[Intl-tobacco] Russians Develop Preference For 'Homegrown' Products (fwd)

[Robert Weissman]

Russians Develop Preference For 'Homegrown' Products
by GUY CHAZAN / Special to THE WALL STREET JOURNAL
Source: The Wall Street Journal Interactive Edition, Sunday, 1/14/01

MOSCOW -- Picture, if you will, an American astronaut newly landed on Mars
staggering back in shock as a pack of Russian cigarettes explodes in his
face.  The words "Retaliatory Strike" appear above.

Those Russkies beat him to it.

Other ads for Yava Zolotaya, Russia's No. 1 brand of cigarettes, feature a
Russian bear on the Empire State Building, a la King Kong, and the Statue
of Liberty wearing a Russian hat. The message: First we take Manhattan,
then the world.

"We thought it was a witty way of showing that, yes, Russia can produce a
cigarette you can trust," says John Dilworth of Grey Moscow, which
designed the series.

This is the new Russian advertising: Patriotism with a twist. The twist is
that Yava Zolotaya is made by British American Tobacco PLC.

Moscow is now awash with jingoistic images celebrating the unique virtues
of Mother Russia. But some of those images might be considered less than
forthright, since they promote products that aren't even made here.

Patriotic Wrappings

Take, for example, a brand of butter called Doyarushka, or "Milk maid."
The packaging features a village girl in traditional headscarf, and
old-style Cyrillic lettering that spells "the beloved taste of real
Russian butter." One slight hitch: The product is actually made in New
Zealand.

Then there's Zlato vegetable oil, featured in a television ad that shows a
family of Russian peasants watching with wonder as the product transforms
their simple dishes into culinary events. However, most of the oil sold
under the Zlato brand is actually from Argentina.

Those three examples highlight a radical shift in the Russian market for
fast-moving consumer goods. Where once it seemed, in terms of product
origins, "West is Best," in the last few years, consumer preferences seem
to be moving away from flashy foreign imports back to homegrown products.
The trend has gathered enough momentum to force western companies to
rethink their advertising strategies -- and go native.

When communism collapsed, Russia was flooded with foreign goods that had
once only been available to the privileged few. Suddenly, imported food,
drink and cigarettes were all the rage. "They were seen as attractive,
reliable and cool," says Lena Koneva, head of market research company
ComCon. "It became taboo to smoke a Russian cigarette."

Soviet Nostalgia

But the shocking devaluation of the ruble in 1998 sent the price of
imports sky-high, forcing shoppers back to Russian brands. It was a change
many were happy to make: The romance with western goods had already begun
to fade.

Now the country seems to have settled at the opposite extreme. Russian is
in, foreign well-and-truly out. "Russians are really prejudiced. They
think the food produced here is better because the technology's more
primitive, and so it's got fewer artificial additives," says Ms. Koneva.

The shift is exemplified in the story of Wimm-Bill-Dann, Russia's biggest
private milk and juice producer. The company launched in the early 1990s,
pretending to be foreign, with a brand of fruit juices called J7 that
caught the eye with its snazzy packaging and (for Russians) near
unpronouncable name.  But in later years, responding to the new patriotic
mood, it gradually "came out" as Russian, introducing a range of dairy
products such as Domik v derevne ("Little House in the Country") and
Milaya Mila, which are much more identifiably Slavic.

"We started off with J7 because at that time consumers had much more
confidence in western brands. They were fashionable and sold well," says
Wimm-Bill-Dann's chairman, David Yakobashvili. "But then our analytical
department noted a change in our consumers' preferences, and we moved to
names that [comsumers] find more accessible."

The swing to indigenous produce has had a surprising adjunct: a budding
nostalgia for Soviet food and drink. Foreign visitors to Soviet shops were
often amazed by the total absence of recognizable brands and normal
packaging -- shop assistants hacked off lumps of nameless butter and
folded them up in scraps of gray paper. But despite the anonymity, Soviet
shoppers were more savvy than they seemed, and the products they once
favored are now being revived.

Indian Tea, for example, has been produced by Moscow tea factory M.Ch.F.
since the 1930s. Despite its unimaginative name, Indian Tea was one of the
best known Soviet brands, on a par with Stolichnaya vodka. Now a new
television ad campaign is accentuating its communist-era roots. A
prominent part of the commercial shows a Soviet family shot in black and
white enjoying a cup of the "tea with the elephant" -- the animal is a
remnant of classic Soviet packaging.  The message of continuity couldn't
be clearer.

Yearning for Stability

"This is a clever way of playing with tradition," says Andrei Fedotov,
head of market research company Russian Public Relations Group. "It's
using an old idea to create a new brand that is instantly recognizable."

It also cleverly matches the spirit of the times. Russia has just
reinstated the Soviet-era national anthem and has a president in Vladimir
Putin who appears nostalgic for Soviet values. He may reflect the popular
mood in a country yearning for stability after 10 roller-coaster years of
reforms.

Western companies are scrambling to adapt to the new patriotism. Food
giants Nestle SA and Groupe Danone have invested heavily in local
manufacturing facilities and created new products tailored to the Russian
palate. At its factory in the southern Russian city of Togliatti, Danone
produces "classic"  kefir, a fermented milk drink that is the Russian
equivalent of yogurt. The product is exclusive to Russia -- Danone neither
makes nor sells it anywhere else.

Meanwhile, Nestle's TV ads, with their tsars, duels and dances, borrow
liberally from Russian history and literature. And Japan Tobacco
International has taken the same tack with its locally produced "Peter the
Great" cigarettes.

Patriotism, though, can sometimes be taken too far, a fact best
illustrated by a recent billboard campaign for 1812 cigarettes, made by
Balkanskaya Zvezda, one of Russia's oldest tobacco concerns. The name
refers to Napoleon's abortive invasion of Russia in 1812, and the ads show
the French dictator with a black eye, under the caption: "The Ministry of
Health warns."

"This ad has had absolutely no effect," says Alexander Novikov, a
researcher at ComCon. "Patriotism is only effective if it's witty, not if
it's just a thirst for revenge."

It appears that Russians can't be won over by blatant but baseless appeals
to their national pride. In fact, food and drink aside, there are still
precious few categories of homegrown products they're proud of. Not many
people will buy a Lada car because they think it's better than a
Volkswagen.

"Consumers buy rationally," says Mr. Fedotov of RPRG. "They look at
quality, and they look at price."