Historic vodka to enter Asian markets: Heritage and authenticity key to long-term growth – Origen X
Origen X acquired the world’s oldest vodka brand Mikolasch as part of its plan to build a legacy portfolio of valuable spirits brands around the globe, with Asia as one of its first few target markets.
"It sounds very ambitious, and it is. But because our strategy is long-term – which could span 20 to 30 years – it’s a lot more achievable. It’s not about building volume to sell brands. Our goal is to create a legacy portfolio of the world's most valuable spirits brands," said Zak Oganian, CEO of Origen X.
"One of the pillars of this strategy is the historic heritage and authenticity of these brands. The industry has a lot of brands that are not authentic. That’s why the first order of the day was to acquire very valuable historic brands with tremendous potential and making them relevant again.
"We own some of the oldest whiskey brands and the oldest Haitian rum. Mikolasch fits perfectly into our long-term strategy as the oldest vodka brand in the world.
“Immediate trends focus on what's cheap and sells quickly, like sweetened and flavoured products. While aligning with immediate trends might yield short-term gains, it doesn't build a legacy project."
Opportunities in Asia and the Middle East
Oganian finds the APAC and Middle East regions challenging and exciting. He identified China, Japan and Singapore as major trend drivers in the premium spirits category and aims to distribute Mikolasch in at least 15 territories by the end of this year with plans for further expansion.
“APAC and the Middle East have a growing, educated consumer base with high purchasing power, but they are challenging. In APAC, the industry is highly regulated and only a few players have distribution capacity or rights. This situation is changing, but it will take years to evolve," said Oganian.
"Craft brands outside of the multinationals struggle due to this. Furthermore, the Asian market is highly fragmented, making it hard to operate compared to more consolidated markets like the UK or America.
"In Asia, there are parties that excel in retail but lack expertise in e-commerce or on-trade activation, which means we have to manually manage this on our end.
"Despite these challenges, we are present in Asia with distribution agreements for Mikolasch and our existing whiskey brands."
In the Middle East, the market is also dominated by a few key players. The firm is actively working on entering this market and are currently involved in tenders with several parties.
“Key markets in APAC include China, Hong Kong, Japan, Malaysia, Singapore, and India. By the end of this year, Mikolasch should be in at least 15 territories worldwide, with more to come, including Dubai," said Oganian.
"In APAC regions like Hong Kong and China, we aim to start shipping around August, with products on shelves by October or November, followed by gradual expansion to other regions in Asia."
Oganian sees the vodka category as undeveloped compared to whiskey. This gap in the market for premium Ukrainian vodka has provided an opportunity for Mikolasch.
“People don’t drink less, but their consumption patterns shift. They may choose to drink at home instead of going out. Producers must adapt by focusing more on retail as consumer spending habits change," he said.
"Essentially, if consumers are uncertain about the future, their spending patterns change even if their purchasing power remains the same."
Reviving Mikolasch
Mikolasch was created by Ukrainian father-son duo, Piotr and Juliusz Mikolasch, in 1842. To retain its authenticity and heritage, Mikolasch continues to be manufactured in Ukraine.
“For Mikolasch, we started with corn, which is extremely popular in Ukraine but not as globally recognised. Our first release was from a corn farm, and we emphasised transparency by including as much information as possible on the label, like the farmer's name, the farm, the type of corn, and its seasonality," he said.
"We also created a QR code for additional details that could not fit on the label. This is for consumers who want to know as much information as they want about a brand, like how all ingredients are sourced locally in Ukraine, including the well water used in production. The Lviv region, near the Carpathian Mountains, provides good quality water compared to other regions."
To ensure that its product is premium yet attainable, Origen X has a very specific pricing strategy.
“We always have a range because we don't want to create a product that’s unattainable to many. We want to create a product that can be enjoyed. We never work with discount strategies or mass market, standardised strategies," he said.
"There is a certain entry level, but it's predominantly affordable and attainable to the general consumer. For instance, our first release, the single farm Corn Farm Mikolasch, will retail at about £23–25 on the shelf in the UK and around 22 euros in Europe."
