Grilling at Ladoga
Alcohol Producers Diversify into Non-Alcoholic Products
In a strategic move to cater to evolving consumer preferences, alcohol producers like Ladoga Group and Novabev Group are venturing into the production of non-alcoholic products such as barbecue sauces and jams under their alcohol brands.
Ladoga Group, based in St. Petersburg, has recently started producing barbecue sauces under the "Krutoyar" brand. These sauces contain no more than 0.5% alcohol, making them a suitable option for those following healthier, low- or no-alcohol lifestyles.
The strategic diversification is aimed at capitalizing on the growing market for healthier options and expanding the companies' market reach beyond traditional alcoholic beverages. According to Andrei Moskovsky, president of the "Alcopro" guild, Ladoga's interest in launching third-party products is to support its core products.
The move offers several key benefits. Diversifying into non-alcoholic products and food items helps companies stand out in a competitive market and innovate to meet evolving tastes. It also provides access to fast-growing markets, reduces dependence on alcoholic drink sales, and meets social moderation trends.
However, there are challenges associated with this strategy. Extending an alcohol brand into food or non-alcoholic categories may confuse consumers if not clearly differentiated. Creating sophisticated, appealing non-alcoholic beverages or food products also requires innovation and expertise. The healthy foods and non-alcoholic beverage spaces are crowded and dynamic, demanding continuous innovation and marketing to capture and retain share.
Despite these challenges, Ladoga Group is optimistic about the potential of its new product line. The company plans to release 2,000 bottles of 250 ml volume of barbecue sauces monthly, and the production uses the same-named whiskey.
Meanwhile, other alcohol producers are also exploring similar opportunities. Alexander Gretsov, commercial director of Stellar Group, mentions that similar experiments by other alcohol producers in the past were not successful. However, the success of companies like Ladoga Group could pave the way for more alcohol producers to follow suit.
In conclusion, the strategic diversification of alcohol producers into non-alcoholic and related food products is a response to shifting consumer health consciousness, moderation trends, and the lucrative growth potential of non-alcoholic markets. While there are challenges, the benefits seem to outweigh them, making this a strategic adaptation for many alcohol producers.
The strategic diversification by alcohol producers like Ladoga Group and Novabev Group extends beyond alcoholic beverages, branching into finance by potentially generating revenue from the production and sale of non-alcoholic products, such as barbecue sauces and jams. Alcohol businesses might use their financial resources to innovate and continually adapt their product lines to meet evolving consumer preferences and market demands, thus enhancing their overall business portfolio.
