Russian Champagne Bar

Disclaimer: When I use the broad term of “wine” below I refer to red wine and white wine unless otherwise specified.
In the USSR during the times of the Soviet Union wine production was essentially bulk wine of low quality produced in large quantities. After the breakup of the Soviet Union wine production tanked altogether. However, over the past 10 years substantial investment has flown into wine production to the south of Russia. While there are still mass producers of bulk wine where the concept is quality over quantity the opposite has also emerged. A number of boutique wineries have sprung up where the concept is the inverse: quality over quantity and with the ensuing production levels being rather limited.
The vast majority of Russian wine is sold within Russia. The two main regional markets being Moscow and St. Petersburg. In the case of Crimean wine the reason for this is obvious. Few countries around the world would allow it to be imported. In the case of wine produced on the mainland in Krasnodar and Rostov regions the reason is due to market fundamentals. A relatively small output for a relative large market like the Russian means that demand outstrips supply. The second reason is that Russian wine is largely unknown abroad and that the international market is already well supplied and very competitive. For the Russian wine producer it would be vastly easier to expand by selling a bit more in the domestic market or to other CIS countries. However, the prize of being an exporter to western markets is greater than simply the sales generated in the process. It is the ultimate proof of validity and stamp of quality for a product if it sells to the discerning Western consumer. The ultimate proofess being when consumers voluntarily part way with their hard earned cash in return for a product of which they know nothing beforehand. Georgian wine has received a lot of publicity over the past decade but even so the by far biggest market for Georgian wine is Russia. This shows the difficulty of making inroads in an international market with strong incumbents and long established consumer preferences.

In a historical perspective overseas producers of wine like Chile, Australia, South Africa have seen some success in wine exports. However, the window of opportunity available to wine producers from those countries during the 1980s was vastly different from the situation as of today. The situation at that time resembled the US car market during the 1970s. Big gas guzzlers requiring frequent repairs was the norm but those vehicles were predicated on cheap gas and a growing economy with low employment, and consumers with money to spend. The crisis of 1970s with price hikes on gas many times over coupled with unemployment, inflationary pressure, and stagnating wages meant that reliable Japanese cars with a lot of mileage made inroads. Similarly European producers of wine which were all dominant historically produced wine with certain weaknesses. Price and limited information available to the average consumer being the main culprits. The market was split between high-end wine which would sell at high prices out of reach for most consumers and low-end bulk wine of poor quality. Some progress had been made in California where the varietal wine had been invented. Thus it was told clearly on the label which grape had been used, the producer, and the region – for instance California. Compared to this straight forward label a French bottle of wine would provide little or none of this information. The region would usually be some sub-region or a very specific district nobody had ever heard about. The grapes used and the proportions of the blend would not be specified, rather it would be expected that the consumer should know that a bottle from St. Emilion is made from Merlot, Cabernet Sauvignon, and Cabernet Franc. Furthermore specific classifications which would indicate how long the wine had aged etc. would all be implicit but never spelled out. The so called overseas or new world wines from Chile et al would be successful in capturing this middle market. The value proposition would be to deliver a ready to drink, quality wine, at a reasonable price with the added benefit of easy to understand info relating to the product and in the marketing. Later on European wine producing countries like Spain, Italy, and France would answer the challenge and successfully capture part of the midmarket by adopting some of the tactics which had made overseas wine popular in the first place.
The high-end is still dominated by French wine in particular, secondarily by Italian wines and from very specific districts. The market for high-end wine is very difficult to penetrate. While it is easy to distinguish oneself from the midmarket at the high-end, the mid market has the problem that there is nothing that really distinguishes one bottle from another. Grapes, production techniques, marketing etc. it is all freely available to anyone who happens to live in a geographical zone which allows for wine production. Bulk wine at the low end of the market is by definition low margin and thus not very useful for exports. It is indistinguishable and commands low consumer confidence with regard to the quality.

High-end red wine is dominated by French appellations in particular Bordeaux and Burgundy, and secondarily by Italian wine from Tuscany, Piedmont. The primary overseas wine region being California. White wine is not as prestigious but the most revered areas tend to be Bourgogne and Chablis.  Port wine is as the name indicates 100% dominated by Portugal and the region around O’Porto. Volume of port wine and other dessert wines is considerably smaller than that of red and white wine. Rosé wines do not have any prestigious top.
The concept of appellation of origin whereby only products originating in a specific area can apply an otherwise generic term means that the supply of certain products is highly limited.
Cognac to most people is the generic form for a specific kind of alcohol but in fact cognac is only produced in a small French region of this name. All other products produced this way are called brandy. Grappa, Armagnac, Port wine etc. are also protected.
In the case of sparkling wine the confusion stems from champagne which is generic and specific all at the same time. All French sparkling wines from the small district of Champagne can put champagne on the label. All other bubbly wines made applying the champagne method will have to use a denominator like Sekt, Cava, Spumante, Prosecco, Espumante or something else.
Interestingly during Czarist times there was a native champagne production in Russia. For instance in Crimea at Novi Svet or close to the Czarist summer residence in Yalta at the winery Massandra (though mainly renown for its dessert wines). Champagne production also has a long tradition on the mainland for instance at Abrau Durso in Krasnodar Krai. The Russian nobility had for long consumed vast quantities of champagne and eventually a few dedicated souls decided to make their own. French wine makers were invited and production took off. Thus while high quality red wine is a rather recent phenomenon in Russia, champagne and dessert wines have a history dating back more than a 100 years.

