Standard bearer

Roust am Tariko, entrepreneur and founder

of the Russian Standard vodka brand, talks to Nigel Huddleston about his "kids"
27 August, 2008
Page 28 

Unlike many Russian businessmen who created their empires through the corrupt privati sation of state enterprises in the early 1990s, Roustam Tariko built his company from scratch.

This is a man who likes to talk about his kids. But watch out - he could be talking about his actual kids, or about his vodkas. "I consider all our products to be my kids - it's the official language in the company," he explains. And any multinational that thinks it can take his upstart Russian Standard brand out of the market through acquisition is wasting its time. After all, who wants to sell their kids?

"I believe all of them are potentially dreaming about it," he says. "That's my guess. But Russian Standard will go ahead and I will give it to my children. A lot of people have tried to make an offer but I won't even talk about it."

Tariko could hang up his metaphorical boots tomorrow if he wanted to, because when he's not promoting his vodka, he is the owner of Russia's biggest consumer credit company.

Forbes magazine put Tariko at number 150 on its list of the world's richest people in 2007 - up from 440 last year - with an estimated personal fortune of US$5.4 billion .

Personal possessions include a Boeing jet, a house in Sardinia bought from the wife of Silvio Berlusconi, and a McLaren F1 road car. He was the first Russian to own a US$500,000 Maybach.

Tariko's kids - there are three of the real ones - will never struggle to pay off the student loan, that's for sure, vodka or no vodka. And Dad won't be blowing the money on a Premiership football club because he's not that keen on the game.

Remarkably for a Russian billionaire, the fortune has been self-made rather than catalysed by opportunistic dealing in the country's privatisation schemes. The Russian Standard vodka story starts pre-credit card days in 1998, when Tariko, a former consultant to Italian chocolate manufacturer Ferrero Rocher in the Russian market, decided to do his own thing.

He'd already been representing Martini & Rossi in Russia and his Roust distributorship would later represent Diageo as well, but Tariko thought he saw a gap in the market for a premium vodka - sales of which were practically zilch in Russia at the time.

Less than a decade later, Russian Standard claims market leadership in its domestic market and is sold in more than 40 countries - with the UK and France the latest to launch .

Speaking exclusively to Drinks International ahead of the London launch, Tariko plays down quotes attributed to him from a year earlier claiming that the brand would be going hell-for-leather to knock Smirnoff off its lofty perch.

"We'd like to become a global brand and that was the aim from the very beginning," he says. "There are only three really global brands in the market: Smirnoff, Absolut and Stoli. All the others are famous only in one specific region .

"We always strive for leadership but it's not always in our hands. We'd like to overcome Stoli next year and we'll then aim for Absolut."

The battle with Stolichnaya looks like being the bloodiest, and is rapidly turning into a fight for the vodka soul of Russia. Tariko's organisation has filed a lawsuit in a New York deferral court claiming Stolichnaya's portrayal of itself as authentically Russian amounts to "false advertising". He declines to expand but does say: "The brand Stoli is a part of the past, of the country which was called the Soviet Union."

His own brand, he argues, is more authentic despite his relative youthfulness, because it marries centuries-old vodka-making tradition with modern distillation techniques at a state-of-the-art plant in Saint Petersburg.

Smirnoff, who's tsarist forebears fled Russia in the revolution of 1917, comes off more lightly. Could he knock Smirnoff off its block , dollar-for-dollar, when it comes to marketing resources?

"I don't like these sorts of aggressive comparisons," he says. "We grow and Diageo grows and let's see what the consumer decides.Smirnoff is very big and belongs to the biggest company in the world, but why limit ourselves? Let's go after them and what happens, happens."

Tariko lightens the mood with a joke - one that's distinctively Russian in flavour. "What is the similarity between vodka and a bank? They both realise your dreams quicker."

The point is, he elucidates, that there's no fundamental difference between the two sides of his business world and he has no problem dividing his time across them.

"I'm responsible mostly for the products and investments: everything else is delegated. If there's a lot going on with vodka I spend more time on that, but if it's time to renovate the lines on the credit cards, which we did recently, I'll spend a lot of time on that."

It's no shock to find that Tariko has no time for much outside work and family. "When I wake up in the morning I have only two words running round my head: Russian Standard. Sometimes Roustam Tariko.

"My work is my hobby. I never work, I never rest. My work becomes my entertainment and my entertainment my work. I'm a serious believer that you should not distinguish between your personal life and your professional life ."

Tariko is probably a great poker player because he keeps his cards so close to his chest. Performance in existing markets and potential in new ones are summarised in a few words: South America is "interesting", China "very encouraging" and India "interesting but closed".

Germany pips the US as Russian Standard's biggest export market, though the UK could quickly appear on the radar.

He's not without an ear for a soundbite, however, professing to "hate all other vodkas" because they don't measure up to his own . He has great respect for Rémy Martin and Glenfiddich among other international spirits brands though, both of which Roust represents in Russia.

Could the future for Russian Standard involve moving into other drinks categories? "Wine is a commodity business. Nobody is able to create a strong brand name and be big in wine. If you're Baron Philippe de Rothschild you have the name but it is very small - or you have Cabernet Sauvignon but you don't own the name."

Other spirits categories are dismissed as "declining or very small against vodka". He adds: "We may go for some line extensions, but we'll stay in vodka."

That may be a crude but shrewd judgement on the global drinks market or it might be because, like all good parents, Tariko looks after his own.

"I've no appetite to buy any other spirits or buy any other brand because Russian Standard is growing so fast. Why spend the money on something else when you can spend it on your own kids?"----=== Facts and figures ===l Main export markets for Russian Standard vodka: Germany, the US

l Claimed premium vodka market share in Russia: 60 per cent

l Claimed case sales of Russian Standard vodka in Russia: 1.3 million

l Increase in 2006 export sales: 32 per cent

l Russian Standard sub-brands: Original, Platinum (super-premium), Imperia ("ultra-luxury")

l Brands represented by Roust Inc in Russia: Rémy Martin, Glenfiddich, Offley, Jägermeister, Grant's, Tullamore Dew, Cinzano, Campari, Piper-Heidsieck, Carolans, Frangelico

l Number of Russians holding a Russian Standard credit card: 20 million ----=== Roustam Tariko CV ===l Age: 45

l 1979 Swept streets in return for a room while studying at the Moscow Institute for Transport Engineering

l 1980s Found hotel rooms in Moscow for tourists on 20 per cent commission

l 1990 Appointed Russian consultant for Ferrero Rocher confectionery

l 1990s Exclusive Russian agent for Martini, quickly rising to 1.5 million cases a year

l 1992 Founded Russian Standard Group, including Roust Inc spirits distributor

l 1998 Founded Russian Standard vodka

l 1999 Entered consumer credit market

l 2005 Russian Standard bank became exclusive partner for American Express in Russia

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