The two founders of Moscow Brewing Company (MBC) have been relying on the equipment provided by systems supplier KHS since 1998 – much longer than the brewery actually exists. There’s a simple explanation for this; Alexander Lifshitz and Eugene Kashper have been earning their money with beer since this date. Lifshitz, actually an energy engineer by trade, went to the USA for a brief period after the collapse of the Soviet Union to train in business administration. He returned to Russia with a contract for the import of American beer brand Stroh in his pocket. Back in Moscow he got to know Kashper who had just taken over the management of the Russian branch of Stroh Brewery.
Partners right from the start
Kashper, the child of Russian parents, grew up in the USA, graduated from Columbia University in New York and last worked at the Moscow offices of Ernst & Young management consultants before moving to the brewery. Shortly afterwards Lifshitz and Kashper founded the Pivovarni Ivana Taranova (PIT) brewery with plants in Khabarovsk, Novotroitsk, and Kaliningrad. In just a few years the company had become the biggest independent producer of beer before its founders sold it to Heineken in 2005 – only to start all over again just outside the Russian capital with an even bigger, even more modern enterprise.
In this venture KHS proved to be an important partner for the two businessmen who had established a trusting cooperation with the company during their years at PIT. Natalia Nikashina, head of Sales at KHS Russia, has been in close contact with Lifshitz and Kashper since 1998 – which feels like forever! When asked about the secret to this long relationship of trust, she replies, “It’s nothing special, really. We’re just people who want the best for their respective companies.” What counts in her view is that KHS can offer its customers more than just a system. “Of course it’s also about quality and price but first and foremost customers want systems where not only the technology but also the service and support are essential.”
The new company, MBC, obviously also feels that it is excellently looked after by KHS; to date the brewery has procured six of its ten filling systems from the Dortmund systems provider. Yuri Lobanov, plant manager of the huge brewery in the north of Moscow, can only confirm his company’s close and special relationship with KHS. “We really do have a very close and trusting relationship. Not only is the chemistry right between all those involved but also our common goal, namely to implement new projects without any problems.” Lobanov especially values KHS’ outstanding flexibility both with its systems and in its service. “KHS is a lot less bureaucratic than other companies and much faster at making decisions. "As we’re the same, this works really well.” For her part Nikashina has plenty of praise for the super team at the brewery. “These are young, dynamic people – also in the engineering department – who in a short time have created something really great.” Under what were not always easy circumstances.
“With its experience KHS helps us to make real innovations out of our ideas.”
The Russian beer market has undergone a strange development in the last 20 years. In a nation of vodka drinkers, where traditionally spirits make up the largest percentage of all alcoholic beverages by far, the amount of beer consumed per head first increased fivefold between 1995 and 2007 and then slumped, with consumption now down by about a quarter.
This has been caused not just by the weakening Russian economy but primarily by the government’s fight against alcohol abuse throughout the country. With around 15 liters of pure alcohol per year the consumption in Russia is almost three times as high as the value recommended by the WHO. Beer was only officially categorized as an alcoholic beverage and not a food in 2011. Since then the tax on beer has risen dramatically and the sale of beer at kiosks has been banned. This has caused several big international groups, such as AB InBev, Carlsberg, and Heineken, who profited the most from the swift development at the turn of the millennium, to recently shut down a number of their operations.
Successful start with KHS
In contrast MBC is all set for growth. Built in 2008 on a greenfield site in Mytishchi, the brewery now clocks up an annual output of over four million hectoliters. Three KHS filling lines were part of the setup right from the start: a glass line for up to 50,000 0.5-liter bottles per hour, a PET line for up to 22,800 1.5-liter PET bottles per hour, and a keg line designed to process 80 to 120 kegs per hour. As the company soon achieved annual growth rates of up to 80%, not much later MBC then invested in another KHS glass line and a KHS canning line with a capacity of up to 40,000 0.5-liter cans per hour.
The company’s expansion strategy is rooted in the great demand for special MBC products which is based on a successful brand policy and intelligent marketing. Of the approximately 40 beer styles which MBC produces Zhiguli Barnoe is the top seller by a long way. It revives a pilsner which was very popular during the Soviet era. Sold between 1960 and 1990 by the Zhiguli brewhouse in the center of the capital, it was famous not just in Moscow but throughout Russia. Brewed with Saaz hops from the original recipe, Zhiguli is available in bottles and cans and in kegs for the hospitality trade, the latter also supplied to the reopened Zhiguli Bar, among other establishments.
This success is no coincidence. MBC’s advertising slogan is “The honest brewery”. Lobanov explains what this means in more detail. “It’s our policy to sell high-quality beer at a reasonable price. Technologically, we gear ourselves to producing quality not quantity and use the best raw ingredients. In this way we produce a wide range of beers, each with their own distinctive character.”
With its own brands MBC services all segments of the Russian beer market, as the plant manager declares. While Zhiguli is classed as a mainstream beer, the remaining portfolio ranges from economy brands such as Kruzhka, which is sold in a bottom-fermented, a strong and a wheat beer version, through premium brands like Trekhgornoe, also a revival of a traditional Moscow beer brand from the 19th century, to the high-end product 5th Ocean, which is available as a Belgian blonde beer and a grand ale and filled in champagne bottles with natural corks and a cage.
Regarding packaging the range of MBC products is also marked by its huge variety and many special requirements. There are conical bottles, beer bottles with handles that look like jugs and bottles with a wider neck diameter. In view of the many different products and multitude of container shapes and sizes the choice of the right filling and packaging technology played a key role. “We have very specific project and design requirements and are always on the lookout for new, efficient systems. In KHS we have a partner at our side which with its experience helps us to make real innovations out of our ideas,” stresses Lobanov. “The biggest advantage of our KHS lines is thus their flexibility. On them we can realize countless innovative packaging styles and be the first to launch these to market. And with KHS we can also grow in the craft beer segment.”
This is a segment which is growing very fast in Russia. While the market for industrial beer has stagnated, handcrafted beers were able to grow by almost 20% in 2015. “We’re watching this development and have already included the first handcrafted products in our program,” explains Lobanov, one of these being Mohnaty Shmel brewed on its own initiative, which translates as “fluffy bee”, plus a whole host of beers made by Russian and international craft breweries.
MBC can’t go much further, however. “There’s almost no more space to expand in our production shops,” is how Lobanov describes the current situation. “In the future we’ll thus concentrate instead on modernization and system replacement and also especially on format conversions and maintenance and service.”