What an impressive list of achievements. The world’s most fashionable and versatile spirit. A truly pioneering category with an amazing level of innovation and specialisation, spanning production and design. A comprehensive category that offers a range of choice, including various flavoured styles. And what’s more, vodka has travelled this distance in a relatively short period, only beginning to develop its current profile in the 1990s. But having achieved so much, where does the category go from here? 

One long-standing trend that will undoubtedly continue is the phenomenal rate of launches, whether the aim is to become a niche brand and enjoy cult status, or to achieve super-stardom on the mainstream circuit.  

“There are very low barriers to entry so the competition can come out of anywhere, anytime, very fast, so it’s a very dynamic and advancing category,” says Carmen d’Ascendis, managing director, vodka, Brown-Forman.

Two key destinations for all brands are the UK, the most mature market in Europe, and the US, which has the world’s biggest imported vodka sector. Moreover, success in the UK is a great launch pad for further success in the US, and vice-versa (not to mention numerous other markets). 

“Vodka continues to grow in the US with constant innovation and a breadth of choice at various price points. The US is also far more developed than the UK, which still has a lot of potential as super-premium and ultra-premium have not developed in the UK and Europe as much as in the US, so there’s a huge opportunity for premiumisation,” says Edward Pilkington, global category director for vodka, rum and gin at Diageo.

Meanwhile, various emerging markets in South America include Brazil. Having an established spirits and cocktail culture provided a head start in Brazil, with aspirational consumers ready to buy into global brands. 

“Brazil has been on a journey for quite some time and is now a significant-sized market with huge potential to keep growing. A lot more brands have entered the category, and it’s now moving from value to more prestige brands. Mexico also has a decent-sized vodka business with an opportunity to grow further and, while still quite small, we have also seen markets such as Argentina and Chile grow over the past three to four years,” says Pilkington.

Meanwhile, China is another focal point, with significant developments in the on-trade providing further prospects.  

“Most bars in China are bottle bars, but shot bars/cocktail bars are now beginning to emerge, and that’s when unaged spirits really start to take off, as shot bars/cocktail bars are more accessible to consumers on a lower budget than bottle bars. Additionally, Chinese bartenders increasingly go to Europe, London or New York to see what’s happening then take those ideas back with them and create a buzz that they’re more cosmopolitan than the competition,” says d’Ascendis.

There are also plenty of other emerging markets to consider.

“South Africa is the biggest vodka market in Africa and we are seeing good growth there. In the rest of Africa there is a lot of local spirit consumption so there’s a good opportunity to trade people up from local spirits, and a lot of this will be done through driving mixability,” says Pilkington.

Mixability is also being driven by flavoured vodka, as numerous bartenders are spending far more time experimenting with flavoured styles. The category includes a growing choice of flavours, as well as more brands offering their own versions of a particular flavour. 

The choice for brand owners is whether to launch a familiar flavour, or something more innovative. A familiar flavour has the advantage of greater acceptability among consumers and potentially higher sales volume, though this also means entering a far more crowded and competitive arena. Alternatively, launching an innovative flavour may require more explaining and offer lower potential sales, but this can also provide an effective talking point and a clear point of difference.

Moreover, a ‘unique’ example of a particular flavour is unlikely to retain this status for long. But does that matter? As soon as there’s more than one example of a particular flavour it’s the beginning of a discussion, and this naturally raises the question: Which do you prefer and why? 

“Competition can be good, as this starts to establish a particular flavour, and moves it on from a fad to a trend to a mainstay,” says Carmen d’Ascendis.

The flavoured sector also has an additional significance as, for some consumers, flavoured vodka is their entry point into the category, and the broader the choice of flavours then potentially the greater the recruitment effect. 

Another consideration is that consumers are more likely to sip a flavoured vodka neat, compared to an ‘unflavoured’ vodka. 

As the vast majority of vodka is consumed mixed, this is a great opportunity for a brand to showcase its character and quality. While sipping neat vodka is at an early stage (in western markets), and still only accounts for a tiny fraction of overall consumption, it is a growing trend. Sipping neat vodka is also a way for consumers to differentiate themselves from the rest of the cocktail crowd.

“Drinking vodka on the rocks is increasingly considered cool and sophisticated, and a lot of consumers are surprised they enjoy it. There’s a sense of discovery with sip and savour, and bartenders are pushing it,” says Claire Smith, head of spirit creation & mixology, Belvedere. 

Meanwhile, vodka is still synonymous with cocktails. As the most versatile spirit, vodka has the widest repertoire of cocktails and continues to inspire a significant number of new cocktails. Consequently, vodka has benefitted more than any other spirit from the current cocktail revival in the UK and US. 

Cocktails have been going in and out of fashion every decade. However, the latest cocktail revival looks as though it’s going to be the last, in the sense that cocktails are now here to stay, established as an essential element of contemporary lifestyle. 

