Immediately after the launch of the invasion of Ukraine, videos began to appear on social media of people, including state governors and bar owners in the United States, pouring Stolichnaya vodka into the sewers to protest against everything Russian.
The brand has been caught in the wave of popular opinion against USSR-related products, from vodka to caviar, despite the spirit being made in Latvia and owned by a Russian-born critic of Vladimir Putin .
“I get it. It’s moving,” says Damian McKinney, managing director of Stoli Group, a former British Royal Marine who served in Northern Ireland, Central America, Bosnia and the Gulf War. He also led a refugee camp in Kurdistan.
McKinney knows what a crisis looks like – even if the war this time for him at least has meant a corporate war rather than getting involved on the front lines in Europe.
McKinney speaks as if working at Stoli were a military mission, emphasizing the need to help his teams “on the ground” in Russia and Ukraine, as well as the need for strong leadership and decisive action to prevent the mark is inadvertently sucked in. boycott.
Even when he took the job nearly two years ago, having moved into management consulting after his career in the military, he recalls thinking about the work needed to turn the company around: “J I still have a special forces mission in me. ”
Now, he says, the job is to subvert people’s perception of a brand that has been a symbol of Russian drinking culture. “I have a lot of experience in crisis management. Knowing about an ambush is very useful in this case.
The rights to the Stolichnaya brand were acquired in 1999 by SPI Group, a Luxembourg company founded and owned by Russian businessman Yuri Shefler. McKinney says Shefler is a vocal critic of Putin, who left Russia under pressure to sell the brand two decades ago.
McKinney made sure he did extensive due diligence on Shefler before taking the role to ensure he was working with someone he considered one of the “good guys”.
At the time, that meant he was ready to change the company’s position in areas such as sustainability and diversity, but that has taken on new meaning since the start of the war in Ukraine.
“I did my due diligence – he was a guy on the resistance side. He left Russia because he totally disagreed with Putin and his way of working,” he says.
“[But] it wasn’t just about whether he was on the wrong side, as that was clearly a red flag. Is this the kind of guy I could work with who is really going to commit to sustainability? Is he really okay? And what comes back is an individual who truly believes.
The company has been engaged in a decades-long legal battle around the world with a Russian company that has sought to use the mark and is selling under the mark in Russia. Shefler had by then left Russia for a new home in Switzerland.
This dispute may become less awkward given plans to drop the Stolichnaya name for her moniker, Stoli, in the future.
The spirit is already made in Latvia, but the company will now source grain from Slovakia, rather than Russia. The company also wants to build distilleries in Scotland, Kentucky and Japan.
“I realized people would see us as Russians,” McKinney says. “The Latvian piece is very important.”
It also reflected a wider problem for the drinks industry: he says spirits makers had long relied on Russian and Ukrainian grain, particularly for Scotch whisky. “There is so much dependency all over Russia.”
Many Western companies have severed ties with Russia, selling or closing local operations and denouncing the war. Stoli also criticized the invasion and donated to World Kitchen, a charity that provides food to Ukrainian refugees.
The company launched a limited-edition vodka to raise funds for humanitarian efforts.
“People want to know which side you’re on,” McKinney says. “Let’s stand up. It’s about Putin, not the Russian people. The key is leadership.
McKinney says the Russian invasion sparked a renewed awareness in the private sector “that we can’t just rely on trade and government sanctions there, we have to play our part.”
“There are a lot of people coming out of Russia [after] tremendous pressure. It’s a business imperative driven by politics,” he says. “For me, it was very simple. Which side do you want? We do not support Putin.
Three questions to Damian McKinney
Who is your leadership hero?
My grandfather Redge Cater, citizen soldier. Drafted at 16 to fight in the First World War, wounded at 17 in the Somme, but after nearly losing his leg returned to fly in the Royal Flying Corps. Re-enlists at age 40 to fight in World War II. Won a Military Cross for driving his company of soldiers back through enemy positions, after being completely surrounded, to his own lines. All of this having been injured earlier while standing on a mine.
His three pieces of leadership advice when I joined the Royal Marines aged 18: When you’re shot you’ll be terrified, but as a leader it’s unacceptable to show fear, if not everyone will run away. On offense, never stop, momentum is everything. If you stop, it will be difficult for you to move again. Your job is to always deliver the mission, but always think of your people. They are precious. Never leave anyone behind!
If you weren’t a CEO/executive, what would you be?
I would be a farmer. I love the joy of planting seeds/trees, raising animals and watching them grow. Dealing with the vagaries of weather and fate along the way.
What was the first leadership lesson you learned?
When I was 13, I was given a book of black marks to distribute to younger children for misdemeanors. Before I knew it, I fell into a pattern with my peers of who could distribute the most. I quickly realized with horror the negative effect we had. A year later, I was given a leadership position at a new school. I tried the opposite which was to inspire people and understand the reasons/context.
Sales for the brand plummeted after the invasion, he says, but the company has so far not lost money as the stock was largely held by liquor distributors.
“There was a moment where we thought, ‘Oh, this is going to be tough, and we’re losing’. But actually, if anything, it’s come back very strongly. And we feel pretty good.
He adds, “I put it down to people seeing us as a different company.
Other initiatives include the rebranding of the Stoli sponsorship of a racing car team. But he says advocacy activity won’t be limited to just the duration of the war in Ukraine. He sees this crisis as a reset of principles more broadly for business, and how companies and their management operate on the global stage.
“You set the standards, and it’s really difficult. But if we don’t aspire to that, you get the bad guys coming. And you get whatever’s wrong, whether it’s political or otherwise. For me, personally, it’s renewed a realization that I’d like to play a bigger role in saying this is wrong.
When he took over in 2019, McKinney thought the challenge would be a more conventional management task: taking over a once well-known brand that had gone astray and refreshing its identity.
The company sells more than two-thirds of its spirits in the United States, with a portfolio also including rums and tequilas. McKinney says he has a particular clientele in bars in states like Florida.
About a fifth is sold in Europe, with the rest coming from other parts of the world. But it has seen a slow decline in countries where it was once a market leader, such as Britain.
The brand was made popular in the UK in the 1990s after two characters from the hit British TV show absolutely fabulous created a cocktail called the Bolli-Stoli, consisting of Bollinger champagne and Stolichnaya vodka.
He says his 35-year-old still roughly remembers that British cultural moment – but his 25-year-old daughter has no memory of it. This new generation needs something else to consider when thinking about their products.
But the importance of brand identity for now is closely tied to the response to the war in Ukraine. “There’s a really fundamental lesson – make sure you’re building a brand that stands for something and recruiting people because they believe in their brand. We have to do that.