When the Doors Slammed Shut—and One Opened Faster
When Western sanctions closed European markets in February 2022, Russian wine producers faced existential crisis. Fanagoria tripled exports to China in Q1 2025—not gradually over three years, but in three months. Between the moment European doors slammed shut and China opened came the darkest question: can we survive this?
When Western sanctions closed European markets in February 2022, Russian wine producers faced existential crisis. Established export relationships severed overnight. Distribution networks collapsed. Premium positioning in Western markets—built over decades—evaporated. Industry analysts predicted years of contraction and domestic-only retreat.
Fanagoria tripled exports to China in Q1 2025.
Not gradually over three years. Not through cautious market testing. Three months: from negligible China presence to 800,000 bottles annually—3% of the winery’s entire 28.5 million bottle production redirected to a market that barely existed for them in 2021.
This is what strategic agility looks like when organizational flexibility meets crisis. But the pivot wasn’t smooth or inevitable. Between the moment European doors slammed shut and the moment China opened, Fanagoria leadership faced the darkest question any large-scale operation confronts: Can we survive this?
The Soviet Foundation That Enabled Speed
Fanagoria (Фанагория) wasn’t a startup improvising survival. Founded in 1957 during the Soviet era, it had grown into Russia’s third-largest winery with 28.5 million bottles annual production, 4,000+ hectares of vineyards, and infrastructure built across 68 years of continuous operation.
That scale created the foundation for rapid pivots. When China demanded proof of serious supply capacity—hundreds of thousands of bottles, not boutique allocations—Fanagoria could fulfill orders immediately. Smaller wineries might produce exceptional wine but lack the volume to interest large distributors or retail chains requiring consistent inventory. Fanagoria had both quality and scale.
The Soviet-era heritage meant something unexpected: organizational resilience. Companies born in planned economies learned to operate under dramatic external shocks—currency crises, regulatory upheavals, supply chain collapses that arrived without warning. Western companies optimize for stable environments and struggle when fundamental rules change overnight. Soviet-legacy businesses survived by assuming instability was normal, maintaining organizational flexibility that looked inefficient during calm periods but proved essential during crises.
Under CEO Petr Romanishin’s (Петр Романишин) 20-year tenure, Fanagoria had modernized production infrastructure while maintaining operational adaptability. Temperature-controlled fermentation, French oak aging programs, and quality control systems met international standards. They weren’t starting from zero trying to build export-quality wine—they’d been producing it for years, primarily for domestic consumption and limited European exports.
What they needed in 2022 wasn’t different wine. They needed different markets. Fast.
The production capacity existed. The quality standards existed. The organizational structure existed. What didn’t exist yet was distribution infrastructure in China—a market that required relationship building, cultural adaptation, and logistics coordination that typically took years to establish.
They had months. Maybe weeks.
February 2022: When Everything Stopped
The sanctions hit like a power grid failure—instant, total, cascading.
European importers who’d spent years building Russian wine portfolios canceled orders within days. Some cited sanctions compliance uncertainty. Others responded to anti-Russian consumer sentiment that made carrying Russian products politically toxic regardless of legal obligations. Distribution relationships built over decades dissolved in a single week.
For Fanagoria, the immediate impact was brutal. European exports had represented meaningful revenue—not majority share, but significant enough that their sudden elimination created cash flow pressure across the entire operation. Committed shipments sat in warehouses. Purchase orders became worthless paper. The premium pricing that European markets supported evaporated.
Worse than lost revenue was strategic vulnerability. Fanagoria’s positioning as an internationally recognized Russian producer depended on European market validation. Domestic-only wineries faced commodity pricing competition. International presence commanded premium positioning. Without European exports, Fanagoria risked sliding into domestic commodity status—competing on volume and price rather than quality and reputation.
The leadership team ran scenarios. Option 1: Retreat to domestic-only sales, accept lower margins, wait for geopolitical situation to normalize. Timeline: years, possibly never. Risk: lose international positioning permanently. Option 2: Expand other export markets fast enough to replace European revenue before cash reserves depleted. Timeline: months. Risk: fail completely if new markets don’t materialize.