And, as cocktail culture continues to thrive in the US and UK, also developing across Europe and Scandinavia, the prospects for vodka have never looked better.

“The craft cocktail movement has exploded and there’s been an overall elevation of cocktail culture from something that was only done in some of the top bars/restaurants in big cities to places which are more mainstream. 

“As a result, the average bar-goer is expecting more from their cocktail lists and bartenders are able to use new, well-crafted flavours as a ‘tool’ to take a gastronomic approach to cocktail creation,” says Joe McCanta, Grey Goose global ambassador.

As cocktail culture is continually evolving, this also means cocktail trends can have a significant effect on the category. One trend developing over the past few years in the UK and US is a return to classic cocktails. Apart from their status as classics, an additional advantage classic cocktails provide is having a great story, or, more usually, a number of stories, as it’s rare to have definitive evidence stating who, where and when a particular cocktail was created. And great stories are, of course, an effective way of engaging consumers. 

Key among classic cocktails is the Dry Martini. Currently this is far more established in the US compared to the UK and other markets. But that can also mean it has great potential, particularly as the Dry Martini has an amazing status as the ultimate cocktail. 

The key question has been which vodka to use in a Dry Martini, which is a great starting point for a vodka dialogue between a bartender and a customer. But it’s not the only question when ordering this cocktail.    

“The range of vermouths has really grown recently, and matching vermouth to vodka has become a real talking point among bartenders, which is helping to drive interest in the Dry Martini,” says Smith.

   Another recent phenomenon is the growing number of limited editions, whether it’s special packaging or a line extension. And a growing appetite for rarity, among bartenders and aspirational consumers, ensures an ongoing demand for limited editions. 

“Limited editions are an important way to express ourselves, and allow us to specifically target a consumer or trade group. 

“We have a long history of geographical limited editions around the world and over the years we have launched more than 50 limited editions excluding flavours, global initiatives such as Absolut Unique, local city series such as Absolut Moscow and artist collaborations such as Absolut Vodka Blank Edition by Dave Kinsey. This approach enables us to focus on a particular market and collaborate with a local artist who designs the bottle,” says Paul Duffy, chairman and CEO, The Absolut Company.  

The launch of limited-editions provides a series of highlights in the vodka calendar, while also creating a sense of ‘buy now, or regret at leisure.’ Moreover, the launch of each limited edition is followed by a sense of anticipation: what’s coming next and when? 

“I expect more limited editions will come on to the market – it’s a proven success model, it works commercially and gives you a great PR opportunity, but a limited-edition must say something about your brand equity,” says Belvedere’s Smith.

What brands communicate is a vital factor in attracting new recruits and subsequently maintaining their loyalty. And that depends on telling consumers what they want to know and what they’re most going to respond to.

“Lifestyle messages sit alongside functional messages, we can’t just do one and we support both. One of our primary communications is about the artistic community and how we collaborate with artists,” says Duffy.

Meanwhile, with an extensive selection of vodkas available in key markets such as the UK and US, the obvious question for consumers is: Which brand should I choose and why? And one key aspect of every brand’s identity is the country of origin.

“You’ve got to be able to help consumers navigate the category and there are few clear designators in vodka. One is the price, another is the country of origin. We’re keen to tell the story of our one-source policy, using grain and water exclusively from the Åhus region of  Sweden. It’s a great story and an important indicator of quality,” says Duffy.

Country of origin automatically links to the ingredients, with vodkas distilled from a range that includes wheat, rye, and barley. Each ingredient also provides a natural opportunity to go into more detail, such as the cultivation cycle. 

“Brands across the spectrum are talking about ingredients in a way they haven’t done before, and I think ingredients will be a key marketing message over the next couple of years. This is a great way for brands to explain themselves to consumers, who engage readily with this message as it’s much easier to grasp than the complexities of distillation,” says Matthew Du Cann, founder of Westbourne Consultants, a leading spirit brand development company. 

A related aspect is how each ingredient influences the flavour of the resulting vodka. The choice of wheat vodkas is currently the largest, followed by rye, with, for example, far fewer barley vodkas on the circuit.

“What else needs definition is how does a wheat vodka compare to a rye vodka, for example, as this would enable consumers to make a more informed choice,” adds Du Cann.   

Additionally, production messages continue to play a vital role, as they have done for several years. And, with so many brands telling their production story, there’s no shortage of reading material. 

“Consumers really want to know about a brand’s provenance, how it’s made, and who makes it. We’re being asked this far more than last year and 10 times more than two years ago, and the more brands that can answer these questions the better it will be. Bartenders are also driving this, empowering the consumer with different bits of knowledge, while social media and smart phones have also changed the way consumers get product information,” says Sam Galsworthy, founder, Sipsmith.