As mentioned above the market for high-end red wine is rather impenetrable while high-end white wine does not command much interest. Champagne on the other hand is the undisputed leader in the sparkling wine market and face very little competition from a secondary market for high-end champagne method but non-champagne sparkling wines. No district in Italy, Spain or elsewhere is seen as a suitable alternative. It is champagne or nothing.
This leaves a market opening for a high-end champagne alternative, since champagne has difficulty in meeting demand from a growing global population of affluent consumers with enough spending power to splash out on the bobbly water. And because the modern consumer is always craving for something new, especially if it comes with a story attached.

Russia has the tradition and experience when it comes to producing champagne style wine. Furthermore since the court of the Czars was by far the most lavish from the French Revolution and until the Russian Revolution it has the history to provide the bling for an upscale champagne style sparkling wine brand. A note of caution: The name itself being an important obstacle to overcome. “Champagne” is out of reach, “sparkling wine” is generic, “igristoe vino” hard to pronounce. . .
A successful entry onto the world stage by Russian champagne may open the door to other Russian wines as well. Any wine or any clothing brand coming out of France has an innate advantage simply by association. Russia needs a success story in order to break the ice and achieve this link of positive association.

Russia in the World

However, to sell anything Russian in the world of today is a hard sell. A good news story about Russia is a bad story in the mainstream media landscape in the West. Almost any act by Russia is looked upon with suspicion and interpreted as an act of bad will. If the consumer cannot trust the Russian government or Russia as a country how can he or she possibly trust a Russian product. How can the association between a consumer and a Russian product possibly be interpreted in direction of anything positive. That is the great challenge any Russian branded product will face in the export market in the second decade of the 21st century.

and I digress . . .
In the world of sporting goods dominated by such brands as Adidas, Nike, Puma, and New Balance a new marketing and distribution strategy has sprung up over the course of the past 10 years. It is called a key city strategy. The realization is that a few select cities across the world have an outsize influence when it comes to creating and dissipating trends, while at the same time the larger metro areas across the world are increasingly the main markets due to high population levels and elevated income levels. In an earlier industrial age of manufacturing people would be spread across a country according to where production would take place and competitive advantage would stem for easy access to raw materials, or transportation. Not so any more. In the case of Adidas their sales in Shanghai alone equals those of Switzerland and Austria combined. Taking population levels into consideration spending per capita might not be higher in Shanghai, but since this one city has a population and wealth equal to several midsize European nation states sales are comparable. What makes Shanghai a key city apart from the direct sales that it generates is the fact that the city is kind of a hub or a platform for the wider 1.4 billion Chinese market. And in the future Shanghai will potentially rival London and NYC when it comes to global reach. Fashion trends, media exposure through mass media, events, social media coverage through tourism and influencer visits make Shanghai a very valuable marketing and advertising channel. The top at the global hierarchy of cities is very slim. Adidas has designated just 6 global key cities: London, Paris, NY, LA, Shanghai, Tokyo. Nike is a bit more generous and has an additional 6 cities: Mexico DF, Berlin, Milano, Barcelona, Seoul, Beijing. So what we are talking about are key cities in major economies. These cities are characterized by being global hubs and have a massive reach nationally and internationally. Important cities like Sao Paulo, Moscow, Mumbai, New Delhi, Sydney, Chicago, Madrid, Dubai, HK, Singapore etc. are not included.
Going back to the original theme, the Russian wine industry. What is the best way to brand a product ? By running advertising campaigns online and in traditional mass media trying to praise the virtues of an unknown entity in a 2D framework. Or alternatively to let people try it and interact with it using all of their senses in the real world?
Since September 2017 there has been a new park in Moscow, Park Zaryadye, located a stone’s throw from the Red Square and the Kremlin. The interesting thing about the park is that the idea is two fold. To pull in the surrounding city, as well as to present different landscapes from across the vast Russian territory all at the very center of Moscow. Another trend which has sprung up in Moscow over the past few years is that of regional cuisine. Rather than Planeta Sushi (JP) and Il Patio (IT) or MuhMuh (traditional Russian) the idea is to present dishes from Siberia or the Far East etc. with ingredients sourced locally in Russia. Russia has woken up to the fact that there is a world outside the Big 2, Moscow and St. Petersburg. Russia has realized that the country has a largely unexploited potential in finalized agricultural produces.