Both options assumed organizational survival remained possible. That assumption wasn’t guaranteed.
Petr Romanishin had led Fanagoria for 20 years through various challenges, but nothing matched this combination of speed and severity. Currency volatility, he’d navigated. Domestic economic crises, he’d managed. Gradual market shifts, he’d adapted to. This wasn’t gradual. This was structural market elimination with no warning and no clear recovery path.
Internal meetings grew tense. Financial projections showed cash burn accelerating. Without European revenue, operational margins compressed dangerously. The winery employed hundreds of people across 4,000 hectares. Production cycles couldn’t pause while leadership debated strategy—grapes don’t wait for geopolitical resolution. Harvest 2022 was coming whether markets existed or not.
The fundamental question facing every person in those crisis meetings: Could Russia’s third-largest winery actually fail? Scale provided advantages during growth, but during contraction, scale magnified exposure. Small boutique wineries could survive on local restaurant relationships and direct-to-consumer sales. Fanagoria’s 28.5 million bottle production required distribution networks, wholesale partnerships, and export markets that suddenly didn’t exist.
The China opportunity wasn’t obvious—it was desperate. Chinese wine imports had been growing, but Russian wine held negligible market share. Chinese consumers associated premium wine with France, Italy, Chile, Australia—not Russia. Building brand recognition from zero in a market 4,000 miles away, speaking a different language, with different consumer preferences and distribution structures, while simultaneously managing sanctions-induced crisis at home… the probability of success looked slim.
But probability of success through domestic retreat looked worse. At least the China pivot offered a chance.
By March 2022, leadership made the bet: move East, move fast, move everything available toward the one market opportunity that hadn’t closed.
The question was whether they could move fast enough.
The 90-Day Blitz That Built Distribution
In early 2025—barely two years after the crisis decision—Russian wine producers organized coordinated trade missions to Beijing, Xi’an, and Chengdu. Fanagoria participated in all three simultaneously, a logistical undertaking that required shipping sample inventory across three cities, training sales staff in Chinese market preferences, and developing marketing materials translated and culturally adapted for Chinese buyers.
Most Western companies would spend six months planning one trade show. Fanagoria executed three at once while launching their Moscow flagship store and managing ongoing production operations.
The trade show strategy wasn’t just immediate sales—it was intelligence gathering and relationship building compressed into months instead of years. By participating in Beijing (political and economic capital), Xi’an (historic Silk Road terminus with cultural resonance), and Chengdu (rapidly growing inland city representing emerging middle-class wine consumption), Fanagoria mapped the entire Chinese wine distribution landscape in one quarter.
Each city revealed different buyer profiles. Beijing buyers focused on premium positioning and brand heritage for business entertainment and gifting. Xi’an buyers responded to Silk Road trade narratives connecting Russian wine to centuries of East-West exchange. Chengdu buyers prioritized value positioning for everyday premium consumption, less concerned with prestige signaling than Beijing counterparts.
Fanagoria adapted messaging for each market without compromising core brand identity. The wine stayed the same; the storytelling shifted to emphasize aspects that resonated locally. This is sophisticated market entry—understanding that identical products require different positioning frameworks across culturally distinct regions.
The trade shows accelerated trust building. Chinese distributors hesitate to commit to unfamiliar foreign suppliers without personal relationship development. Face-to-face presence at major industry events signaled serious long-term commitment rather than opportunistic one-off export attempts. Fanagoria’s three-city simultaneous participation communicated that Russian wine wasn’t treating China as fallback market—it was strategic priority worthy of sustained investment.
By Q1 2025, Fanagoria had established distribution relationships generating 800,000 bottles annual volume. The execution validated the crisis-era bet: move East, move fast, survive.
The Moscow Store That Signaled Confidence
In March 2025, Fanagoria opened Russia’s first branded wine retail store in Moscow—a move that seemed counterintuitive during export crisis but proved strategically essential.
Russian wine had always sold through standard retail: supermarkets, liquor stores, restaurants. Branded stores were for imported premium wines, not domestic production. The implicit message was that Russian wine wasn’t premium enough to justify dedicated retail experiences.
