Even in difficult times of war, we work because we have to live here and rebuild the future

– How have the company’s development plans changed?

– This year, in terms of investment rates, we have already reached the level of 2021. The only difference is that we do not accept annual investment plans, but move in the agreement algorithm within the framework of a month or a quarter.

Business is profitable. We give more than 10% of the profit to the Armed Forces. 30-40% of profit is for business development. We believe in Ukraine, we want to live and work here.

– In the last year and a half, migration processes have been actively taking place in Ukraine, the population has decreased significantly. How to stimulate consumption in such conditions?

– There are two main types of consumers: those who are loyal to a certain brand and those who choose based on the principle of affordability. First of all, we focus on the quality of our products, adhere to international production standards and offer new products. At the same time, we conduct regular price promotions, ensuring greater availability of our products for the consumer.

The main thing is to have good territorial coverage and be present in every store. Our brands have long established themselves as high-quality products, we are constantly present in the advertising field, so consumers know us “by face”. Also, it should be understood that Ukrainians choose alcohol for any moment of life. Because despite the war, life goes on.

– A few years ago, you entered retail, opening WINE WINE stores. Do you plan to develop this direction? Is the goal to create something new?

– Yes, BAYADERA GROUP plans to actively develop this direction in the future. The opening of the fifth store in Kyiv is being prepared soon.

The WINE WINE project, despite the tough market competition, has generally proved to be quite successful. Nevertheless, we are constantly forced to adapt certain components of its business model based on the realities of doing business in the country.

It should also be noted that in addition to direct sales, this format of specialized retail allows us to “communicate” with the consumer, analyze and understand his needs, and, as a result, set an impetus for the company to improve its portfolio, customer service, and become more efficient in relation to current market needs.

– Don’t you think that you are late with the launch of the online store? At that time, “Rozetka”, online supermarket stores, and other marketplaces already existed.

It is also necessary to understand that the marketplace in itself is not the highest level of development, the market is moving towards ecosystems, and in this matter there is room for development in Ukraine.

– In your online store there is an assortment exclusively of your company. Is it planned to expand the assortment?

– We plan to expand the assortment at the expense of other manufacturers and turn it into a full-fledged marketplace. We are negotiating with several potential partners.

– What is the special feature of the B2B platform BAYADERA GROUP?

– What is the competitive environment among similar marketplaces, and what is your place among market players?

– Our B2B platform is a whole complex of integrated solutions: a B2B portal, CRM system and contact center, as well as a platform for managing client tasks and loyalty. In the complex, this forms a unique combination of solutions, which is difficult to compare with anyone else. Feedback from our customers is the best measure of the quality of our implementations. Our NPS rate continues to rise, and in-depth customer surveys show that they consider us to be one of the most advanced and innovative in our industry.

– What sales figures do you get through these channels and is this direction profitable?

– The share of online orders is constantly growing, currently it is about 10% of the total sales channels. If you look at it separately, then in traditional retail this fate is much larger.

– What development prospects do you see?

For us, this is a strategic project and we see the future behind it. Our ultimate goal is to build an ecosystem and maintain leadership positions in the production, distribution and sale of quality alcoholic beverages.

– Does the war affect the number of orders and what kind of alcohol Ukrainians order more often?

– She cannot but influence. There was internal migration and redistribution of sales between regions, some customers closed their businesses. But in general there is a positive dynamic. Business and partners, despite the difficulties, continue to work and order products.

If we talk about the structure of sales, then in the classic trade, customers buy stronger drinks of our production, such as vodka and cognac, in the online store – imported drinks, such as rum, whiskey, as well as still and sparkling wine.

– Import development before the war and now. What changes have taken place, what trends are observed, what difficulties exist?

– The “Bayadera Elite” business unit, in which the entire import business of the company is allocated, plays an extremely important role. Both today and in our future development plans.

Its share is slightly less than 40% in the total sales structure of the Bayadera Group, occupying the second step of the internal ranking of our businesses, next to the businesses of local products and the direction of export.

Despite the, to put it mildly, turbulent business conditions in recent years, “Bayadera Elite” demonstrates a steady growth trend. This is reflected not only in the increase in the volume of business and sales, but also in the involvement of new brands and new “big players” in the company’s import portfolio.

A key trend for us, which we have observed in recent years, is the growth of demand for imported alcoholic products. The growth, which began even before the Covid-19 pandemic, reached its peak when the volume of home consumption increased many times, and currently continues, despite the situation in the country and a significant reduction in the number of consumers.

Firstly, due to a number of factors, imported products have become more accessible to the consumer in previous years, and the price difference with local products has significantly decreased. Promo pressure in this segment is more than 90%. Manufacturers and distributors actively promote both imported products and their responsible consumption.

Secondly, the Ukrainian consumer is becoming more educated and demanding about the quality of products, traveling, visiting tastings, choosing his favorite drinks.

Thirdly, Ukrainian restaurant and bar culture has been actively developing in recent years, contributing to the development of consumer culture. Accordingly, the global world trends of growing popularity of such drinks as whiskey, rum, gin, wine and ready-to-drink drinks have a mirror image in our market as well.

If we talk about the main difficulties and limiting factors in the import business, first of all we are talking about currency risks. For us, as an importer, it is important to always ensure stable and risk-free implementation of financial obligations to international partners.

During sharp devaluation processes, our ability to increase the price in the market or ensure the stability of payments of our customers (market operators) is quite limited. Therefore, sometimes we have to buy currency in large volumes and at rates much higher than planned. Sometimes this brings the financial P&L of our portfolio close to the minimum values.

In addition, there are many other factors that should also be noted: the situation with the availability and cost of borrowed capital, growing pressure from a number of retailers (who seek to redistribute the overall market margin in their favor and carry out the development of their own networks actually at the expense of suppliers), limited availability products from partners, caused by global logistical and production difficulties, crop failures, etc., the priority of quota distribution by producers in favor of more marginal markets, the complicated logistics model for the Ukrainian market, which underwent significant changes even during Covid-19, and especially with the beginning of the active phase of the armed aggression of the Russian Federation, constant pressure from regulatory and fiscal authorities and many others.

It is worth noting that we have many partner banks that supported us throughout 2022, for which we are sincerely grateful.

– Name the key figures for clarity.

– According to available data, the total market volume of the Ukrainian alcohol market was 492.4 million liters. Of them, the share of local products was 74%, imported – 26%.

Vodka (65%), still wines (16%) and brandy (8%) dominate the segment of Ukrainian-made products. Among the import market, the main categories are still wine (39%), sparkling wine (25%), vodka (11%), whiskey (8%) and brandy (5%).

In the period from 2019 to 2021, the alcohol market in Ukraine showed slow but steady growth. It was due, in particular, to the growing popularity of imported alcoholic beverages, which in 2021 increased by 50% compared to 2019.

However, the war had a strong impact and completely changed the structure of the market. Total sales in 2022 fell by 36%, and sales of imported drinks fell even more by 57%. First of all, the category of still and sparkling wine fell sharply (by 53%), while sales of vodka fell by only 28%. A major factor is that many women left Ukraine during the war, and women are traditionally larger consumers of wine than men.