This summer, at the residence of the Swiss ambassador in Moscow, there took place the latest tasting of the wine made by the Burnier husband and wife team. One can sample this wine in the Russian capital’s most expensive restaurants, and it is on sale in well-known wine vaults such as “Vinny Rynok”, “Massandra. Legenda Kryma”, Wineroom, and “Russkaya Vinoteka”. And it all started in 1997, when Renaud received a request from the Russian embassy to make a wine to celebrate the 200th anniversary of the Russian army crossing the Alps under the command of Alexander Suvorov. And so the wine bearing the name “Suvorov” was born. The Swiss vintners were astonished when, at the Russian embassy after the wine tasting, people started to approach them and ask for it to be brought over to Russia.
The Burniers’ wine was first presented in Moscow in 2006 at the Bolshoi Theatre at a banquet marking the premier of a Swiss ballet by Maurice Béjart. On that occasion, it received a warm reception from the guests.
— What objective did you set yourselves at the start of this journey?
— Before, we hadn’t even considered supplying our product to the Russian market. The Swiss are great admirers of fine wines as well as being patriotic: they always prefer Swiss wine. But it is hardly known outside Switzerland as all of it is drunk within the country. Furthermore, on the domestic market it only makes up 40% of overall consumption. So, there wasn’t even enough of our wines for our regular customers.
— Our wine was met with great interest from the Russians. So we went to Moscow to see what was happening there on the wine market. That was towards the end of 1998. In the Russian capital in those days, it was almost impossible to find good wine, all the more so at a reasonable price. We were struck by the fact that there wasn’t even any in the very heart of the capital, in the hotel “Moskva”. But what surprised me most of all was that there wasn’t any Russian wine anywhere to be found. In the shops and restaurants, they told us that wine isn’t produced in Russia or that, if so, it was of terrible quality. But when we were students at the School of Higher Education for Winemaking at Changins, they told us that the south of Russia has unique conditions for viticulture and winemaking. So then we decided to go down to the south and find out why there isn’t any Russian wine.
Renaud Burnier, from a long line of vintners, took over managing the family winemaking estate in Switzerland in 1985 on graduating from the School of Higher Education for Winemaking at Changins. In 1995, he met his Russian wife Marina. In 2001, the Burnier couple established a family winemaking estate in Russia in the château style where wine is produced from its own grapes.
The Burniers’ wines from Russian grapes was met with great acclaim from experts in Switzerland, on a par with wine from the best-known châteaux in Bordeaux. The Burniers’ Russian wine is served at top hotels such as The Peninsula Hong Kong, Le Grand Bellevue Gstaad, and the Hotel Bellevue Palace in Bern.
— Your first impressions from this trip?
— When we first went to a Russian vineyard outside Anapa, Renaud, like a true winemaker, tasted one of the grapes to evaluate its quality. It was a grape of the Krasnostop variety. Renaud was impressed by the potential incumbent in the grape and in the terroir itself. He said that here it is possible to make not just good but outstanding wines. And that Russia would be able to be no less proud of its wine than France or Italy. We decided to create a proper family wine estate here in the château style, and to produce a wine which is of the very highest quality by international standards.
But in 1999, the situation in the south of Russia resembled a post-war scene. Many vineyards stood derelict, or people were only just about managing to work them due to a lack of money. Equipment was being turned into scrap metal. No one wanted to invest in agriculture; no one was interested in vineyards.
— How did you solve these problems? Where did you start?
— We started by spending three years looking for land. In August 2001, we found the land we had been dreaming of: a plot which, with its relief and layout, was very similar to our vineyards in Switzerland. We bought the leasehold from a local farmer, carried out large-scale drainage works, prepared the soil, put down 30 hectares of vines. In Russia then it was almost impossible to buy anything: tools, materials, seedlings, equipment, farm machinery. We had to import all of it from Europe.
— How much money did you need for the initial stage, and how did you finance the project?
