The vodka category is flourishing these days, and the burgeoning lineup of new fruit-flavored products is one of the main elements contributing to the category’s growth. Nationally, vodka gained 1.3 million 9-liter cases in 2002, growing about 3.5%, according to Adams Handbook Advance 2003. Growth in the control states was a little stronger at 3.9%, adding nearly 360,000 cases to the category, or nearly a third of the gain nationwide.
“I think flavors are here to stay,” said Joanne Kletecka, group marketing director at Allied-Domecq, which imports the Stolichnaya family of vodka. “Consumers are still enjoying them. The challenge is to stay ahead of the curve with flavors consumers want and that are very mixable.”
Consumers have shown a willingness to experiment with flavors for some time. The generation of drinkers that has entered the category in the past decade grew up exposed to a wide variety of flavors in all sorts of food categories, including an explosion of choices in beverages. Due to its versatility and mixability, vodka gives consumers more choices.
“There’s been a continued explosion in white goods,” said Kathleen DiBenedetto, group product director, Jim Beam Brands, importer of Vox vodka, “not just in vodka, but tequilas and rums, too. Flavors also are growing. Consumers are interested in trying more unique cocktails that reflect who they are.”
Indeed, the re-emergence of classic cocktails during the past decade is another significant factor driving sales of vodka. “It’s fashionable to have a Martini glass in your hand,” said Bill Eldien, president of Nolet Spirits USA, importer of Ketel One vodka.
Finally, premium products continue to gain ground across all product categories as more consumers “treat” themselves to luxuries. Even when money’s tight, people will spend their hard-earned cash on relatively inexpensive luxuries like spirits (versus cars) because of the image these brands project.
“It’s the Americanization of luxury,” said Lisa Pope, director of marketing at Millennium Imports, which imports Belvedere and Chopin vodka. “People are picking a few things in their lives to trade up to and treating themselves.”
“People are becoming empowered with spirits,” DiBenedetto said. “The high end is growing because people are more knowledgeable. Consumers are just beginning to understand where they can go with their choices.”
Vodka Chic
Vodka now accounts for more than 25% of all spirits consumed in the U.S., and shows no signs of slowing its growth. Its versatility and steadily improving image have made it a favorite among a wide variety of consumers.
“When consumers look to experiment with spirits, vodka is a very mixable, very versatile base,” said Guillaume Cuvelier, managing director of Spirits Marque One, importer of Svedka. “That, along with 25 years of image enhancing that Absolut has done, has helped vodka become very fashionable.”
The category continues to be helped tremendously by the growth of flavored vodkas and superpremium brands. “Flavored vodkas have seen a 30% growth in sales over the last three years,” said Sharon Lichten, Smirnoff Vodka brand director at Diageo. “Smirnoff Twist is the leader in flavored vodkas with upwards of 35% of the market last year.”
Smirnoff recently added Green Apple to its line of Smirnoff Twist flavors.
Smirnoff added a fifth Twist flavor — Green Apple — to its lineup recently, and has plans to introduce additional flavors this year. Due largely to its portfolio of flavored product, the Smirnoff brand saw sales increase about 11.1% last year in control states, even better than the healthy 7.6% growth posted nationally.
Absolut just launched Vanilia, its newest flavored vodka since the successful Mandrin.
Absolut, still the second-largest selling brand in the category and the leading import, saw flat sales last year in control states after a decline in 2001. Nationally, the brand saw a volume increase of 2.2% in 2002. Now that the brand has acclimated to its shift from Seagram Americas to Future Brands (for distribution) and Absolut Spirits (for marketing), activity on the brand is the highest in years.
Absolut recently introduced Vanilia, its first new flavor since Mandrin in 1999, supported with a four-phase ad campaign. First came trade ads, then a punch-out bottle, “Absolut Extract,” in consumer magazines. Next, Vanilia was merged into the Absolut family, and now ads show consumers how to drink it, with recipes and ideas for mixers.
This summer, in addition to a series of promotions with other Future Brands products, Absolut will merchandise “Absolut Essence,” a mini-refrigerator replica with customized space for an Absolut bottle and two Martini glasses.
McCormick has had good success with its lineup of flavored vodkas.
McCormick Vodka, the second largest domestic vodka and third in the overall category nationally, also is taking advantage of the trend. It recently introduced additional flavors and now has five in the line — apple, raspberry, orange, peach and vanilla. Recognizing consumers’ demands, the company has made an effort to raise their perceptions of the product. The package was redesigned a few years ago, and this year for the first time is advertising the brand to both the trade and consumers with the theme “premium doesn’t have to be expensive.”
“Our feeling is that people will continue to drink better, but also smarter,” said Vic Morrison, vice president of marketing for McCormick.
Stoli Cranberi and Stoli Citros are the latest offerings in the Stoli flavored vodka lineup.
Stolichnaya, the first vodka to introduce flavors, has two new flavors being introduced in June, Stoli Cranberi and Stoli Citros (which will replace lemon). The new cranberry- and citrus-flavored line extensions join the existing Stoli flavored vodkas of Ohranj, Strasberi (strawberry), Razberi, Vanil and Persik (peach).
Stoli isn’t neglecting its base business, however. Now well-established at Allied-Domecq, the brand saw sales increase about 11.5% in control states in 2002. Again, that growth was even stronger than the 10.4% the brand achieved nationally.
