Baltika Breweries president talks to thinkRUSSIA

august 8, 2014

thinkRUSSIA interviewed Isaac Sheps, President of Baltika Breweries and an active participant of SPIEF 2014, regarding his impressions of the Forum and the future of the Russian brewery industry.

What are your impressions of SPIEF 2014? What were the key messages that came out of the event? What are some of the benefits of such a forum, and the fact that it takes place in Russia?

Our company participates in the Saint Petersburg International Economic Forum every year. We believe the Forum enables communication between international companies, Russian businesses, key investors and Russian government officials on different topics such as investment appeal and sustainable development of business in Russia.

Baltika Breweries also contributes to the improvement of the investment climate in Russia by example of steady and sustainable business development. In addition to contributing to the Russian state budget and creating jobs, we also care about social responsibility. For instance, the company tries to minimize its environmental impact, pays much attention to resource-saving projects and waste disposal, while also developing our own agriculture project. As a company we are happy to share our experience and best practices with the participants of an event as important as SPIEF-2014.

Baltika is one of Russia’s best known brands; what is your recipe for success?

Baltika breweries has been the leader of the Russian beer market since 1996. The company’s products are available at 98 percent of outlets in Russia, as well as in over 75 countries around the world, including Western Europe, North America, and Asia-Pacific Region. Baltika products account for approximately 70 percent of the Russian beer export.

Our breweries strive to be leaders in all areas: as consumers’ first choice, as the best and trusted partner, the most attractive employer, and the most profitable for its shareholders. Following these strategic goals, Baltika develops strategies and projects for each department, creating individual employee development plans for the upcoming years.

Baltika is part of an international group of companies that takes a ‘glocal’ approach to work. Glocal for us means finding the right balance between working at a global level while developing local brands and initiatives. This is what distinguishes us from competitors and is the key to our sustainable success.

What future do you envisage for the European beer market?

Baltika is part of the Carlsberg Group. Carlsberg already has a strong market position in several European markets, based on a combination of local power brands and its international brand portfolio. With its focus on improving premium brands and developing new products, the Carlsberg Group sees the European beer market as a lucrative destination.

What is the difference between Russian and European consumer habits?

First, the culture of drinking beer in bars and cafes is still developing in Russia. While in Western Europe this market segment amounts to 40 percent, Eastern Europe and Russia show potential for growth in the future. Second, the culture of selling goods in multi-packaging is developing in Russia as well, with customers enjoying lower prices for bigger quantities.

Also, Europeans and Russians prefer different beers. For example, while beer from the Radler category (a beer-based mixed drink with soda or lemonade) was widely appreciated in Europe, it showed weak sales results in Russia, where people prefer stronger beverages, such as dark beer, which has its niche on the Russian market.

What is your strategy for positioning Baltika products on the world market?

Our secret is simple: the quality of our products meets high international standards. With the increased competition in the beer market, beer quality has become the most important factor for any company’s future development. We at Baltika are very well aware that in order to become successful we have to meet both high consumers’ expectations, and reach a high level of organizational quality, which means meeting the needs and expectations of all shareholders.

As a member of the International Standardization Organization (ISO), Baltika sponsored the annual ISO General Assembly last September in St Petersburg. Being a President of Baltika Breweries, I was honored to host one of the on-site seminars, during which we shared our best practices with over 140 delegates from all over the world. I showed them the brewing technology and demonstrated how the quality control standards are implemented at all production stages.

What developments are taking place in Baltika this summer?

This summer we are offering our customers new products and new packaging formats. In the super premium segment we plan to release a new variety of the Tuborg brand – Tuborg Gold. Also, to commemorate the 350th anniversary of the Kronenbourg brewery establishment, a limited edition of Kronenbourg 1664 beer with a thematic design will be released. For our Žatecky Gus brand, we developed a series of illustrated stories about the adventures of the Žatec heroes, hops and goose, emphasizing the Czech roots of beer.

We also adjust different brands to various Russian regions. For example, in the Far East, we market a new variety of the “DV brand-Amba" light beer, brewed using the original recipe of Far East Brewers. A new variety of “Sibirsiy Bochonok-Golden" will delight Siberian locals. Residents of the Tula region will have an opportunity to try a familiar and favorite taste ─ a new variety from the brand "Arsenalnoye-TAOPiN" restored in accordance with original recipes.

What prospects in the Russian brewery industry do you see?

Isaac Sheps is president of Baltika Breweries and senior vice president, Eastern Europe, of Carlsberg Group. Formerly CEO of Carlsberg UK, Isaac Sheps took the leadership of Baltika Breweries in Russia in 2011. He started his career in the brewing industry in 1998 as President and CEO of United Romanian Breweries (Tuborg Romania). Having joined Carlsberg in 2008, he achieved a great track record at various Carlsberg branches across Europe. Isaac Sheps was educated in industrial engineering and management, and holds an MBA degree and PhD in economics. - August 07, 2014

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