Tatiana Lukinyuk, General Manager of Red Bull in Ukraine, shared an opinion with readers of LDaily on the development of energy drinks, this relatively young category on FMCG market of Ukraine. To survive and prepare for restoring after COVID-19 crisis, according to the General Manager, it is necessary to reconsider strategies and approaches in sales and marketing, so that the business will not only return to its usual levels but also develop in new sales channels.
LDaily: Because the worldwide coronavirus quarantine was imposed, mass events were prohibited. It is unclear when the world will return to normal life. How does this affect the business?
T. Lukinyuk: The impact of quarantine will differ from business to business obviously. Energy drinks belong to FMCG (Fast Moving Consumer Goods), goods in mass consumption. FMCG categories are characterized by rapid decline, but then similarly rapid recovery. People continue eating and drinking in any crisis. Of course, ways of buying our goods have changed for long time, and some will change for good: more e-commerce, less premium, higher importance of discounts. However, unlike restaurants or tourism business, such changes do not destroy FMCG categories or businesses entirely. We had to reconsider our strategies and projects in marketing and sales, and particularly, we canceled our world-famous and favorite event Flugtag in Ukraine this year, also adapted our ways of working with restaurants and nightclubs. We have incurred losses, but this will not kill the business in the long run.
LDaily: How is the energy drink market developing in Ukraine? How does the dynamics of consumption change every year?
T. Lukinyuk: Energy drinks in Ukraine are underdeveloped and have low per capita consumption, so over the last few years, the category has demonstrated steady growth. Quarantine has influenced this trend negatively: energy drinks are non-essential goods, and, in addition, mostly consumed during social occasions. Therefore, for consumers decreasing consumption of energy drinks was a no-brainer. However, we see how quickly people are returning to pre-quarantine habits, so we expect that the previous demand level will return to our category.
LDaily: What social initiatives does the company implement in Ukraine?
T. Lukinyuk: Our largest social initiative worldwide, Ukraine included, is the Wings for Life World Run: run race, which aims at raising funds to find treatment for spinal cord injuries. Runners start simultaneously around the world on given date and time, regardless of timezone, season and weather conditions. Among the participants are beginners and experienced runners, professional athletes, people in wheelchairs. The uniqueness of the race is that the participants do not run to the finish line, but from it, trying to “escape” from a real or virtual catcher car (Catcher Car), which is a “moving finish line” and follows the participants at a given pace.
Considering the current public health concerns, our races around the world were canceled this year — both mass live and organized races with a mobile application, which were scheduled for May 3, 2020. But we are looking hopefully at next year.
LDaily: What do you expect from this year?
T. Lukinyuk: First of all, we expect negative conditions in the economy: crisis, hryvnia devaluation, GDP decline… This is not the first time, and, unfortunately, not the last. However, we do not perceive this year as a catastrophe, it is just another crisis period in the Ukrainian and world economy. It is important to regard it this way, so that the business has a long-term prospect of development and growth whenever favorable conditions occur.
LDaily: How do you minimize corona crisis losses?
T. Lukinyuk: Considering our category, the priority task is to be ready for a quick recovery vs cutting costs significantly. For that purpose we have reconsidered all our strategies in marketing and sales.
LDaily: How do you assess the business climate in Ukraine? Do you plan to invest in the Ukrainian market in 2020 or next year?
T. Lukinyuk: The business climate in Ukraine is now in interesting situation. On the one hand, there are new faces in the government, desire to change everything for better, willingness to listen to business. On the other hand, quick decisions are not always made professionally, there are constant changes — and this creates additional difficulties for the business. Regarding planned investments — let’s keep it confidential. Planning in Ukrainian business is not the most rewarding job.
Please read: Crisis: a guideline for publicly exposed companies
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