Energy drinks rescue Russia's FAB Boom
development has turned around the fortunes of flavoured alcoholic
beverages in Russia, bringing better opportunities and growth
forecasts, writes Chris Mercer.
Flavoured alcoholic beverages (FABs) have taken a back seat to Russia's "rapidly growing" beer market in recent months. Yet the FAB sector grew 26 per cent in value and 25 per cent in volume last year, says new research from Euromonitor.
Some analysts feared that Russia's FAB boom, along with other major FAB markets like the UK, Japan and US, was grinding to a halt at the end of 2003 after a sharp fall in global sales growth.
But, Euromonitor says FAB producers have worked hard at marketing and product innovation to keep up with the fashion-conscious, young consumers their drinks are aimed at.
Now, the group predicts FABs will grow by another 67 per cent in value and 60 per cent in volume up to 2009.
One of the most successful new trends has been energising FABs, combining alcohol and extracts of guarana and taurin that are commonly used in energy drinks.
These drinks "have become extremely popular with young consumers who live in big cities", says the report.
The big manufacturers have all been launching products: Happyland introduced an energy FAB under its Jaguar brand in 2003, followed by Borodino with XXL, and Bravo Premium with new brands Dosa and EnGINe.
Drinks makers from other sectors are also starting to look at FABs as a way of boosting performance.
Leading vodka manufacturers are delving into FABs to compensate for declining vodka sales in Russia. For example, RVVK launched its Flagman brand miniature as an FAB and has been followed by Topaz and Stolichnaya brand owner Soyuzplodimport, which unveiled Stolichnaya Ice FAB with the help of local soft dirnks maker Ost-Aqua.
Wine-based FABs are also expected to emerge in Russia over the next year, while interest from international brands, such as Smirnoff Ice and Bacardi Breezer, should inspire growth with their strong marketing budgets.
It is young consumers, particularly women aged 17 to 20, who are expected to remain the core market for FABs.
The drinks are popular with this group because they are fashionable and have a high alcohol content - between seven and nine per cent - for a relatively low price of RUR 20 - 25 (US$0.6-0.8, €0.5-0.66).
