VkusVill is a Russian grocery store chain that focuses heavily on fresh food and produce. It is one of the first stores in Russia to attempt to completely integrate its logistics, with the store controlling the production and branding of nearly all of its products. Its name translates to “Tasteville,” implying that their fresh food tastes better than products from competitors.
The group that operates these stores was founded in 2009. The first products to be sold were milk and dairy. At the time, they were sold under the Izbenka brand (an izbenka is a traditional Russian rural hut) from small kiosks in rented space in grocery stores. Store founder and owner, Andrey Krivenko says that he was initially inspired to launch the business when he could not find a supply of the fresh Russian cottage cheese that his pregnant wife craved.
As the popularity of the brand grew, in 2012 the group expanded to open its first stores with the branding “VkusVill” (usually co-branded with Izbenka at first, and later with just the VkusVill brand). Most of its first stores were light on products and generally Spartan in appearance. VkusVill sources its products from local Russian farmers and the food is then processed and packaged by VkusVill. This gives the store complete control over quality but also a wider share of profits in the production chain. In fact, 95% of goods in-store are domestically and usually locally sourced. Nearly all are VkusVill branded.
As the brand has grown, so have its product offerings, filling the store shelves with most basic necessities from fresh bread and produce to ready-made or frozen dinner items. Russian counter-sanctions against agricultural imports from western countries helped the company by increasing both demand and prices for goods produced domestically. In this, it is similar to Russian meat producer Miratorg.
Russians are particularly sensitive to food quality and VkusVill looks to capitalize on this. The company has also begun to adopt more sophisticated store designs that are meant to impart to visitors that it offers only environmentally friendly and fresh food, with rustic and natural-looking, yet still modern, interiors. They are also now running promotions through their store card program to encourage people to eat a more diverse diet by offering discounts to people who buy more than 30 different foods each month.
The company has been influential in encouraging small Russian farms to diversify production. It now offers many natural cleaning products and cosmetics – although many of these rely on imports or imported ingredients.
VkusVill brought in revenue of $480 million in 2017. The company set major expansion plans for 2018. These included doubling the number of stores to 1000, expanding to St. Petersburg, and a range of locations spiking out in about a four hundred kilometer radius from Moscow.
VkusVill is a fascinating Russian business that is growing from a small, privately owned chain to a major regional family-run enterprise. A set of unique circumstances and innovations have enabled it to rapidly expand into a significant force. Although it is still not a major national player, it is tapping into a higher-end market for natural foods that has not been given a modern commercial outlet before.
Interview with VkusVill founder Andrey Krivenko.