Export Knowhow

Wine culture is flourishing in Russia: opportunities to export Swiss Wine

Ever since opening to the world in the early 1990s, the Russian wine market has undergone a very unique development path. So, what are the main tendencies of the Russian wine market today and is there a place for the Swiss wine?

vineyards

During the 1990s, restaurants and distributors portfolios were dominated by the most expensive wines from Europe following the simple principle that whatever is expensive must be good.  However, as time progressed, wine culture and interest in the actual product gradually developed. Today, the market has become much more differentiated and sophisticated. It is not by chance that in 2020, Russia jumped 23 places directly into top ten of the most attractive still wine markets in the world according to the Wine Intelligence.

Wine industry landscape

The yearly wine consumption in Russia is between 4 and 5 litres per person - moderate compared to other European countries. In 2020, 88,8 million hectolitres of still wine (3% more than in 2019) have been sold. Most popular wine regions are Italy, France and the New World. Besides, there are successful examples of launching new countries on the Russian market (Austria in 2012, Brazil most recently).

Wine culture has flourished during last years, highlighted by the opening of numerous wine boutiques, professional oenological academies and numerous gastro-oenological workshops.

In terms of sales breakdown, retail and wine boutiques sales cover almost the entire market, leaving only 10% to the hospitality industry (HoReCa).

Another tendency is the rebirth of local wine traditions, supported financially by the government and an emerging interest to local producers from the consumer. At the same time, high quality Russian wine is far from cheap and an average Russian consumer still prefers a European wine if prices are comparable.

The wine assortment on the market has grown extremely rich, but consumers are still very eager to discover new products. It seems today that in this environment, there is clearly also room Swiss wine.

Needs of the market

The main demand of the Russian premium wine market today (Swiss wine will be clearly in this segment due to its quality and pricing) are autochthone, organic and gastronomical wines. Bio wine and pét-nats are successful new product categories on the Russian market.

Alcohol industry representatives demonstrate an impressive knowledge of Swiss wine production methods, regions and grape varieties appreciating its unique taste. Petite Arvine, Fendant or Humange are not unknown names in the Russian professional community.

An end consumer looks for a Swiss wine in boutiques or restaurants, but as of today there are only one or two Swiss producers on the market, the offer is quite limited. 

How to approach the Russian wine market?

It is not a surprise that pricing would be a key question for the Swiss wine in Russia. Importing products from Switzerland will involve costs in terms of obligatory certification, labelling in Russian language, transport as well as margins of distributors or retailers. It is necessary to have a local partner (a distributor or a retailer who would represent the interests of the brand locally and will take in charge all administrative procedures).

Here is a short example of pricing in Russia, starting from an EXW price and ending by a shelve price for an end-consumer in a wine boutique or a restaurant.

  • Distribution pricing
    10 CHF Ex works (EXW) price + 60% customs duties and transport expenses + 100% distributors margin + 100% wine boutique margin = 36 CHF shelve price in a wine boutique
     
  • Direct cooperation with a retailer
    10 CHF EXW price + 60% customs duties and transport expenses + 150% retail margin = 31 CHF shelve price in a supermarket
     
  • Horeca
    10 CHF EXW price + 60% customs duties and transport expenses + 100% distributors margin + 100-200% restaurant margin = 36-46 CHF price in a wine card

A reasonable quality/price ratio is a key criteria to enter the market in order to be able to compete with producers from other countries. 

Next steps for your export success

Summarising everything that has been said, the professional Russian market today is ready to discover wine producers from Switzerland. As for the end-consumer, marketing and educating effort explaining specialties of Swiss wine should be undertaken. The easiest way to do it, is to act collectively with a group of producers. 

A common approach representing several Swiss wine regions will be the most effective for potential Russian partners leading them to get closer to Switzerland, evaluating different opportunities basing their decision on the complexity and variety of Swiss wine industry.

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