Vodka in the US: Architect of Change

Vodka really is the chameleon of the spirits world. Lucy Britner uncovers its many guises

It’s easy to ignore vodka. You put it with cola and you taste cola. You put it with orange and you taste, well, you get the idea. If you’re an elite bar, you’re probably more excited about gin when it comes to white spirits for classic cocktails. Some bars even famously (well, famous within the industry) shun the drink altogether. Top New York bar Death & Co doesn’t mention vodka on its menu. But if you’ve made the effort to find out about the place and pay it a visit, chances are vodka is at the back of your mind. 

Then there are the flavours – in the UK we have enjoyed laughing at the totally weird concepts coming out of the US. That is until a few started launching here, too, though the trend hasn’t yet taken off like it did Stateside. This is possibly because many dessert-flavoured vodka drinks are a lower abv than the good old EU allows for vodka (37.5%). 

Laugh though we might, producers have been laughing all the way to the bank. According to the 2013 Liquor Handbook Vodka Edition, flavoured brand extensions are estimated to have had nearly a 30% share of total volume in 2012. 

And what’s total volume, you might ask… it’s a mind-boggling 70 million nine-litre cases. That’s 34% of the overall spirits market in the US and more than 10% larger than the entire whisk(e)y category, imported and domestic, which has a 23.2% market share. (All numbers from the 2013 Liquor Handbook Vodka Edition). 

Kathleen Schuart, senior marketing director at Skyy vodka, which is owned by Italy-based Campari, says: “One in three drinks in the US is a vodka-based drink, making it the Goliath of the industry and we don’t see interest in this highly appealing spirit waning.”

Did we mention this is the 17th consecutive year of growth for recession-proof, trend-proof, future-proof vodka? Not so easy to ignore now, is it? 

Perhaps trend-proof is a little misleading. The category’s knack for adapting to new trends has made it the chameleon of the drinks world – and those little lizards have been around for millions of years. 

According to stats bible the Liquor Handbook, 171 new vodkas were introduced in 2012 and 122 of them were flavoured. That’s a new release just less than once every two days. Or a flavoured launch once every three days – no wonder the concepts keep getting more and more bizarre. 

Growth is not restricted to domestic brands, either. Both imports and domestics grew around the 5% mark with Smirnoff, which counts as a domestic product, reaching 9.85m cases (Liquor Handbook). That’s a significant chunk of the Diageo brand’s 25.8m cases (Millionaires 2013). Topping the imports is rival Pernod Ricard’s Absolut with 4.67m cases. This 2% growth sees the brand almost back to where it was in 2008, though it’s still shy of 2007’s 5 million cases. That it grew at all in 2012 is testament to Pernod’s faith in its strategy – the company upped the price of the drink last year.

Maxime Kouchnir, vice president, vodkas, Pernod Ricard USA says: “Last year we started increasing our price on Absolut because we feel the time is right from a consumer’s perspective as they are displaying an increased willingness to pay more for strong brands. 

“We are building Absolut for the long term and we believe premiumisation is the way to go as long as you have a strong equity and keep building it for consumers and trade. Unfortunately, this is not the view of some players in the market but, despite this, we are experiencing good momentum in both on and off-premise.” 

The brand has strong links to bartenders and you can read more about its on-premise activity once we’ve got the numbers out of the way. 

The next biggest domestic brand is Campari America’s Skyy, which is dwarfed by Smirnoff’s presence at just 2.8m cases – though it has seen consecutive growth for at least the past five years (Liquor Handbook). 

Diageo’s Cîroc and Tito’s Handmade Vodka are winners in the rapid growth stakes, up 45.3% and 46% respectively during 2012. And Diageo is looking to build on this growth with the launch of Cîroc Amaretto, which rolled out in August. The cherry-almond flavour infused vodka also includes a touch of vanilla and the company claims it is the first amaretto flavour infused vodka. Of course, rap star Sean ‘Diddy’ Combs was involved with the development, claiming: “Anyone who knows me knows that I love to innovate, whether it’s to do something no one else has done before, or take something everyone knows and completely reinvent it. “I am excited to introduce the world to our newest creation.”

The question is, what’s next? Well the chameleon has already adapted to its new environment and it’s looking a bit slimmer – and a lot more like a wine drinker. That’s right, according to the Liquor Handbook, one of the next big trends is low-calorie vodka. Beam is poised with its Skinnygirl brand and earlier this year it launched a White Cherry vodka. Meanwhile, Diageo’s Smirnoff launched three sorbet-inspired tipples. 

“Smirnoff Sorbet Light is the next flavour experience for those women who strive to lead a balanced lifestyle, but never at the expense of delicious cocktails,” according to brand manager Sandhya Padmanabhan. This new line is 78 calories per 1.5oz – compared to 96 calories for 1.5oz of regular 80 proof vodka. It’s worth noting, though, that the Smirnoff Sorbet Light vodkas are only 60 proof.

