In 1991 the Soviet Union fell apart, and the inefficient consumer goods distribution system had ceased to exist. The Russian consumer market for the last 15 years has revealed a fast and sometimes volatile growth in the new economic climate. Currently the country’s packaging industry is experiencing an annual growth rate of approximately 10 - 12% with increasing usage of all types of materials for packages and its own brands and schools of package design. The packaging market growth is driven mostly by Russian food, beverage, cosmetics, and tobacco producers (see chart).
According to Unipack.Ru (the leading Russian packaging portal), only five years ago the Russian food market did not exceed $100 billion with an average consumer spent about $50-$60 per month for food stuff (for comparison at the same time typical German was spending around $200, Italian - $280 and American - $450). These days a Russian shopper spends about $100-$140 monthly for groceries which brings the country’s food to the leading position in Europe reaching $250 billion level in 2005.
According to the Russian magazine Ogoniok, the rapid growth of the market for perfume and cosmetics in the country (12% annual average in the last 5 years and already one of the five largest in Europe) may soon slow down due to recent introduction of a government decree tightening control of sales and distribution of all consumer products containing alcohol. Improved packaging plays significant part in this industry estimated at $6 billion in 2005 and driven by the fastest growing luxury cosmetics segment.
Despite anti-smoking warnings on Russian-made cigarette packs Russia remains very much a country of smokers. Tobacco multinationals have moved manufacturing East as a result of diminishing sales numbers in the Western Europe and USA. Currently almost all tobacco industry of Russia and the countries of the former Soviet Union is privatized and belongs to a group of the world’s major tobacco companies. Nowadays, high quality packaging equipment and materials make Marlboro from Kazakhstan look indistinguishable from American made brand. The local brands are still being manufactured along with newly developed ones, redesigned for modern competitive look.
Old Traditions
The early 1900’s were a renaissance period for Russian packaging. Driven by famous artists designing packages and labels for food and cosmetics, this trend continued until the 1920’s. This time was a period of complexity and excitement in Soviet life: the promise of a new order just a few years after the Bolshevik Revolution attracted many talented graphic artists who created package designs based on Russian history and ethnicity. Later, the Communist Party regime fueled the growth of the manufacturing industries, pushing to turn the Soviet Union from an agricultural country to an industrial powerhouse. With packaging being low on the Soviet government’s priority list, this graphic style faded away and reappeared only after the fall of the Soviet Union.
The growth of the Russian packaging industry gained momentum after 1998, when the unexpected devaluation of local currency cut imports of major food, cosmetics and other consumer products. Local suppliers started to fill the demand gap by offering familiar brands in new and modern packages that could compete with imports. With a highly skilled workforce and modern packaging, printing and converting technologies and materials provided by mostly Western suppliers, the country has reached a level of packaging artwork that took decades for some other countries to attain. Russia alone imported over 500 modern printing presses in the last three years. It remains an important and attractive market for major Western packaging companies; however, not without risk, though, while the country is acquiring expertise in balancing capitalism and government bureaucracy.
Currently, Russia’s growing packaging industry is using the best available technological and graphic means to promote consumer brands through images associated with traditional and historic cultural icons. This trend may well be illustrated in two lines of products with the highest growth rates of consumption: vodka and fragrance.
New Packaging for Old Drink
In present day Russia, where capitalism is taking root, there are over 400 major distilleries and wine producers supplying a growing market with familiar brands. A growing number of manufacturers stand out with new quality liquor brands that are gaining recognition in the mature markets of Western Europe, the US and Canada. While the majority of liquors are sold in conventional glass bottles using gravure printed paper labels, a substantial segment of Russian vodkas is currently packaged in the world class artistic glass containers of numerous distinguished designs. Unique bottle shapes are dedicated to specific vodka brands and all modern label technologies are utilized. The low labor costs helps to bring down the price of such packaged product to a highly competitive level.