Stoli will have stand-alone promotions for the core brand, and likely some new directions in advertising from recently appointed agency Hal Riney.
Skyy has just introduced Berry, Vanilla and Spiced flavored vodkas.
Skyy continues to see sales grow far in excess of the category, up 19.5% last year in control states and 15.1% nationally. Three new flavors were introduced in April. Berry (a combination of raspberry, blackberry and blueberry), Vanilla and Spiced join Citrus and regular Skyy. All now come in redesigned packaging, a slightly taller, slimmer blue bottle with pressure-sensitive acetate label and metalized cap to give the brand a more sophisticated look.
Skyy’s provocative film and entertainment ad campaign takes on a new twist this month. New ads feature real movie stars, all hot properties appealing to the brand’s target consumer. The first five to appear are Heather Graham, Kyle McLachlin, John Leguizamo, Gretchen Moll and Taye Diggs.
Burnett’s Vodka, from Heaven Hill Distilleries, has launched six flavors over the past year.
Burnett’s Vodka, from Heaven Hill Distilleries, saw sales increase in the control states by 2.4% last year, due in part to the six flavors it has introduced in the past year or so.
Burnett’s summer program is “Sip the summer away,” supported by a full range of p-o-s materials (often as a co-promotion with Burnett’s Gin). New this year is a web site with more recipes, a beach towel that retailers can use on displays (and consumers can win on the web site), and an on-pack offer.
Instead of the brand’s traditional tie-in with ReaLemon and ReaLime, Burnett’s will be featuring 50 ml samples of either Whalers Vanille rum or Burnett’s Raspberry vodka depending on the market.
Ketel One, which saw sales increase 10.6% last year, is sticking with Citroen, its citrus flavor, for the time being. The flavored product grew 50% last year, so the brand is comfortable not expanding into other flavors yet. Instead, it is promoting a summer drink campaign with recipe books and great p-o-s.
Sales of Grey Goose have grown significantly, especially with the L’Orange and Le Citron flavored varieties.
Grey Goose, from Sidney Frank Importing, was up 67% to more than 1 million cases last year, partly on the strength of L’Orange, as well as the addition its lemon-flavored line extension Le Citron. The high-end imported vodka from France has seen phenomenal growth over the past few years, and continues its successful marketing activities. A recent example is the brand’s partnership with The Golf Channel. “The Grey Goose 19th Hole” show is a half-hour roundtable sports program that highlights the sport, its stars and the latest issues surrounding golf. The brand is also sponsoring The Golf Channel’s coverage of this year’s British Open and European Tour.
Coming in June are Svedka’s three new flavors: Vanilla, Clementine and Raspberry.
Svedka Vodka, which has quickly grown to an impressive 200,000 cases, is introducing three new flavors — clementine, vanilla and raspberry — in June. The brand’s “Try Something Swedish Tonight” marketing campaign, which features a pair of scantily clad but strategically covered blondes, has successfully resonated with male consumers.
The Finlandia brand can look forward to increased marketing activity in the coming months.
For its part, Finlandia added Cranberry last year to join Lime. This year it is changing Cranberry to a white cranberry and improving the flavor. The brand saw slower growth last year, but importer Brown-Forman has renewed its support, purchasing a larger ownership stake and increasing spending on both media and new p-o-s this summer.
Three Olives Vodka recently launched raspberry, cherry and vanilla flavors.
Even small brands are taking advantage of the flavor craze. Van Gogh vodka has six flavors. Three Olives vodka, from White Rock Distilleries, features cherry, vanilla and raspberry.
Upscale Is Up
Not everyone is jumping on the flavor bandwagon, however. Some of the luxury brands are opting to stick with image and quality of the product itself as the driving forces behind their brands.
“I think the flavored category is terrific,” said Steve Gill, president of Millennium Imports. “It’s big and here to stay. We haven’t looked at it for our brands — we don’t see a fit — but we think it’s done a lot to bring consumers into the category, which ultimately will help us.”
The high-end Belvedere and Chopin vodkas, from Millennium Imports, have been growing rapidly.
Brands like Belvedere and Chopin, however, are part of another growing segment of the category — ultra-premiums. Belvedere was up 7.7% nationally last year to 350,000 cases on the strength of the product and programs that align it with other high-profile names like its recent partnership with the Rhythm & Blues Foundation.
These smaller brands tend to rely more on word-of-mouth, though image advertising in key media help raise awareness. Vox, for example, uses a series of special events like its “Martini Weeks,” and the “Out” program for the gay market to encourage consumers in local markets to try the product. Vox also has put a team of 25 brand specialists on the street to coordinate programs for Vox and other high-end brands from Jim Beam in local markets.
Rain Vodka, from Sazerac, has a similar strategy, building relationships and doing guerilla marketing in key metro areas. A 1.75-liter bottle introduced last year and a new 50-ml trial size this summer are giving the brand more opportunities to reach consumers.
Thor’s Hammer, imported from Sweden by Barton Brands, has been more aggressive in its approach to marketing. In the past, the superpremium vodka has featured on-premise Viking Nights in dozens of markets across the country, as well as advertising in national media such as The Wall Street Journal and on the Howard Stern radio show.