Pop star Fergie has also launched a lower-calorie vodka called Voli, which enjoyed triple-digit growth to 53,000 cases during its second year on the market (Liquor Handbook). Meanwhile, Brown-Forman’s Little Black Dress vodka sold 35,000 cases during its first year.  

Category drivers

Let’s take a closer look at what other brands are doing to drive the category forward. For Beam and its Pinnacle brand, “nostalgic flavour options” are all the rage.  “Our latest innovations include Pinnacle Rainbow Sherbet, Pinnacle Strawberry Shortcake, Pinnacle Pecan Pie and Pinnacle Caramel Apple,” says Jason Dolenga, senior brand director for vodka at Beam. 

“We expect the vodka market will continue to grow in 2014 with flavoured vodkas as the driving  force behind this growth.  Pinnacle Vodka will continue to change what consumers expect from vodka through the delivery of innovative flavors and plans to introduce several additions to the portfolio in 2014.”

For Campari and Absolut, there are grape expectations. Sorry. 

In May, under the Skyy Infusions brand, Campari launched Moscato Grape, capitalising on the popularity the variety has been enjoying in the wine world. Incidentally, Beam also launched a Moscato wine under the Skinnygirl brand this year, but that’s for a different article. Campari’s Schuart describes Skyy Infusions Moscato Grape as the company’s “most successful new flavour yet”.  

She adds: “It captures a broad demographic of consumers with a complex yet approachable taste profile of Moscato by infusing vodka with sweet, luscious Moscato grapes. We found a way to capture that beloved flavour of Moscato, which is currently the hottest wine variety in the US, and make it perfect for cocktails that can be enjoyed in bars and nightclubs, or in easy-to-make drinks at home.”

Moscato madness

Earlier this year at London Wine Fair, Mintel analyst Jonny Forsyth claimed ‘Moscato madness’ in the US has led to a 33% increase in Moscato volumes. 

For Absolut, Sauvignon Blanc is the grape of choice and Absolut Tune took the US vodka scene by storm. For a start it’s wine-flavoured. Second, it’s sparkling. Now the US – and indeed the rest of the world – is no stranger to a new edition of Absolut but this one is really ‘out there’. 

Last month [September], the company announced a campaign with Swedish pop sensation Icona Pop. The nationwide roll-out of Absolut Tune coincided with the launch of a new ‘tune’ from the pop outfit’s forthcoming album. 

Kouchnir says of the partnership: “We’re excited to join forces with Icona Pop to nationally introduce Absolut Tune. “This blend allows us to experiment with new tastes and trends while offering consumers another delicious drink option, perfect for any celebratory occasion.”

Using pop stars to connect with consumers is great but, according to the Bureau of Labor Statistics, there are approximately 550,000 bartenders in the US – and the overwhelming majority don’t share Death & Co’s approach to vodka.  

Absolut has been reaching out in several different ways – Absolut Stuga, which was launched 18 months ago, is an immersive two-day experiential event in six US markets that brought Sweden to the US. The company also runs the Best Bloody Mary in America contest, which is now in its third year. 

“We just finished collecting bartender submissions, and received more than 1,400 unique Absolut Bloody Recipes from across the country… The top eight recipes that garner the most votes online will earn a spot as finalists and will compete at the New York City Wine & Food Festival this month,” says  Kouchnir. 

Bartenders can also use vodka created specifically for them through Absolut Craft – a partnership with Nick Strangeway that allows the top bartender to develop new expressions. The first, Herbaceous Lemon, launched last year and was made available to “select bartenders in a handful of cities”. The company is now in the process of rolling out the second expression, Smokey Tea.

“We’ve been using industry events such as Tales of the Cocktail and Portland Cocktail Week to introduce these flavours to the bartending community. People are absolutely floored when they taste it,” claims  Kouchnir. 

 The Sazerac Company has also got bartenders on its radar with its relatively new Epic vodka. Epic is made with vodka imported from France and has quickly caught the attention of the trade and consumers for its “smooth taste and classic, yet current image,” according to Tracey Clapp, the company’s marketing director for vodka. 

“We are aware of the interest in classic cocktails, and vodka has many.  In fact, we are releasing several classic vodka cocktail recipes this fall for Epic,” she adds.  And, true to US form, Epic vodka comes in several flavours, including coconut, cake, kiwi-strawberry, cherry and whipped cream. 

There are approximately 160 different species of chameleon. That’s almost as many chameleons as there were vodka launches in the  US last year. Whether the spirit lasts as long as the lizard depends on its ability to adapt.