Russia: “Baltika” to produce “Yarpivo” in Khabarovsk

The consolidation of Russian assets of Baltic Beverages Holding (BBH) enters a new stage, Russian Beer Union announced December 17. The company is already bottling at all its enterprises the brands "Baltika" and “Arsenalinoe” and prepares a similar project for "Nevskoe" and “Yarpivo”. Due to the cross-country brewing (cross production) the company can save on logistics and increase the sales of these brands in the regions, the experts consider.

“In the spring of 2007, at the beginning of a beer season, we plan to start the production of “Yarpivo” at “Baltika-Khabarovsk" factory, - branch director of “Brewing company “Baltika” – “Baltika-Khabarovsk", Alexey Ilyin, has told yesterday. According to the company’s top-manager, it became possible, as the company "Yarpivo" - the owner of the same brand – finishes the association with "Baltika" together with two more companies - "Vena" and “Pikra”.

Legally the consolidation of all “BBH” Russian assets on the basis of "Baltika" should be accomplished by the end of the year. But already this summer the company has started to bottle "Baltika" and “Arsenalinoe” at five Russian factories, before owed by "Vena", “Pikra” and “Yarpivo”, Alexander Dedegkaev, operational activity vice-president of "Baltika" has told. The brand launched in August, “Bolishaya Krujka”, is made on three platforms - in Tula, Chelyabinsk and Krasnoyarsk, and the license brand Carlsberg - at the Rostov and Tula company’s factories.

Currently, the brand “Yarpivo” is one of the leaders of the mainstream segment. It is presented by three main varieties: “Yantarnoe”, “Temnoe” and “Orighinalinoe” in canes and bottles of 0.5 litres as well as in plastic bottles of 1 litre and 1.5 litres.
“Yarpivo” is already bottled in Voronezh and at mother company in Yaroslavl. The exact date of bottling start in Khabarovsk will be known depending on the beer demand in the far-eastern regions at the beginning of 2007.

Also, the company plans to start the same program for other Russian companies from BBH. The brand “Tuborg”, which has been previously produced only at “Vena” factory, is currently produced in Rostov and Tula. In a few days, “Nevskoe” (bottled at “Vena”) will be produced in Chelyabinsk and Samara.

The quantity will also depend on the demand in the region, but in 2007, the cross brewing will account for 30% of the company’s production. Mr. Dedegkaev expects to reduce his brand’s logistical chain from 1700 km to 1400 km.

A distribution company’s top-manager considers that the cross-brewing of “Nevskoe” and “Yarpivo” will increase these brands’s sales by 10-15%. According to “Business-Analitika” “Nevskoe” and “Yarpivo” account for 2.6 % to 3.5% of the market. He also mentioned that the logistical chain’s reduction will permit to save up to 500 mil rub. Alexandr Gutekulov, general director of logistic company “Relogix”, is forecasting 800 mil rub a year in savings.

Cross-brewing has been already appreciated by “Baltika”‘s competitors. SUN Interbrew bottles federal brands “Klinskoe” and “Sibirskaya Korona” at all Russian factories except “Kurskii” and “Novocheboksarskii”, and the brand “Tolstyak” – at all the Russian factories except “Novocheboksarskii”.
Heineken bottles its brand “Ohota” at 3 factories, PIT at 4.

“Cross-brewing allows the companies to save money on logistics and react more elastically to the demand in a certain region”, Alexey Shaventzov, SUN Interbrew representative said. Also, the cross-brewing makes the brand sales bigger, added Anna Meleshina, Heineken’s PR.

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