Brand product with a homeland
One does not drink vodka. One enjoys it in small helpings, as schnapps, or as an ingredient in various cocktails. The word is Russian and its literal meaning is "little water". Vodka's share of national drinks markets varies greatly. In the traditional "Vodka Belt" (Finland, Sweden, Norway, Iceland, Eastern Europe) it is over 25 per cent, in the English speaking countries (USA, Canada, Ireland, the UK, Australia, New Zealand, South Africa) vodka's share of consumption ranges from a high of 25 to a low of 5 per cent. Elsewhere in the world it is less.
Finnish mercenaries returning from Europe's wars brought distilling skills back home with them about 400 years ago. Those skills have since evolved into a science that the poor warriors could not even have dreamed of. A company belonging to the Alko Group, Primalco, has developed a computerised manufacturing method that guarantees world-beating quality. The factors that contributed to the success of the original Finlandia Vodka also included the raw material, grain ripened in the long days of the Finnish summer and crystal-clear spring water. An indication of the standard of the Primalco method and the recognition it has received is that it has been exported to such prestigious distilleries as William Grant & Sons in Scotland.
"Finlandia Vodka" is one of the best-known Finnish names in the world alongside Martti Ahtisaari and Mika Häkkinen, says CEO Ilkka Suominen of the Alko Group. "People see it as a Finnish product, whereas, for example, Nokia's homeland is not nearly always recognised. Nowadays the homeland of successful international brands is hardly ever mentioned in marketing. What matters most is that the brand itself is known. On the other hand, the success of Finlandia Vodka shows that Finland's being a product's homeland is at least no drawback.
"Effective marketing is the only way to build a brand. The alcoholic beverages industry everywhere in the world invests little in pipes, tanks and brick walls compared with what it spends on marketing," Suominen says. "Before a decision to buy is made, the name of the drink must be known. Positive images must be associated with the name. That is the whole idea underlying the brand products industry. Every kind of product from designer jeans to cars is sold that way."
Alko was reconstituted as a group of companies on a purely commercial footing three years ago. "We have been very active abroad in that time," says Suominen. "We have spread into the countries around the Baltic. We have production and other operations in Poland and the Baltic States and are about to begin in Russia. Abroad we are bottling mainly vodka products, also under names other than Finlandia, in addition to whiskeys and gins in Estonia. We have been putting increasing amounts of resources into exporting. In the USA we have replaced our distributor with a new, and hopefully more effective, one. In October 1997 Primalco was at the tax-free fair in Cannes to present a new product that will be sold only on the tax-free market. Called Finlandia 21, it takes product development right into the new millennium."
When Finnish businesspeople talk about their concentration on the Baltic countries, they often forget one country on the shores of that sea: Germany. Ilkka Suominen has a good explanation for that: "Germany is where the old Western Europe begins, and we still think of that as another matter."