Comrades:
Russians Gulping More Beer
KLIN, Russia, Jul 02, 1999 (AP Online via COMTEX) -- The Klinsky Beer
Factory has all the attributes of a modern brewery: vast copper
kettles, shiny, stainless steel fermentation tanks, a bustling,
automated bottling line.
There's just one thing missing: a warehouse.
But Klinsky doesn't need a warehouse. It can't make beer fast enough to
fill one. Even though the brewery is expanding as fast as it possibly
can, a motley fleet of battered trucks is lined up outside its brick
walls every day to haul the beer off to market the minute it is
bottled.
What's happening in Klin, a sleepy, provincial town 55 miles north of
Moscow, is typical of what's happening throughout Russia. Russians,
especially younger people, are drinking more beer. Breweries,
scrambling to meet demand, are in a nearly unique position in Russia.
They constitute a growth industry, fueled by increased competition and
better beer.
''Last year, the rate of growth of our brewery was 160 percent,'' said
Olga Gulina, a spokeswoman for the Klinsky factory. Some other Russian
breweries did even better -- and this in a year that saw Russia
freefall into one of the deepest depressions ever seen in an industrial
economy.
There is talk, perhaps premature, of a generational shift from vodka to
beer. It's hard to conceive of anything that could wean Russians off
vodka. But just such a shift is occurring in Poland, another vodka
swilling country, and some economists predict it will happen here too.
''It's a natural progression,'' said Hans Christian Jacobsen, a
director of agribusiness for the European Bank for Reconstruction and
Development, which has invested nearly $100 million in Russian
breweries. In emerging markets, Jacobsen said, consumers often switch
from drinking hard liquor to beer.
All this bubbling fermentation has drawn international beer companies
to Russia, where a battle is shaping up for shares of the growing
market.
A Scandinavian consortium has a jump on the competition with Baltica,
the country's best selling beer, which is brewed in St. Petersburg and
is the closest thing Russia has to a national brand.
SUN Interbrew, a recently formed alliance of Indian and Belgian
interests, is challenging Baltica's dominance through a chain of
regional breweries -- soon to include Klinsky -- and is laying plans
for a national brand of its own.
Other players include Turkey's Efes brewery, which just opened its own
factory in Moscow, and South Africa Breweries, which recently bought a
brewery in the city of Kaluga.
The cutthroat competition, which also includes Russian-owned breweries
such as Moscow's giant Ochakovo, is bringing something new to Russian
consumers: decent beer.
In the Soviet era, beer was unpasteurized, uninspiring and often
unavailable. It was usually terrible -- and that was if you were lucky
enough to find it.
It is no surprise, then, that Russians drink far less beer than most
Europeans or Americans. Per capita beer consumption is 5 gallons per
year, compared to 22 gallons per year in the United States and 34
gallons per year in Germany.
That could change as breweries expand their capacity and continue to
improve their quality. At their best, the new Russian beers -- such as
those produced by Siberia's Pikra brewery -- are as good or better than
most imports and cost a fraction of the price.
At Klinsky, most of the old Czech equipment has been scrapped in favor
of German and Belgian machinery. Ingredients are imported, too -- malt
from Finland, hops from Germany.
''Only the bottles are made in Russia,'' Gulina said. ''All the rest is
foreign.''
The beer isn't great yet. Klinsky's six styles lack the depth and
sophistication of great European beers, or the clean consistency of
American brews. But they aren't bad, either. And they are popular.
Already, Klinsky has expanded its production from 106 million gallons a
year in the early 1990s to 290 million gallons a year today. Now, with
an infusion of money from SUN Interbrew, Klinsky hopes to nearly triple
its production over the next few years.
Klinsky has a small marketing department that has produced some
billboards and market displays, but the company hasn't done any
television advertising and doesn't plan any soon.
''The situation is such that we can't meet the demand,'' Gulina
explained. ''So to put our money into advertising makes no sense.''
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