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. Last Updated: 07/27/2016

Young Marketeer Pioneers Road for RC Cola

Alexander Kovaler, the Triarc Beverage Group vice president responsible for the CIS, the Baltics and Scandinavia, single handedly introduced the company's popular Royal Crown Cola to the former Soviet Union.

At 35, he has come a long way from the ambitious 12-year-old who left his native Riga, Latvia, with his parents with hopes of pursuing a career in hockey. He recalls that when his family arrived in Vienna, which was then the first point for Jewish immigration from the Soviet Union, his father was asked, "Which country would you like to move to?" "To Canada," he answered, "because our son has played hockey since he was 5 years old."

Nine years later, Kovaler helped UCLA win the state championships by scoring five goals during their final game.

While ice hockey provided him with a small stipend, it was his knowledge of the Russian language that gave him the extra boost to kick off a successful career.

Why did you decide to work here?

Kovaler: I studied in two main areas at the university - international business and Eastern Europe. After five years of studies in Los Angeles, I worked for two years at the international finance department of the computer company Mai. It was 1989, and I read a lot about companies that were starting to do business in Russia. I made a list of the biggest, and the most interesting for me was AT&T. I called them and was surprised to find myself speaking with their president for Europe. I told him that I was a student from Boston University and that I was looking for a place to intern. He, of course, was surprised and asked what merited my being given a position. I had read that AT&T had several projects together with the moscow city telephone System. I answered that I was a student, not better than others, but I had one advantage: I speak Russian. He thought for two seconds and said, "Come to work on Monday."

As a result, AT&T paid for my MBA, which I received in one year. At that time, Russia opened up to the West. I had many opportunities - I had an MBA, American and European business education, and I knew Russian. AT&T offered me a job as deputy managing director for Eastern Europe. It was an unexpectedly high position for me - I was 27 at that time. All of my colleagues at this level were 45 years to 47 years old.

After one year of working at their headquarters in Brussels, I became the general director for AT&T in Russia. I opened the first AT&T office in Moscow and later in Kiev. I worked very closely with the communication ministers in all of the republics.

I first came to Moscow in 1991 and spent two years here. Then I was asked to return to the United States to attend orientation training for vice presidents. But I didn't want to go back to the States. Life was lively here. Business was very interesting, and I didn't want to leave it. I had been receiving many interesting proposals from RC Cola asking me to market the soft drink in Russia from ground zero. Triarc Beverage Group, which produces it, has been in business since 1905 and is now the third largest beverage company in the States. This offer gave me the opportunity to test myself as a businessman. At AT&T, I rose quickly and I was a little over confident of myself. I always felt while working for AT&T that it's a very big corporation and like big companies, it has advantages and disadvantages. Making many decisions took a lot of time, and bureaucracy sometimes affected the business. RC Cola gave me the opportunity to take everything into my own hands - define the product's policy and strategy. I hired a team of technology workers, marketers - everybody.

Were you given unlimited funds to achieve your goals?

Kovaler: No, quite the opposite. The budget was minimal. We started from Ukraine in 1994. During the first year I studied the market, met with plant directors. Our sales were $500,000 the first year - a paltry sum. That money was not enough for an office or for business trips. But the company believed in the market and supported my activities. Now we have four plants in Ukraine. We work with very large Russian clients. Our beverages are produced by Dovgan, Wimm Bill Dann, Mega-Cola. We have other offers, but we are careful in selecting partners. We don't just sell the concentrate, but we also offer full technical and marketing support.

In 1995, we started working with the Moscow company Status, our Russian franchisee, and for the past year we have marketed the RC Cola trademark together.

With Status, we started a big advertising campaign on television. We got a small niche right away and now we have 10 percent of the Moscow market.

What was most difficult about starting business in Moscow?

Kovaler: Entering the market with an unknown brand, especially with quality. At that time in 1993, price was the most important thing in business.

Few looked at the quality and the balance between quality and price. It was difficult to go to a plant and explain what RC Cola was, why it was more expensive than other drinks - which were also unknown - and why it was profitable to work with us.

I was a teacher and I explained how to work on the market, how to fight Coca Cola. Now it is easier, everybody sees our advertising.

The second difficulty was presenting ourselves. When I worked for AT&T, I visited the communications minister as the general director of AT&T's Moscow office and everybody knew who I was right away. Working for RC Cola, I had to manage to first present myself and then a company that nobody knew.

How has the financial crisis affected your business?

Kovaler: Sales have fallen by 50 percent. In the first days we stopped selling completely, but we started again during the next month. It is now difficult to compete with Coca Cola, which has left their prices at the same ruble level.

RC Cola itself did not lay off any staff; we did not cut salaries.

Our producer, Status, was affected badly. It was forced to halt production for 1 1/2 months. It downsized its staff by 30 percent to 40 percent and temporarily decreased wages.

Are you planning to change jobs in the future?

Koveler: Our goal in Russia is to have five plants and a distribution network in place in five years. In Moscow, our goal is to obtain 15 percent to 20 percent of the market. Then I will be satisfied and be able to consider other offers.