VIEW FROM VEDOMOSTI:Soviet-Era Nostalgia Brands: Still Popular, But Doomed




It may sound like a paradox, but as a student, I hated beer. I could drink cheap port, vodka, Azeri brandy, anything, but not beer. That was because beer meant Zhigulyovskoye, just as for a while in the United States cola meant Coke.


Zhigulyovskoye was a flat, pale yellow concoction that, in its draft variety, tasted like detergent. In fact, the folks who ran beer kiosks in the 1980s (and, old timers tell me, earlier as well) used to add detergent to Zhigulyovskoye to produce a visible head. Otherwise the Soviet Union's most popular brew did not foam.


I was no snob, but Zhigulyovskoye was just too awful. And it was practically the only thing on the market, not counting a few local brands that were relatively rare. Every brewery in the nation was making Zhigulyovskoye because the recipe was public domain. Zhigulyovskoye from different breweries tasted differently, though, because no one really took the trouble to stick to the recipe.


Now, in the days of passable commercial beers and excellent Russian microbrews, Zhigulyovskoye is a brand over which companies are fighting legal battles.


The relatively little-known Zhigulyovsky brewery in Samara has already gotten arbitration courts to ban two breweries in Moscow and Ufa from making Zhigulyovskoye beer. Now two of the nation's largest beer producers, Moscow's Ochakovo and Kazan's Krasny Vostok, face similar lawsuits.


The Samara brewery registered the brand in 1992 based on the fact that it has the same name. It was not even important for the registration that in fact Zhigulyovskoye was first brewed by the same company in 1934. The similarity in names was enough. This year, a sharp new lawyer, who earlier worked for oil companies Yukos and LukOIL, joined the brewery and unearthed the forgotten trademark registration documents. The suits followed quickly.


The Zhigulyovsky brewery was founded by Austrians before the 1917 revolution, then nationalized in 1918, then the former owner's son was allowed to lease it from the state in 1923 to get the plant back on its feet. The factory's main brand was then called Vienna, but in 1934, at a major Soviet exhibition, Anastas Mikoyan, who was then in charge of the food industry, liked it and renamed it Zhigulyovskoye in the patriotic spirit of the day. The recipe, in true communist fashion, was distributed throughout the nation.


Zhigulyovskoye remains popular with the older and less well-to-do beer drinkers, not least because they know it better than the numerous local brands that have sprung up since Soviet times. In fact, Zhigulyovskoye is the second most popular brand in Russia, according to the market research agency COMCON. It lags only slightly behind the leader, St. Petersburg's Baltika, brewed by a Scandinavian consortium.


Zhigulyovskoye is not the only brand in Russia that has retained its popularity since Soviet times and is still worth fighting for as far as modern companies are concerned. The Tabakprom association, which comprises 60 out of Russia's 80 tobacco factories, charges $500,000 for membership because it allows a company to produce filterless Prima cigarettes. For older smokers, it is the preferred brand - they cannot afford imports, or even most of the local smokes that are produced by Western companies.


So now the German tobacco giant, Reemtsma, which originally objected to the exorbitant membership fee, is seriously looking at joining Tabakprom. Despite Reemtsma's Napoleonic plans on the Russian market, it still needs to produce Prima at its Volgograd factory to get a bigger market share.


How does one build brand equity? One way is to instill loyalty in consumers by consistently good quality, great service and spirited marketing. Another way, apparently, is to nationalize industry, make it turn out enormous amounts cheap, poor quality products that are not quite generic only because they have a standard name stamped on them by dozens of different factories - and then privatize the factories again. Consumers will be used to the product simply because nothing else was available for a while. The factories that have better lawyers will eventually win rights to the trademark and possibly turn it into a true Western-style brand.


With Zhigulyovskoye, however, the tactic may not work in the end. In the eyes of younger consumers, the brand is discredited by the years of Soviet abuse. Local breweries with any ambitions at all will soon stop making Zhigulyovskoye themselves. In fact, one of the companies banned from producing it by the courts, Moscow's Moskvoretsky brewery, decided to drop the brand rather than appeal the ruling because Zhigulyovskoye's share in its output had been already dropped to 7 percent.