While Russia is world famous for its vodka and caviar, other fantastic products of local origin like mors ( a berry beverage, non alcoholic) and nastoika (vodka infusion) are other high quality and natural products which are very popular in Russia. Samagon is a homemade sort of alcohol similar to vodka often produced in dacha (country cottage) from home grown fruits. In other words Russia has a range of great beverages which are kind of unique even if similar versions are found elsewhere, and which are widely consumed throughout Russia.
and at this point I digress again . . .
While Russia is well-known internationally for the communist Soviet Union and the empire of the Czars less is known about its long standing scientific tradition. Many Russians have contributed greatly within their respective fields in science or art. Some have become famous after having left Russia / USSR while others have made their contribution from the home country. In either case their contributions being invaluable to the world at large.
In music, performing arts like ballet, and in literature Russia has a certain international recognition. Bolshoi Theatre, Stravinsky, Dostoevsky, Pushkin are well-known names among people globally even when they have no connection to Russia whatsoever. Thus looking beyond the current day’s political standoff Russia has for a very long time been a participating member of the international community contributing greatly in many fields and genres.

Thus as inspiration and as building blocks there is the beauty of the country, taking up one eight of the world’s landmass, and the long and accomplished history of intellectual achievement. Both of  which run counter to current political and economic events.
The greatest promoter of peace has always been trade. If people of different background interchange products and services which by definition will benefit both parties, there is a strong incentive to continue and to deepen the relation. Trade leads to the exchange of ideas and brings cultural understanding. Trade connects people so that a rupture will be painful to all parties. Trade is a much better promoter of peace and security than military alliances like NATO.
Leading to….. The perfect source of inspiration for not just a posh Champagne bar but also for a different environment where it is not so much about the bling as about the bang in the sense of intellectual exploration and explosion.

Prize Contest

Admittedly a veryyyyyyyyyyyyy long preamble but finally we have arrived at the end of the beginning. It is now about time to get down to business and have the essence squeezed out.
Thus the brief goes like this. . .
We will kindly ask the contestants to provide an entry consisting of 3 pages:
First page will be a description of the project in written format. Language English.
Second page will be sketch of a Russian champagne bar kept in exclusive, impeccable style and inspired by the style of the Empire of the Czars
A few suggestions though by no means mandatory features: no screens! this is an analog venue . . . , live classical music at a small stage which will appeal to hearing. Other senses like smell, taste, vision are accommodated through the champagne itself, but how about touching ? . . . Luxury is essentially to stimulate the senses. The more of the senses which can be activated for an all immersive experience the better.
Third page will be a sketch of an adjoining room to the Champagne bar under the working title of “The Intellectual Bar”. The artistic / intellectual bar will take its cue from an intellectual setting which will appeal not so much to the senses as to raw mental power. This is the kind of setting where intellectual minds will exchange ideas, develop new thoughts, conceive of new inventions not the least due to the accommodating features of nastoika, mors, or a hot pot of borsch soup accompanied by an ice cold shot of vodka.
Imagine that the bar opened in New York, Shanghai or London with the aim of appealing to a wide range of people from all across the world many of whom would only have a superficial knowledge of Russia and Russians. The venue should also be an advertising and branding channel for Russian “champagne” / Russki igristoe vino (Russian sparkling wine) and potentially other Russian wines.
Please send your entry to : info@mmsport.dk
Title line: Russian Champagne Bar
Deadline: March 15th 2019

Prizes

1.
The first prize will consist of a cash prize. The sum will be the equivalent of 1000 Euros.
2.
Second prize will be an online gift card to MM Sport worth the equivalent of 150 Euros.
3.
Third prize will be two bottles of Russian AOC wine or Russian premium Champagne.
 
We reserve the right to omit from awarding the prizes listed above in case none of the entries meet the basic criteria as laid out in the brief.
 
The winners will be announced before the 1st of May 2019. The winners will be contacted directly as well.
The winning entries as well as honorable mentions will be published for everyone to see at:
mmsport.dk and idfootballdesk.com
 

The jury will consist of:

A representative from the Russian Embassy or a Russian institution of higher education
A representative from a Russian winery, most likely Lefkadia
Mr. Mikkel Bager from MM Sport
 
Any questions ? please direct them to the latter at:
info@mmsport.dk
 
The prizes will be provided by the legal entity:
MM Sport
Brodregade 23 st. th.
8900 Randers C
Denmark
VAT number: DK33445148