Fanagoria’s flagship rejected that assumption. The Moscow location provided full product range access, educational tastings, and brand immersion that standard retail couldn’t deliver. Customers engaged with Fanagoria’s story, learned about specific vineyards and winemaking techniques, and received personalized recommendations.
The strategic advantages were multiple. First, direct consumer feedback that wholesale distribution filters out—staff heard exactly what drove purchasing decisions and what barriers prevented sales. That intelligence flowed back to winemaking and marketing teams, creating tight feedback loops.
Second, premium brand positioning that third-party retail couldn’t establish. When Fanagoria controlled the retail environment, they controlled pricing presentation, product adjacencies, and staff expertise. Supermarket placement puts wine next to commodity products, inviting price comparison. Branded retail creates its own category where quality and experience justify premium pricing.
Third, the timing sent a signal: opening a flagship store while executing China expansion demonstrated that Eastern pivot didn’t mean abandoning domestic leadership. Fanagoria was playing offense on multiple fronts—expanding internationally while strengthening domestic positioning.
This is smart crisis response: the Moscow store generated revenue, provided market intelligence, strengthened brand positioning, and supported both domestic and international growth strategies. Single investment, multiple strategic benefits.
What the Numbers Actually Prove
Q1 2024 baseline: Minimal China exports, primarily domestic sales, European markets lost Q1 2025 reality: 800,000 bottles to China annually (700 tons, $1M quarterly value), 3% of total production reallocated, branded flagship store operational, three major Chinese trade shows completed
Russian wine industry transformation: China exports tripled industry-wide in Q1 2025—192% volume increase, 235% value increase year-over-year. China went from negligible to representing 72% of total Russian wine exports in under three years.
Fanagoria led that transformation not through superior wine quality alone—multiple Russian wineries produce excellent wine—but through organizational agility that enabled faster execution than competitors. While other wineries held crisis meetings debating whether China was viable, Fanagoria had already shipped container loads and established distributor relationships.
The crisis taught a lesson that stable market conditions obscure: execution speed matters more than perfect planning when external shocks create new opportunities. Companies with decision-making authority concentrated in hands willing to take calculated risks capture disproportionate gains. Companies requiring committee consensus and extended deliberation arrive too late.
For Fanagoria, the February 2022 crisis created the forcing function that drove transformation. Without sanctions closing European markets, management would have optimized existing channels rather than risk unproven markets. Crisis eliminated the safe option, leaving only the uncertain option.
The subsequent success validated organizational capabilities that had existed all along but never been tested. Soviet-era operational resilience, 68 years of continuous production experience, 20 years of professional management under Romanishin—all of that infrastructure was ready to execute when crisis demanded it.
What This Proves About Emerging Market Agility
For investors and partners evaluating founder-led businesses in emerging markets, Fanagoria offers a framework: look for companies with built scale (necessary for volume), operational excellence (necessary for quality), and organizational flexibility (necessary for speed). That combination is rare enough that when it exists, it creates competitive advantages persisting across market cycles.
The China pivot succeeded not because Fanagoria had superior strategy—multiple Russian wineries could have executed similar pivots—but because they moved first and fastest. First-mover advantages in new markets are enormous: early distribution relationships, initial brand recognition, retailer shelf space allocation. Later entrants fight for scraps or pay premiums to break in.
This is true across industries and geographies: when external shocks create new market opportunities, the window stays open briefly. Organizations with agility capture disproportionate gains. Organizations requiring extended planning cycles miss the opportunity entirely.
For succession-planning founders, Fanagoria demonstrates that built infrastructure provides crisis resilience. The 68 years of continuous operation, the 4,000 hectares of established vineyards, the 28.5 million bottle production capacity—none of that was sexy startup innovation. But when crisis hit, that boring operational excellence enabled survival and subsequent growth that more exciting ventures couldn’t match.
For diaspora investors seeking BRICS market opportunities, Fanagoria proves that the best investments aren’t always the newest or fastest-growing companies. Sometimes they’re the Soviet-era industrial operations that look outdated until crisis reveals their organizational resilience and execution capacity.
The question, as always, is: what else exists in emerging markets that’s moving this fast while international analysts are still writing reports about why it can’t be done?