Historically, Russian vodka was created in the 15th century, about a hundred years after the alcohol distillation process was discovered in France and before gin and whisky. In 1884, after centuries of process refinement and government manipulation, a special “Technical Committee” was created. This committee, some of whose members were famous Russian scientists including D.Mendeleev, established strict criteria for the drink. After that, vodka became truly a Russian product and retains its iconic image worldwide to the present day. Currently Russia produces about 600 brands of vodka using modern packaging technologies and the best package suppliers across the globe.
The leader of the industry, Kristall, is the largest distillery in the country. Located in Moscow, the 105 year old company produces over 4 million gallons of high quality liquor annually and exports about 35% to 20 countries. In 1953 the company had created the brand Stolichnaya (“Stoly”) which became a Russian household name worldwide. For the last ten years Kristall has been heavily investing in state-of-the-art process and packaging equipment from Italy, Germany and France.
Vodka Yuri Dolgoruki
Wine-Brandy factory KiN was founded 65 years ago in Moscow. The company concentrates its main activity in three areas – vodka, brandy and berry liquors. KiN supplies quality liquors to countries spread over Europe, America and Asia as well as domestic market. The company presently claims a 22% share of the Russian liquor market and is making deeper inroads into the highly competitive Western European market with the introduction of the vodka brand “Matryoshka” (named after Russian famous stacking doll). In 2005 this brand was awarded the special prize in Cannes (France) for folklore tradition in bottle creation.
The most controversial package design belongs to Vodka Kalashnikov. This premium vodka presented in a glass container shaped after a renowned Russian AK-47 machine gun. Packaged in an ammo type wooden box this vodka has been produced for the last 10 years by LVZ Glazovski, the small town distillery located in Udmurtia, the region that is known as a place where real guns are made.
Vodka Matryoshka
Vodka Kalashnikov
French Perfume a la Russe
Russian fragrances were created and later influenced by French settlers invited to Russia by the empress Catherine the Great who was smitten by French culture. She encouraged a number of skilled craftsmen to move in start a new life in the late 18th century. One of them, Henry Brokard founded the first domestic perfume factory in 1864 in Moscow. He was the creator of the famous scent Empress’ Favorite Bouquet developed in 1913 to celebrate 300 years of Romanov’s Czar Dynasty. The perfume is still very popular in Russia under the name of Krasnaya Moskva (Red Moscow). The former Brokard factory was renamed to Novaya Zarya after the Communist revolution and takes about 8% of Russian fragrance market. After the Soviet Union collapse Novaya Zarya had renewed the business partnership with French fragrance industry under the name of Nouvelle Etoile.
Obviously there are new fragrance brands being developed on demand from the growing Russian designer clothes market. There are more than 150 designer houses regularly presenting their seasonal collections. Russian High Fashion and Prêt-a-porter Association established in 1994 is the entity that represents the interests of national design school and promotes local fashion. Every season the collections of almost 60 top designers are presented on catwalks and in show-rooms. Their names include: Valentin Yudashkin, Slava Zaytsev, Igor Chapurin, Andrei Sharov, Alena Akhmadullina , Victoria Andreyanova, Tatyana Parfenova, Alexander Arngoldt, Nina Donis, Denis Simachev and, Masha Tsigal.
However only two of them - Slava Zaytsev and Masha Tsigal have put their inspiration in package design. In the late 1990s Slava Zaytsev created fragrances Maroussia and Authentic Maroussia with the features based on Russian themes. These distinctively packaged perfumes are made in France by S.B.I.
Through these few examples, we see an emergence of a new packaging movement in Russia. Hopefully, we will soon see this type of innovation in a broader spectrum of Russian-made products.
Honey from Krasnodar
Honey was one of the key export items along with grain, timber, wax and hemp that Russia supplied to the West for centuries before changing to Communist rule. There is still a strong association for this product with a wooden barrel as a customary shipping means. The Krasnodar region based co-op specializing in organic natural products has chosen a miniature hand-made wooden barrel (with the traditional Khokhloma graphics) for its brand of locally produced honey. A wooden barrel is fitted with special plastic lining preventing direct contact between foodstuff and container.