Mexico's Casa Cuervo has signed a deal with Russian Standard to distribute and market its Jose Cuervo tequila portfolio in Russia where demand for the spirit is soaring.
According to International Wine & Spirit Research (IWSR), Russia was the third-largest tequila market in the world in 2012, with 510,500 nine-liter case sales, albeit still lagging far behind Mexico (8.044m cases) and the US (12.975m).
Nonetheless, Russia's tequila take-off has been exponential over the past 10 years. In 2003 the country only consumed 71,000 cases, placing it eighth behind the two nations above, then Germany, France, Canada, Japan and the UK.
The brand had circa $2bn sales as of May 2012, and Yiannis Stratos, Casa Cuervo’s regional director for Europe, Middle East and Africa said Russian Standard shared its strategic and commercial goals.
Russia's tequila take-off
“Russia represents a growth opportunity for Cuervo, as we are still under-represented in this part of the world. Russian Standard is a great Russian company that has a proven track record of building strong international brand in the Russian market,” he added.
Oleg Kirillin, CEO of Roust, Russian Standard’s distribution business in Russia, said of the deal: “Russia is an exciting market for tequila and we are pleased to partner with the oldest and most respected tequila manufacturer.”
Russian Standard spokesman, Oleg Yegorov, told BeverageDaily.com today that the companies, which are both private, did not want to reveal further details of the tie-up, including the length of the distribution deal. He reminded us that the opportunity was unconnected with Diageo's decision (announced in March) to stop distributing Jose Cuervo from July, since that deal only covered North America.
Asked if Russian Standard could look to distribute other international brands in Russia in future, to add value to the Russia spirits category, he replied that the company already distributes 20+ major international brands in Russia, including Remy Cointreau, Jägermeister, Whyte & Mackay.
"Founded in 1992, we are one of the oldest distributors of premium spirits brands in Russia," he added.
World's No.2 vodka producer
So could a tie-up with a prestige player such as Cuervo in Russia work to boost the profile and value of Russian Standard's own brands abroad?
"The agreement is for the distribution of Jose Cuervo in Russia only. The agreement does not involve the distribution of Russian Standard brands abroad," Yegorov said.
"Russian Standard works with dozens of leading distributors to distribute and market its brands outside Russia and Poland. Russian Standard brands are distributed to more than 80 countries," he added.
Russian Standard is the second-largest vodka producer by volume in the world and sells 34m+ nine-liter cases annually in 80+ markets; it is also Central and Eastern Europe’s largest integrated spirits producer.
Top brands include Russian Standard Vodka, Green Mark, Parliament and Zhuravli, as well as Polish vodka Zubrowka, and the firm owns facilities across Russia, Poland, Hungary and Italy.