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How Russian Brands Are Cashing In On Buyers' Patriotism

Man wearing a Putin T-shirt in Moscow's underground
Man wearing a Putin T-shirt in Moscow's underground
Oleg Khokhlov, Nina Vashaeva

MOSCOW — When Russian President Vladimir Putin's approval rating began to rise last year, patriotism crept into Russian consumer preferences, branding experts say, so much so that companies are now catering to this newfound domestic pride.

Branding agency Depot WPF recently developed a new design for a juice brand, using elements of traditional Russian painted wood as part of the packaging, says the agency's director Aleksei Andreev. The traditional painted wood is supposed to represent the "richness and warmth of the Russian soul," according to Depot WPF's website.

But it turns out that it's not just purely Russian-owned companies playing up the "Russianness" of their products. The juice brand in question, Dobri, is actually a subsidiary of Coca-Cola.

"We regularly follow the performance of goods that are related to "Russianness," but until the beginning of last year, those goods didn't do so well," Andreev says. "Over the last decade, domestic producers have called on consumers to "buy Russian," but the effect was the opposite. At most, there was local patriotism: People would buy goods produced in their region. As a result, many companies released products that emulated local products."

Nikolai Itarov, press secretary of a marketing company called PR2B, says that every third client now wants to stress their "Russianness." That's despite the fact that PR2B's most famous campaign was for the canned vegetable brand Corrado, to try and establish it as a foreign luxury brand. "The branding of Corrado was based on the status associated with foreign goods," PR2B's website explains. In reality, Corrado is entirely Russian-owned. But when the company was founded 15 years ago, 99% of consumers associated foreign products with higher quality.

Photo: polinamagdalina via Instagram

"Russians are used to beer that is Czech or German, cosmetics that are French and clothes that are also foreign," explains Sergei Kalinchuk, strategic planning chief for SPN Communications. "When you're starting a new brand, you don't need to break those stereotypes. On the contrary, you should actively use them, because they will affect the price point."

For example, no matter the political situation, Russian or Belarusian mozzarella will be sold under Italian-sounding brand names such as Bonfesto or Unagrande. "There hasn't been imported cheese in Russia since last spring, and many Russian companies have taken advantage of that and released similar products of perfectly good quality," explains Yulia Markova, the former manager of an Italian supermarket in Moscow.

"We really have witnessed the appearance of consumers who are prepared to make their buying decisions based on patriotism, but it's not yet clear what that price point should be," says management consultant Sergei Mitrofanov. "But regardless, you can only sell patriotism for a short period of time, and I think that the patriotic uprising of the past year is already subsiding."

Face of a cash cow

Though food industry companies have managed to capitalize on the nationalistic pulse of the nation, foreign companies dominate the fashion, technology and automotive industries so strongly that it would take a huge effort to compete with them, Andreev says. But he cites two interesting examples: "T-shirts with Putin's face printed on them were a local phenomenon, and the company making them sold as many shirts as they could print," he says. "There is another example of a startup that is having a lot of success with "Putinphones," which are patriotic cases for iPhones."

Photo: www.iphone-caviar.ru/Worldcrunch

Those two projects are the most obvious examples of companies trying to make a buck on Russia's current mood. And while both were extremely successful when they were released during the summer, demand has since slowed.

Another project that could be called patriotic is a fashion line started by popular Russian television personality Anna Chapman. About half of the women's clothes line feature motifs taken from Russian culture and history, and the brand was doing well even before the geopolitical situation created a wave of patriotism.

But profiting from public spirit is complicated. First of all, though production is in Russia, the fabric for Chapman's line is imported from abroad. Secondly, all of the seamstresses are immigrants who are interested in making money and sending it home. Chapman explains that there simply aren't enough qualified seamstresses who are Russian citizens. With the plunge in the ruble's exchange rate, many of these are leaving. Even those who are willing to work are periodically deported from Russia. "The government could at least start its import substitution program by stopping the deportation of seamstresses," Chapman says.

Traditional values

Outside the grocery store and a couple of viral souvenirs, Russian brands are holding steady. "Demand for our products is stable," says Vyacheslav Dolgov, general director of a factory that produces traditional embroidered scarves. "If the rise in patriotism means that we sell more scarves, of course we'll be happy. But considering the difficult economic situation, if we maintain the same sales in 2015 as last year, that would be an excellent business outcome."

Another question is whether the geopolitical situation will lead to a boycott of Russian goods overseas. Many Ukrainians have long been boycotting Russian products, cultural events and websites, but Russian brands don't appear to be threatened in other countries.

"It's hard to talk about the fate of Russian brands in the West, because there are practically no Russian brands in the West," says Rustam Salimzyanov, director of strategic planning for an advertising company. "It’s true, ironically, that some Western brands of products associated with Russia have suffered," he says. For example, gays and lesbians in the United States boycotted Stoli vodka, which belongs to a company headquartered in Luxembourg and is bottled in Latvia, because of offensive anti-gay statements made by Russian politicians.

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