When anybody raises the subject of brand ecosystems, the companies most likely to come to mind are probably Google or Apple. But the wine industry also has a good example of a company that has built a system of successful brands that support each other’s growth. Professionals who are even slightly familiar with the Russian wine market know of Simple as one of its three largest importers. But Simple’s key feature is not so much the size of its turnover as its unique ecosystem. The best Russian sommelier school; a wine magazine with no competitor; Russia’s only wine conference; a chain of wine bars – all of these are parts of its single brand network.
How Simple began
Maxim Kashirin was looking for a project to invest in when he met another young businessman called Anatoly Korneev, who at that time was responsible for importing Ruffino into Russia. The two men realised there was a market niche for Italian wine in their country, and in 1994 their first pallet crossed the border into Russia. Quite soon, however, they found themselves facing a dilemma: to remain a tightly-focused market player or to become a more broad-based company offering options for every market segment.
Simple was launched in a country that was being built on the ruins of the Soviet Union, where the only wine available for purchase had been produced by the cooperatives of Georgia, Armenia and Krasnodar in southern Russia. After the fall of the Iron Curtain, citizens of the former USSR saw ‘French’ as a synonym for quality wine. Kashirin remembers early conversations with sommeliers: “French wine? Sounds nice,” they’d say. “Italian wine? No, thanks.”
At the time, wines were judged exclusively on the basis of their country of origin and it was possible to find French mass-market brands like Barton & Guestier on the wine lists of Moscow’s best restaurants. Fine, terroir-driven Italian wines, however, struggled to gain acceptance. Against this background, Kashirin and Korneev understood that they needed to be proactive. Their decision to establish the Enotria sommelier school in 1999 helped to accelerate the evolution of the Russian market as a whole. Sommelier education programmes were being offered by restaurants like Nostalgie, but Enotria was totally different in terms of the expertise of the educators and the courses’ intensity. Raising sommelier education to the next level helped Simple to create a market for its wines. Today, the school operates in both Moscow and Saint Petersburg and offers a range of courses, including the WSET Levels 2 and 3. In its nearly 20 years of operation, it has produced more than 7,000 graduates, including five of the ten most recent Best Sommeliers of Russia.
Simple’s influence on the sommelier community extends far beyond Enotria’s two branches. The company is a general partner of the Russian Sommelier Competition and sponsors educational activities ranging from weekly blind tasting training sessions, run by the Moscow Sommelier Association, to facilitating the participation of Russian champions in Association de la Sommellerie Internationale (ASI) competitions. Since 2014, Simple has organised, sponsored and hosted all ASI sommelier certification in Russia.
A wine magazine
While educating professionals so they could better communicate with consumers was one way to build influence, the Simple team realised it was also important to communicate directly with wine drinkers. Initially, Kashirin and Korneev opened negotiations with Decanter magazine about launching a Russian edition. These discussions faltered, however, because the British publishers feared that Simple’s role as a distributor might influence editorial policy, and the Russians that the magazine’s London-edited content would not meet readers’ needs in their country. If it was hard to sell Russians European wines from outside France, articles about the differences between the subzones of Central Otago would be much too complicated for Russian readers.
In 2005, the company launched its own magazine: Simple Wine News (SWN). It became the first Russian publication dedicated to wine, with content not limited to Simple’s brands but also including fine wine news, gastronomy and detailed reports on wine regions. The magazine is free of charge and is distributed wherever there is a target audience, whether that’s hotels, restaurants, car dealerships or golf clubs.
“We didn’t launch it to make money or to print the CEO’s face on the cover,” explains Kashirin. “It was an integral part of our business philosophy. In the fine wine segment you have to create an emotional contact with your customer. The breadth and depth of our range meant that we needed a powerful communication tool, and that is what SWN has become.”
Today, the magazine is published eight times a year, with a circulation of about 30,000 copies.
For Ivan Glushkov, restaurant critic at GQ and founder of saltmagazine.ru, SWN is Russia’s main wine and spirit publication. “It aims to strike a balance between the seriousness of the professional booklets and frivolity of lifestyle magazines,” he says. Notably, SWN was the only printed wine magazine to survive the 2013 amendments to Russia’s advertising legislation that strictly banned press advertising of alcoholic beverages, and heavily restricted the way journalists could write about wine. While other magazines went out of business and wine writers were forced to change careers, SWN metamorphosed into a non-fiction book about wine and winemaking.
Simple is far from a simple organisation, being omnichannel. It is behind Russia’s only chain of wine shops that sell premium wines, rather than mass-market ones – a miracle in a country where the average cost of a bottle sold on the store shelf is Rb300 ($4.64, a third of which will be the ex-cellar price). In 2018, Simple was the number one wine importer by value, holding 8.4% of the market’s value.
