Russian Standard Vodka's Billionaire Owner Takes on Diageo

For years, Russian Standard has marketed its namesake product with the tagline “vodka as it should be.” To the company’s owner, billionaire Roustam Tariko, that long meant Russian, unflavored, and exclusive. But Tariko in recent years decided that focusing solely on a premium line has its limits. “Today, to compete with big giants like Diageo and Pernod Ricard, you really need to compete in every segment of the market,” he says.

So since 2011 he’s plunked down $1.1 billion in cash and assumed debt to gain control of Polish spirits maker Central European Distribution (CEDC), finally buying it out of bankruptcy last year. The deal gives Tariko’s company Zubrówka, an herby Polish vodka flavored with bison grass, as well as the cheaper Green Mark vodka, a Russian brand that sells for about $15 a bottle in the U.S. The expanded portfolio catapults Tariko’s operation over Absolut owner Pernod into the global No. 2 spot among vodka makers by volume, trailing only Diageo. Tariko is giving himself three years to top Diageo, which owns Smirnoff, Ketel One, and Cîroc.