this challenge is considerable, rising interest in Russian wines could position brands like Abrau-Durso for long-term growth.
A Sparkling New Year for Russian Consumers
On the domestic front, Abrau-Durso is preparing to meet seasonal demand for New Year celebrations, a peak period for sparkling wine consumption in Russia. Titov assured that there would be ample supply for the holidays, adding, “There will be enough sparkling wine, prices will probably not change until the end of the year. Basically, there will be a New Year with a sparkling mood.”
With its ambitious export goals, robust domestic production, and strategic focus on the Chinese market, Abrau-Durso is poised to strengthen its international standing. If successful, this expansion could contribute to broader recognition of Russian sparkling wines on the world stage, potentially transforming Abrau-Durso into a global name in sparkling wines.
Source: Interfax