“Permalko” JSC is one of the TOP 20 key players on Russian alcohol market. Over the past few years, the company has managed to significantly increase production output. Today, the manufactured products are in demand not only in Russia, but also are being successfully sold to the CIS countries, Europe, USA, Africa. Quality of “Permalko” beverages was appreciated both by consumers and professionals of the industry. And more recently, the medal collection of the enterprise was supplemented with one of the most prestigious Russian awards — the “Grand Prix” of the “Prodexpo – 2018” industry exhibition.
CEO of the company, Oleg Kotelnikov, describes how it became possible to achieve such results, as well as the situation on the market in general and what place it is occupied by “Permalko” for today
— Oleg Ivanovich, how could you briefly define the situation on the Russian alcohol market in 2017? What trends would you note? What indicators were achieved by “Permalko” and what strategy does the company execute to maintain its positions?
— For the past several years, the alcohol market has been legalized and due to this, the sales of legal producers are increasing. A year ago, the market showed an increase of about 20%. In 2017, the government continued to combat counterfeit products, but it had no such strong impact on sale; if there was an increase in production volumes of the largest producers, it was insignificant. This is a general trend.
“Permalko” has shown good growth over the past three years. During this time our production volumes increased almost threefold. This indicator comes well ahead of the market.
The second trend of the market is a decrease in profitability. Due to the decrease in the purchasing power of the population, the main market players throughout the whole chain from the producer to the seller reduce the price of the products. This leads to the decrease in the difference between the prices for the cheapest and most expensive products. Over the past time, the prices for vodka in the middle and upper price segment constantly decrease. Today, the difference between the cheapest vodka and the products of the mid-price segment is minimal – about 20-30 rubles. Previously, it amounted to 50-70 rubles. The mid-price segment reduces margin. This results in the manufacturer ability to maintain profitability by increasing volumes, as well as by reducing own costs, reducing production costs while maintaining product quality. This enabled us to move forward.
— Recently you have actively participated in exhibitions and presented your products at various competitions. What are the main results?
— At the “Prodexpo — 2018” exhibition, our “GRADUS PREMIUM” vodka was honored with the highest award which can be obtained in Russia, in our opinion, — the “Prodexpo Grand Prix”. This year, several hundred of presentable vodkas from around the world participated in the XX-th International Tasting Competition. They were assessed by the best experts from Russia and CIS countries. The tasting was conducted using a “blind” method, the experts could not be influenced either by the image of the beverage or by the producer’s reputation.
“GRADUS” vodka has already been awarded the “Grand Prix of “Prodexpo-2016”. In 2018 we won this high award again. And for us, this is another confirmation that we managed to get a worthy product as a result of focused effort.
It should be noted that “Permalko” treats the participation in competitions as an indicator of understanding the market situation and its place in it, and as a way to declare the quality of its products. Therefore, this year we actively participated in the most prestigious international competitions. In 2017, we represented our products in the USA, Germany, France, England and China. And we did not return from any competition without gold or silver medals. The most prestigious was the victory in London at one of the most authoritative professional tasting competitions “International Wine & Spirit Competition (IWSC). This year “Permalko” took part in this competition for the first time and the “GRADUS” vodka received high recognition, received a gold medal “Gold Outstanding”. In terms of importance, this award can be compared with the Oscar in the cinema. Specialists of our enterprise managed to create a universally recognized product that does not give under the best world standards.
In the last year alone “GRADUS” vodka was honored with more than 10 high awards. And this is the result of the work of the entire enterprise, manifestation of the quality sustainability, and of course, point of pride.
— How you managed to achieve such a high and consistent quality of product?
— First of all, in order to produce a product that can win the “Grand Prix”, it is necessary to use high quality spirit. All “Permalko” beverages are made on the basis of high quality spirit type «Alpha» and “Lux”; we obtain it from “Talvis” JSC alcohol plant. This guarantees consistency and high quality of the main raw materials and gives a clear advantage in the consistent quality of our product.
When processing alcohol, we use reliable coal filtration technologies — Vodka goes through three stages of purification. Today, the company is fitted with the most modern equipment. Filling of finished products is carried out using updated filling lines. We apply equipment from Germany and Italy. All the products of “Permalko” are manufactured using low temperature technology, which also ensures a consistently high quality.
— What is the brand portfolio of your company today and how has it changed recently?
— Today there are 20 brands in the range of “Permalko”, among them vodka brands, balms, tinctures. “GRADUS”, “Russian Reserve”, and “Kaznacheyskaya” brands take a special place in our portfolio. At the same time, we constantly monitor market changes adjusting and expanding the company range. So, for the last year, taking into account the trends I mentioned above, we have increased the portfolio at the expense of high-quality vodkas of the low price segment, producing a number of novelties. In the mid-price segment, we have changed the design of the local brand “Permskiy Krai”, and in the near future we plan to start working on the redesign of our key brands.
— When it comes to the legalization of the market, it should not be left unmentioned that in the framework of further steps in this direction, in Russia, the Unified State Automated Information System plans to switch to “brand” accounting starting from July 1. Your enterprise has become a platform, where the equipment for such accounting has been launched in a test mode for the first time in Russia. Why was this decision made, and what are the test results?
— The introduction of “brand” accounting is a very complex mechanism that allows tracking the history and route of each produced bottle – from the bottling date, lot, pallet in which it was located to the point of sale. A few months ago, the market had no ready-made technological solutions to ensure the implementation of “brand” accounting, so companies that manufacture equipment had to develop technology, as it were, “from scratch”. It so happened that our traditional partner — the “Meridian” company, which was the first in Russia who developed and implemented such a technical solution. They addressed a proposal to us and we, being interested in obtaining such equipment, became a test site. In the course of work, there was a recognition that the applied technical solutions work correctly. The tests are successful. But now, in order to move on, it is required to get the final consideration of the mechanism by the legislators.
— In general, what are the tasks that have to be solved by “Permalko” and what are your plans for the next period?
— We do not like to talk about our plans; we prefer to talk about what has already been done. However, I note that the increase in production output resulted in the situation that all three bottling lines of the enterprise worked twenty-four seven in the first quarter of the previous year. The enterprise capacities were loaded to the maximum. In this regard, it was decided to install another line, the launch of which will significantly increase the production capacity of the enterprise. And this means that we will increase sales with a focus on the production of high quality products, consistent with the latest trends and market requirements.