Sergei Plastinin, member of the Board of Directors, one of the Company’s founders, recounts:
It all began in November 1992. I was working at a trading company and it so happened that on my way home from work I stopped in a shop to buy juice. There was no juice for sale but they did have juice concentrate. I bought it and at home I made juice from concentrate and water. It was tasty and moreover the whole family liked it. And I was struck by how cheap this juice was – it was a sixth of the price of ready juice.
But this is precisely how modern juice production works. It is made from concentrate. Concentrate is made in countries in the southern hemisphere where the fruit grows: part of the water is removed from the fresh juice under vacuum pressure in order to maintain vitamins and to arrest the development of microbes. The thick syrup thus produced is convenient to store and easy to transport to the factory - even if the factory is located on the other side of the globe. Once in the factory, the juice is restored by putting back the same amount of water that was originally removed.
My chance home experiment got me thinking that production, given the circumstances in Russia at the time, could be very profitable. This is how the juice bottling idea came about. To bring this idea to life, we leased a milk bottling line at the Lianozovo Dairy Factory in Moscow. In order to pay for the lease and to buy concentrate and packaging, we required a small credit. This credit was provided by Sberbank. This is how the history of Wimm-Bill-Dann began.
I’ve often been asked where the name comes from. It’s quite simple. In the beginning of the 1990s imported food products had appeared in the Russian market and enjoyed far greater consumer confidence than domestic products which left much to be desired. We needed a foreign name and so that’s where Wimm-Bill-Dann came from. The original Wimm-Bill-Dann, whose portrait adorned our first juice packets, looked different to what he does now. We quickly decided to change his appearance. The familiar Wimm-Bill-Dann you see today was created for us by the designer Andrei Sechin.
In 1992 we began working in a big marketplace where empty niches were greater than occupied ones. Until the appearance of our juices under the J7 brand, no one in Russia made packaged juice. Juice was mainly sold in three-liter jars. There weren’t brands at all in the Russian food market. Jars were simply labeled ‘Cherry juice’ and ‘Apple juice’ and milk cartons were simply marked ‘Milk’. Sterilized milk products weren’t produced back then. Rather, pasteurized milk products with a shelf-life of two to three days were sold. Consumers did not know the word ‘yogurt’. There were queues in the stores for such Russian staples as kefir, curds and sour cream.
Until the 1998 crisis our main competitors in this fast-growing market were importers of food products. Foreign producers supplied a wide range of products that weren’t yet produced in Russia (yogurt is an example).
In 1998, following the sharp fall in value of the ruble, the import of food products to our country also fell. At the same time, demand for dairy products remained relatively stable as these were basic mass-consumption products. So, it can be said that the 1998 crisis supported domestic producers of dairy products. The steady increase in household incomes that began anew after the crisis had a positive impact on the consumption of dairy products, especially more expensive items such as yogurts and desserts.
Thanks to rapid growth in the dairy sector we were able to support our juice production. Also, our long-term flexible sales policy helped us during the crisis. Since the coming of the crisis was predicted by many analysts before it happened, we had already thought about what we would do if, one day, consumers found themselves with less money to buy juice. We approached the crisis with a whole range of juice brands differentiated by different consumer target markets, price and production technology. As a result, during the moment of crisis, we launched a new juice brand into the market, 100% GoldPremium, which was offered to consumers at a price 18% cheaper than our main brand, J7. This allowed us to maintain and expand our share of the market even though our profits in this business area fell significantly at the time.
In 1998 we began our program of expanding our production activities beyond Moscow and began to acquire dairy factories in different regions in Russia and then in different countries in the Commonwealth of Independent States, creating a single production network. Today we have 36 factories in 26 regions – in Russia, Ukraine, Kyrgyzstan and Uzbekistan. In 2001 the Wimm-Bill-Dann Foods OJSC holding company was founded. It defines the strategy of the Wimm-Bill-Dann group of companies.
Wimm-Bill-Dann has made many breakthroughs: the launch of the first packaged juice product, the creation of the first domestic juice brand, the launch of the first dairy brands, the acquisition of regional enterprises, the beginning of the first industrial production of berry mors (a traditional Russian cranberry juice drink) and the first production of juice containing dairy products. In 2002 our Company was the first among Russian food manufacturers to place its ADRs (level 3) on the New York Stock Exchange. In Russia today few companies maintain the same level of openness and transparency as we do.