Nemiroff: premiumisation ‘not temporary’

The CEO of Nemiroff explains why he believes Ukrainian vodka will be riding the premiumisation wave well into the future, and how “only premiumisation can help businesses to survive”.

Almost 10 years ago, Ukrainian vodka brand Nemiroff changed its strategy to premiumisation and its CEO Yuriy Sorochynskiy – who was appointed to the position in 2011 – still firmly believes it was the right move.

Nemiroff harbours hopes of becoming a ‘top five vodka brand’ (it was the 10th biggest-selling vodka brand in The Brand Champions 2024 report), and a part of its aim is to also reimagine vodka for a ‘modern generation of drinkers’.

Speaking to The Spirits Business about where the brand is currently at with achieving these aims, Sorochynskiy says Nemiroff is still on course – despite turbulences in the last years such as Covid-19, its lockdowns, the invasion of Russia in its home country Ukraine, and inflation.

While these events might have changed consumer behaviours, Sorochynskiy notes that while yes, people are buying less, from “my view and our observations they are focusing on more premium products”.

He continues: “In the past they brought one bottle per week, now they are buying one bottle a month, but it’s more premium, nicer. We are seeing that the consumer would like to receive some additional value for their money.”

Sorochynskiy adds that the success of its strategy shift has been proven by its recent activity. “We have increased the number of markets during the last few years because we have presented to them really premium modern products, not old school bottles and packaging, but high-quality premium products for an attractive price,” he explains.

Lex by Nemiroff is priced at RRP €80 (US$70) per one-litre bottle. It was Nemiroff’s most premium product yet, and made its debut at the TFWA World Exhibition & Conference 2023 in Cannes, France.

He adds: “We discussed internally as a board almost 10 years ago to switch to premiumisation – to change everything from the existing packaging, from the way of presenting the brand logo, everything to be more attractive and more premium. And I truly believe that it will help us in the future. We have this price for Lex because high competition is also pushing down the margin for all channels, from producer to retail, and only premiumisation can help businesses to survive.”

Nemiroff said it took more than 100 tastings to find the exact liquid for Lex, and nearly three years of development. Its production – involving 13 filtration stages, including silver, platinum, shungite, and amber filtrations – is part of the approach to “redefine” vodka, as consumers continue to expect more from their purchases and place greater value on aspects like craftsmanship.

Gen Z in particular was a “primary target audience” for Lex, Sorochynskiy says. “And from our side they would like to drink something expensive”.

Hard to compete with brown spirits

“Overall, the vodka market in the world is suffering from other spirits and it’s not easy to compete with brown spirits, with some gins and rums. But I’m more or less optimistic regarding the future trends with vodka consumption as its biggest spirit in the world. We have a huge value segment and this is always under pressure.

“Global gross domestic product (GDP) per capita is growing and people are looking to buy more premium, so we have to provide them with such an opportunity. We did a lot of research for relaunching our Lex by Nemiroff ultra-premium vodka. We have confidence that this product will find the consumers in the market.”

Looking to make a name for itself globally, the brand has been busy launching in various international markets in recent years, this year its destinations have included Canada, India and Australia.

Sorochynskiy insists that the brand’s focus on quality is a major reason for its ability to grow its presence, in spite of its base in Ukraine, which is still in the midst of war with Russia.

He explains: “It’s a long trip delivering from Ukraine to Australia and it was a long negotiation agreement. Of course, there are concerns – the Ukraine war, and then ‘are you a reliable supplier?’, ‘can you manage to deliver products?’. But we provided a lot of assurances and when the order was delivered, these attractive markets accepted the product and its taste.

“We were very confident that when we did the new packaging and created the highest quality liquid, it was like, well, if we did everything properly, why should we fail?”