Its assortment contains about 4,000 SKUs from 385 wineries, including such well-known names as Penfolds, Pingus, Frescobaldi, Joseph Drouhin and Louis Roederer, among many others. As well as wine stores in major cities, the company has warehouses in Moscow, Saint Petersburg, Rostov-on-Don, Sochi and Krasnodar, along with wine bars in Moscow and Saint Petersburg.
While online wine buying is not allowed in Russia, customers can navigate Simple’s intuitive website, find, select and order a bottle of rare wine from the importer’s stock and pick it up at the closest store. This system is complemented by attractively designed, welcoming shops whose staff are able to explain the difference between communes of the Côte d’Or.
Simple’s strength and its brand power is illustrated best by its performance against international giants with big marketing budgets. In 2018, Simple’s Louis Roederer and Lanson brands took fourth and fifth place behind three LVMH brands. In December of that year, despite the wide retail distribution of Dom Perignon, including in Krasnoe & Beloe, Russia’s biggest alcohol retailer, Simple sold so much Cristal that it could only supply it on allocation. In the Cognac category, Simple’s Frapin came just behind LVMH’s Rémy Cointreau and Denview.
And wine production
As of 2016, Simple also moved into production in its own right. Its first product was luxury vodka called Onegin, after the main character of the Pushkin novel. This was followed in 2019 by the first Saperavi from the company’s Georgian winery Shilda; James Suckling gave its Tuscan Bertinga wines between 92 and 97 points.
Initially, Kashirin and Korneev had planned to build a winery in Russia rather than Georgia, and went looking around the Krasnodar Krai region, one of Russia’s centres of wine production. But they were unable to find land where they could grow grapes without the risk of frost; further, there had been a rise in Krasnodar real estate prices in the wake of the Olympic Games in Sochi. All of this made Georgia a more attractive prospect.
Despite the often tense political relations between the two countries’ governments, Russian consumers have a strong emotional link with Georgia. This could explain why in the five years after the relaxation of the ban on its imports, Georgia became the third-biggest wine exporter to Russia after Italy and France. But Simple’s import managers were not able to find Georgian wine that would meet their quality standards, so Kashirin and Korneev decided to produce it themselves.
While its image is that of the cradle of wine, Georgia’s exports to Russia rely heavily on inexpensive semi-sweet, semi-red wines made by large producers. Simple decided to produce wines made from Georgian grape varieties, grown in Georgian terroir, but using modern technologies at its 120ha Shildis Mtebi winery in Kakheti. A small number of grape varieties was chosen from 450 available in the local nursery, and experimentally planted on 5ha trial plots, and micro-vinifications were produced. Another 15-20ha are planted each year. The main risk for the young project is the political tension between the two countries, but Kashirin remains optimistic. “If Russia bans Georgian wine imports, the prospects aren’t very glorious,” he says. “The only encouraging fact is that we plan to increase market presence of the Shilda wines in 2021 and 2022, and we hope that by that time the relations between Russia and Georgia will have normalised”.
If Shilda was designed for Russian customers, the Chianti Classico Bertinga estate, founded in Georgia in 2014, targets the international market. Formerly part of the highly regarded estate of Castello di Ama, it is planted with Sangiovese and Merlot. The first harvest was in 2015, but the winemaking team decided to keep that year’s wine for longer ageing, so the first commercial vintage was the 2016. According to Kashirin, “we make IGTs, not Chianti DOCG, in order to make high-quality wine without compromising on price. Not being Italian has its benefits as we are not committed to sticking to a traditional style.” Apart from the agronomists, all the winery consultants are French, under the leadership of Stéphane Derenoncourt. James Suckling gave the 2016 basic blend of Sangiovese and Merlot 92 while awarding the single vineyard Merlot Volta di Bertinga 97.
In 2017, the company launched its Simple Congress, the most influential wine conference in Russia for industry professionals. Speakers have included experts such as Neal Martin, Ian D’Agata, Sören Polonius, Robert Joseph and Heini Zachariassen. Where dozens of Russians had been able to attend these kinds of presentations at European conferences such as MUST and wine2wine, Simple made it possible for hundreds to do so in Moscow.
It was Adam Smith who said, “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest”. Twenty-five years ago, Kashirin and Korneev weren’t working for charity, but building their business. The choices they made have shaped Russia’s fine wine market, bringing to a new generation of eager consumers not just the best wines of the world, but a new way of thinking about wine.
This article first appeared in Issue 5, 2019 of Meininger's Wine Business International magazine, available in print or online by subscription.
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