RUSSIAN SOFT DRINKS MAKER TARGETS 50% OF MARKET TO FILL GAP LEFT BY COKE, PEPSI

Wed 03 August 2022:

As the world’s biggest soft drinks makers cut their Russian ties, local producer Chernogolovka is aiming for a 50 percent share of the country’s near $9 billion market, its boss has told Reuters.

A mass exodus of Western firms due to sanctions and restrictions over Russia’s actions in Ukraine has created an unexpected opportunity for Russian businesses and entrepreneurs.

Chernogolovka, named after the town outside Moscow where it was founded in 1998, makes snacks, bottled water, herby lemonades, energy drinks and, since May, Cola Chernogolovka.

The privately-owned company is more than doubling its business this year, its CEO Natalia Sakhnina said in an interview, and expects to reach a 30 percent market share within two years, up from around 8.5 percent at the end of 2021.

“We were, are and will be the main Russian producer of drinks,” Sakhnina said. “We hope and are working on gaining absolute leadership in the Russian market.”

Pepsi has sold it products in Russia for more than six decades, even when the company had to trade its soda concentrate for Stolichnaya vodka and warships. McDonald’s opened its first location in the Soviet Union in 1990, just months before it collapsed.

Russia represents one of the few regions worldwide where Coke’s rival PepsiCo has a larger presence. In a regulatory filing, Coke said its business in Ukraine and Russia contributed about 1% to 2% of its consolidated net operating revenue and operating income in 2021.

Pepsi, on the other hand, generates roughly 4% of its annual revenue in Russia.

Since the Russian invasion of Crimea in 2014, many U.S. companies have looked to reduce their exposure in both Russia and Ukraine. Some restaurant chains, like McDonald’s, have sold off some of their company-owned locations to local franchisees.

SOURCE: INDEPENDENT PRESS AND NEWS AGENCIES

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