— At the initial stage, the investor in our project was the Swiss Department for the Economy. At the time there was a special programme run by the Swiss government to provide assistance to Russia in developing its economy. We received not only a loan from the economic department to develop our business, but also the help of numerous experts in, for example, drawing up a business plan. In terms of our own money, for the initial stage we invested over 1m Swiss francs.
The Swiss department is still helping us today. This project already has a political undertone as an example of Russian and Swiss collaboration. Our wine is served at receptions both at the Swiss embassy in Moscow and at the Russian embassy in Bern. We are happy to play a part, in our own way, towards strengthening Russian-Swiss relations. By the way, history is repeating itself: 200 years ago, Swiss winemakers played an important part in developing viticulture and vineyards in the Russian Empire.
— Will your enterprise require new investment in the future?
Over the last ten tears, the Moscow wine market has grown and strengthened considerably. A number of serious operators have appeared with some respectable and highly interesting beverages in their portfolios. In the main, Moscow’s chains of wine sellers are the retail outlets for a parent wholesale company engaged in supplying imported alcohol from Europe and the New World.
There are independent specialist shops, as well as shops without their own imports direct from producers, but they are in extremely small numbers. A decisive role in creating this structure is played both by legislation, which doesn’t allow all who wish to enter the market to do so, and by fairly stiff competition which obliges business owners to maintain modest prices and provide service from highly qualified specialists with a knowledge of alcoholic drinks, also known as cavistes.
The standard of the drinking culture has risen considerably in recent times: something we constantly observe in our customers who are made up by the more educated and affluent inhabitants of the city. They constantly need to be offered something new. Moscow consumers are demanding in terms of quality and service, and repay this with their loyalty, ensuring a steadily high demand.
Recently in Moscow, there has been a particularly large growth in the demand for wines produced in Russia: from Krasnodar Krai and Crimea. Unfortunately, the line in Russian wines is currently provided only by large producers: factories established in Soviet days. The niche for quality mature dry wines is by no means filled, and is, at this moment in time, occupied by producers from abroad.
This is a particularly fruitful time to start a wine business: long-term rent prices have dropped considerably, with profitability increasing, and the recoupment period for the business shortening. Opening a specialized store such as Alta Vina requires about 6m roubles. The average cost of renting premises of 60 sq. m. in the centre of town is now about 350,000 roubles a month, the cost of refurbishment, including the shop sign, is 2.5m roubles, equipment – 1m roubles, office equipment and software – 300,000 roubles. Plus the initial purchase of goods – 2m roubles, state duty – 325,000 roubles. The recoupment period is 1–3 years.
The wine market has great development potential due to people’s greater desire for a healthy way of life, the decrease in their consumption of strong liquor, and their moving over to quality dry wines.
— In 2005, our first wine was ready, and literally all the international wine experts gave it a very high rating. Nobody could believe that this wine was from Russia. This praise spurred us on to develop our project further. We decided to build a winery at the vineyard itself following all the environmental and energy-saving rules set out for producing the very best quality wine. This decision increased the cost of the project considerably as well as the length of the recoupment period. All the building work had to be done from scratch. At the vineyard, there was no electricity, no water, no roads. We had to get a loan from the bank. In total, a further 12m dollars was invested in the project. The investment period for our business ended not so long ago, and we only reached the breakeven point recently. It took a lot of time to be granted all the types of permits and licences you always have to have in Russia: for the production, storage, and selling of wine.
— What are the mistakes you can reproach yourselves with now that you have the experience of working in Russia behind you?
— Of course, we didn’t get away without making some mistakes, but they did teach us a lot. For example, now we realise that we should have found the financial and legal experts who could have helped our enterprise on a permanent basis with their knowledge and understanding of all the nuances involved in our work, right from the start.
— What has changed over the last few years, and how do you evaluate the situation at your estate and its prospects for the future?
