Mongolian Beverage and Booze Business

I went to Mongolia at the invitation of the APU Company and at the suggestion of James Espey who works with them. The purpose of the visit was to provide marketing training.

APU is the biggest alcohol and beverage company on the Mongolian Stock exchange. In the marketplace, they are the dominant factor in vodka and beer – certainly in volume and, in my view, in terms of product quality as well. (The vodkas are the best I’ve ever tasted and the beers were equally outstanding.)

The company was established in 1924 as a state monopoly (with Soviet influence), became a joint stock company partly owned by the state and partly private in 1992 and today is totally privately owned and a top player. You’d think that such a market leader would rest on its laurels. No way.

In some respects it reminded me of Seagram before the show businesses crazies and greed set in. The people in marketing and sales are arguably the best in the Mongolian business and still continue to strive for excellence without arrogance. The production operation is top notch – I have never seen a plant and manufacturing facility so state-of-the-art. While I was there they had just received their ISO Certificate of Quality for soft drink and beer production. So, add world class to the mix.

Other similarities included concerns about social responsibility, customer service, debates about brand spending as a cost or investment, marketing and sales issues, and many other things the Seagram alumni will readily recall.

I found it interesting that governmental concern (and hypocrisy) about alcohol consumption is universal. In the US, prohibition failed because the government needed the tax and …

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Impressions of Mongolia — Part Two

Mongolia map

The flight to Ulaanbaatar (or Ulan Bator or UB) from New York is long and tiring and even business class only partly eases the burden. But, for this experience, it was well worth the effort.

Stepping out of the airport and into Mongolia for the first time, there were a number of prominent impressions. First, it’s cold. It’s November 13th and it’s already below zero. I could care less if it’s Celsius or Fahrenheit it’s cold! Oddly enough, by the end of the week I’m used to it. I also came to realize that people who can endure such weather extremes can also endure whatever life and history throws at them.

Second, the pollution is strong. No worse than major eastern European, South American or Asian cities but somehow different. There is an odor I can’t identify that I later learn is from coal. The city has a very large ger district where the residents use coal for heat. (A ger is a felt-lined tent covered in durable, waterproof, white canvas. While modern and expensive homes are being built in UB, many rural Mongolians have retained their traditional lifestyle, of which the ger is an integral part.) The situation is not helped by UB’s topography – it’s almost completely surrounded by low mountains that trap the air until a strong wind can blow it away. Kind of like Los Angeles.

The third impression that starts as soon as I land is about the people. While waiting for my luggage I look around and realize that I could be anywhere in the world. There are lots of westerners (British, Canadians, Americans, Germans) some coming home and many here on business. …

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Mongolian Awakens – Part One

As mentioned in my last post, I was in Mongolia for a week consulting with the largest beverage company there and this will be the first of a number of blogs on the country and my travels.

How and why I got there will be the subject of a future post. For now, I’d like to provide some first impressions. Particularly since most people have only a vague and hazy image of Mongolia. Myself included, before I went there.

Why bother you, you ask. Because, in my view, despite its size and only a few decades of free market economics, the country will take it’s place among the most important emerging nations in the world. As a colleague who has been there observed, “They should put up a billboard over the country saying, ‘watch this space.’”

I like to think of the Mongolia as a “sleeping beauty.” Put to sleep by an evil empire for 70 years and whose recent awakening foreshadows a strong new beginning.

When one thinks of Mongolia, chances are that the first thing that comes to mind is the Mongol Empire and “Genghis” Khan. (In fact it’s pronounced Chinggis; Arabs could not pronounce the ch sound and that’s how it became a g sound.). By the way, the Mongol Empire had the largest contiguous land empire in history, 22% of the Earth’s total land area.

This small country that once ruled much of the world became the Mongolian People’s Republic in 1924 and was subjected to Soviet rule. Suddenly in 1991, with the collapse of the evil empire, Mongolia was on its own. What followed was roughly a decade of restructuring, embrace of free market economics …

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