Linda Himelstein's book explains how Pyotr Smirnov went from serf to the tsar's vodka man, and how the vodka managed to go global
The King of Vodka:
The Story of Pyotr Smirnov
and the Upheaval of an Empire
By Linda Himelstein
HarperCollins; 384 pp.; $29.99
A man comes from the dust and in the dust he will end—and in the meantime, it is good to drink a sip of vodka. With this old Russian proverb, author Linda Himelstein opens her captivating business history, The King of Vodka: The Story of Pyotr Smirnov and the Upheaval of an Empire. Himelstein, a former BusinessWeek staffer, has produced a deeply researched book on the founder of Smirnoff, the world's No. 1 vodka, now owned by British spirits giant Diageo (DEO). (Disclosure: I knew Himelstein when she was a BusinessWeek editor in the 1990s, but we never worked closely together.) Himelstein draws on more than 500 documents from archives in Russia and the U.S., 19th century newspapers, scores of books, and interviews with experts and descendants of Pyotr Smirnov. The narrative she weaves follows Smirnov from his boyhood as a serf in a farming village 170 miles from Moscow to his death in 1898 as one of Russia's richest men, with a fortune worth more than $130 million. As Himelstein understates it, he was "arguably the most famous vodka maker in the world."
In tracing the man's rise, the author also conveys how Russian capitalism lurched into being. Smirnov's story is one of fierce entrepreneurial spirit and determination. He was also a consummate opportunist, capitalizing on reforms launched by Tsar Alexander II. These include the freeing of the serfs in 1861 and the subsequent liberalization of the economy, which kicked off Russia's boom in the 1880s and 1890s and paved the way for a generation of titans in textiles, banking, oil, and other areas.
Although uneducated, Smirnov proved to be a marketing genius. When he began making vodka, in 1864, branding was a murky concept. (Russia didn't offer trademark protection until 1896.) Yet Smirnov knew he wanted his vodka to become the country's most prestigious. He developed his own recipes with the purest ingredients he could find and came up with a novel way to drum up demand. In one of Moscow's poorest neighborhoods, Smirnov rounded up panhandlers and brought them to his home for food and drink. Then he paid them to fan out and "demand Smirnov vodka" at Moscow's watering holes. Soon sales were booming.
Within eight years, Smirnov was grossing 600,000 rubles annually, almost $7 million in today's dollars, Himelstein estimates. To burnish his image, Smirnov became a prominent member of the Russian Orthodox Church and a philanthropist. It was all part of his lifelong and ultimately successful effort to become official vodka purveyor to the tsar, a title he gained in 1886.
The King of Vodka sets Smirnov's family story against the backdrop of tumultuous events unfolding in Russia. Himelstein chronicles the rise of labor unrest and revolutionary fervor in the late 19th century. While Smirnov never faced a strike at his factory—he treated workers well, in relative terms—his business was threatened by an anti-alcohol campaign led by Leo Tolstoy and Anton Chekhov, who believed vodka was destroying the nation. The tsarist government seized control of vodka production in Moscow in 1901, dealing a massive blow to the business. After the revolution, the Bolsheviks nationalized the company and targeted known capitalists such as Smirnov's son, Vladimir, who narrowly escaped the country. Thanks to him, the vodka empire lived on outside Russia. Smirnoff vodka (with the French spelling) was registered in Europe in the 1920s and later produced in the U.S., becoming a best seller on both sides of the Atlantic.
Himelstein's book reminds us how unstable success can be in Russia, even today. Just as Smirnov's family lost spectacular wealth after the revolution, so too did many of the tycoons who grew rich in the 1990s—and the state capitalists who have thrived under Vladimir Putin may end up joining them. But the book's real strength is its account of the amazing perseverance of the Smirnovs, whose business survived war and revolution. The King of Vodka brings the Smirnov tale into the present: Pyotr's great-great-grandson, Boris Smirnov, re-registered his family's trademark in Russia. Diageo fought him and eventually won. Boris Smirnov, of course, is contesting the decision.