Stoli Group USA in January took over complete responsibility for the importation, marketing and distribution of Stolichnaya vodka. John Esposito, most recently the president/CEO of Bacardi USA, has signed on as president of this new company.
The opportunity, Esposito says, “has given us a chance to organize a company from the ground up, put passionate and committed people in place, and establish a team which has one goal in mind: not individual achievements, but building a winning premium brand.”
Esposito noted that Stolichnaya has had several brand stewards in the U.S. during the past decade. The brand was under the Pernod Ricard umbrella for a while, but when Pernod purchased Absolut in 2008, Pernod had to divest itself of Stoli.
The brand then went to William Grant & Sons, which immediate doubled the size of Grant’s U.S. business, Esposito says. But about 16 months ago, brand owner Yuri Shefler and his company SPI, decided to establish its own company in the U.S. to handle the brand, creating Stoli Group USA.
A LITTLE STOLI HISTORY
Stolichnaya was owned by the Soviet state in conjunction with union collectives for decades. But when the Soviet Union began breaking up in the early 1990s, Russian entrepreneurs started buying up state assets. That’s when Yuri Shefler bought a percentage of Stolichnaya. By 1997, he had acquired complete ownership of the brand.
Still, politics continued to play a role in the brand’s fate. Around 2001, Russian President Putin nationalized the brand, instigating court cases in the U.S. and around the world. SPI has been legally defending its rights to the brand successfully ever since, and SPI’s Stoli is now distributed in 167 countries worldwide (not including Russia).
“We own wheat fields in Russia (and other places) and a $100 million state-of-the art production plant,” Esposito says. But a recent law that Putin pushed through states that for a vodka to be termed “Russian,” it must be blended in Russia. And because Stolichnaya is blended in Latvia, its label had to be changed. It is now termed “Premium Vodka” on the label.
PROMOTING PREMIUM POSITIONING
Esposito emphasizes Stoli’s great heritage and distribution and the fact that is “is viewed by leading mixologists as a great vodka.” Still he noted that in recent years “the brand had been seeking volume; now, we will focus on its premium positioning.”
Part of the new approach is to focus on the appeal of the 80-proof core brand as well as the company’s superpremium expression, Elit by Stolichnaya, and “some new things coming down the line,” Esposito says. What’s more, the company will reduce the number of flavored expressions in its portfolio to establish a core group of flavors. The flavored lineup currently represents about 30% of the brand’s sales.
“Lori Tieszen, senior vice president of marketing, and her team have built a solid marketing plan,” Esposito said. All the support materials have been re-done, and the brand’s “Start With Stoli” campaign is scheduled to in late January. “There has been a tremendous collaborative effort between marketing and sales,” Esposito points out, “as well as aligning the program with our distributors.”
Stoli Group USA currently employs 80 people, and they are all “bringing an entrepreneurial energy to the project,” according to Esposito. The key, he says, “is to be proud of your brand and hold onto your price.”