— We came up against all manner of difficulties, ones which you can only come up against in Russia. We lived through a time when a new regime was being established, and we bore witness to a new system being set up and consolidated. Over those years, the laws and rules governing agriculture and alcohol production have changed several times. This created a raft of problems. All the same, we never gave up. A lot of good people in Russia, in Moscow, are supportive of us. Our vineyard and wine are like our children. The main problem is that up until recently, in Russia we have had to adhere to the demands of a very complicated and stringent regulatory system regarding the production, storage, and trading of wine. It is good that the situation is now changing. Winemakers are now recognised as agricultural producers, and the requirements of them are not as strict as they are of other organizations. Unfortunately, the process of changing the law is happening very slowly. But the main thing is that this process has actually started.
— We have had some remarkable successes. We have grown quality grapes in Russia and produced excellent wine. We consider it a huge achievement to have revealed to the world an ancient variety of Russian grape, the Krasnostop Zolotovsky. Our market sector is the niche for premium terroir wines made exclusively from one’s own grape. In Russia, there are all of three or four such enterprises. So there is enough room on the Russian wine market for everyone. To make a comparison, on the Swiss market there are over a thousand producers of such wines. In Russia, the problem lies not with competitors but with the consumers. Consumers have an unshakeable preconception that it is not possible to produce quality wine in this country. All Russian producers encounter this stereotype. We think that Russian producers of quality wines should unite and fight against this together.
— Where is your wine sold?
The average Russian annually drinks around seven litres of wine, including still, sparkling, and specialized (fortified) wines. This is significantly less than in the USSR where wine consumption was up to 20 litres per person. Russians love sparkling wines and drink them most of all, especially on festive occasions. The greatest demand is for semi-sweet wines, though in recent times consumption of dry wines has been on the increase. In terms of the percentage of imported wine on the market, one can make the following comparisons: of every three bottles consumed by Russians, one is produced at a domestic vineyard, the other is from imported wine materials, and the third is bottled abroad and imported. The culture around wine consumption is changing too. It is now considered cultivated to drink wine in Russia: in other words to pair it properly with food, learn about it, sample it, and develop one’s own taste.
The Moscow wine market is the largest in Russia. One can say that in monetary terms around half of all wine sold is sold in this city. Wines from France and Italy, in the first place. Very popular are Georgian wines. Gaining more and more momentum are sales of Russian wines, especially from Krasnodar Krai and Crimea. But there is a calamitous lack of high quality Russian wines, and the Moscow market is set to be dominated by imported wines for many years to come.
Muscovites still drink noticeably less wine than Londoners or New Yorkers, but wine consumption has become fashionable. In Moscow, as in other large European and American cities, more and more wine clubs and wine bars are opening up where tastings take place. Sales of wine over the internet are prohibited but it is hoped that they will once more be permitted in the near future.
The conditions for market development over the medium term are extremely favourable. Muscovites’ incomes are beginning to increase now that the economic crisis has come to an end, and wine consumption will begin to grow at a much faster rate than during pre-crisis days.
— In Russia, it is difficult arranging direct sales of wine, as you have to have a licence both to store it and to sell it. So we started selling it from Switzerland. Over the last few years, we have built up a circle of regular customers which keeps on expanding, made up of restaurants, shops, and private individuals. During the Olympic Games in Sochi, our wine was the official one in the Swiss House. Many Swiss, once they had tried it, started to order it direct from us. The main buyer of our wine in Russia is the METRO Cash and Carry hypermarket chain.
— What advice do you have for foreigners interested in the business opportunities in Russia?
— The opportunities for business in Russia are huge: many niches are completely unfilled. We are always finding a lack of goods or services we need. But the business development conditions in Russia won’t suit everybody. You need a lot of patience, perseverance, and a fighting spirit. The main thing to remember is that in Russia everything is possible. The most important thing is to find reliable partners you can trust to minimize any unpleasant surprises, as the business culture in Russia is not particularly developed yet. And you have to have a love of Russia and the Russian people. Without this love, in Russia, it is not possible to do anything at all.