Vodka: Premium Bonds

The analyst tracks more than 600 flavoured vodka brands, with the top 50 accounting for 73% of sales. Among the larger brands, Absolut Citron, the flavoured vodka category leader, saw a 1.8% year-on-year sales decline. While Grey Goose Cherry Noir flavoured vodka is enjoying increased on-premise sales, all other Grey Goose flavoured vodkas’ on-premise sales are off between 8%-20%. Other category leaders, such as Stolichnaya and Three Olives, are down more than 20%, according to the report.

So what’s next for flavours

Stoli launched its first flavoured vodkas more than 50 years ago – Pepper and Honey & Herb flavours, which were introduced in 1962.

Global brand manager Alexi Lambrou says: “Selecting the best taste is clearly important so the first step is to ensure we have something consumers will enjoy that’s both original and premium, such as the indulgent line including Salted Karamel, Chocolat Konut and Chocolat Razberi. Furthermore, we want flavours that bartenders in the on-premise would value as part of their back bar in creating new and exciting cocktails.”

Meanwhile, Diageo approaches flavours with caution for some of its brands. Ketel One, a joint venture between Diageo and the Nolet family, is focused on two classic flavours – Citroen and Oranje.

Cîroc on the other hand has seen a steady trickle of flavours. Diageo claims Ciroc Coconut was one of the first coconut flavoured vodkas and “certainly the first in ultra premium”. Cîroc has since launched a range of flavours including Red Berry, Peach globally and, most recently, Amaretto in the US last year.

Fairbrother says: “These launches were a breakthrough in vodka, with Cîroc Peach being the largest revenue-generating innovation in the States last year. All new variants have complemented the existing business, increasing both the number of consumers choosing Cîroc and the share of drinks that Cîroc earns from its target consumer base.

“In many ways we see Cîroc as still being in ‘launch’ in the US and we believe it has tremendous growth potential ahead. Our total brand awareness, trial and distribution all are in significant growth.”

If Cîroc’s foray into flavours is a trickle, then Smiroff’s is a torrent and the brand is well versed in the dessert trend that is still prevalent Stateside. Most recent flavours include Iced Cake and Kissed Caramel.

“We have also launched Smirnoff Sorbet flavours to address consumers’ interest in a lower-calorie product,” adds Michelle Klein, VP, global Smirnoff.

Although Absolut has long been a pioneer of flavours – it launched its first flavour Absolut Peppar in 1986 – activity for 2014 is centred largely around its luxury, sparkling and oak-rested expressions.

Mathias Westphal, global brand director at Absolut says: “We are currently focused on supporting the three new products that we have released in the past couple of years. Absolut Elyx – a handcrafted luxury vodka, Absolut Tune – a vodka and sparkling wine hybrid – and Absolut Amber – vodka rested in oak barrels. That said, we are always looking at ways to elevate the vodka category through innovations and new flavour offerings that open up the occasions on which people can enjoy Absolut, and how mixologists create new types of cocktails.”