Azbuka Vkusa is a Russian chain of high-end grocery stores. Its name means “A to Z of Taste” in English. Stores are mostly located in Moscow, with some in St. Petersburg. Something it is particularly well-known for is the import of specialty products from Japan, including many western products such as cereals that have production or distribution there.
Azbuka Vkusa was founded in 1992 in Moscow, where it also has its headquarters. The founders, Maxim Koscheenko and Oleg Lytkin, own 45% of the business, and also sit on the board of directors. Outside investors, including well-known oligarch Roman Abramovich, own 37%. CEO Vladimir Sodovin has overseen its recent transition from the “supermarket for the rich” to a store that serves a (slightly) more diverse clientele.
In 2016, the company brought in revenues of $750 million dollars. At the present moment the company is privately held, but there has reportedly been some consideration of an initial public offering in the future.
As far as expansion, Azbuka Vkusa is looking primarily at further developing in the St. Petersburg and Moscow markets. This could be because it sees its customer base as being primarily small families that are reasonably well off. Despite not being the largest retailer, some of its achievements speak to a record of quality rather than quantity. The company is first among Russian stores in turnover per square meter. It also became the first retail food company in Russia to create a quality management system based on ISO 9000 standards.
Not all is well, however. Ownership of the firm has created some controversy, including a lawsuit concerning the purchase of certain shares that involved Mr. Abramovich’s investment company Millhouse, which primarily invests in start-ups across different industries. Additionally, market diversification has brought into question their business model of selling high-end products that one cannot get elsewhere – such products are increasingly fewer on the market.
Azbuka Vkusa definitely has a reputation as a grocery store for the well-heeled. It has a record of high quality but could get into some trouble as the market becomes ever more competitive and diverse. It will be interesting to see if it does indeed end up having an initial public offering soon to bring in fresh capital.
An advertisement for Azbuka Vkusa.