Beverage Dynamics is the largest national business magazine devoted exclusively to the needs of off-premise beverage alcohol retailers, from single liquor stores to big box chains, through coverage of the latest trends in wine, beer and spirits.
Issue link: http://read.dmtmag.com/i/30945
The top-selling vodka in the U.S., Smirnoff debuted Mango and Peach flavors last year, along with an overall redesigned package. Skus Galore “O ver the past 12 months there has been the biggest increase of skus I’ve ever seen,” reported Rob Locricchio, store manager at Liquor Mart in Boulder, CO, where vodka accounts for 25% of the store’s total liquor business. “It’s an easy category to get into and I think that’s one reason why it has got- ten so big,” said the retailer. All this category churn means intense com- petition at every price point. “It’s a competitive category, there are a lot of skus, a lot of choices,” agreed Nick Nelson, senior brand manager for Finlandia Vodka. “In the vodka world there are a lot of occasions, taste profiles, flavors and consumer prefer- ences. That’s why the category is so dynamic and inter- esting. There’s openness among consumers now to try different brands, something new. That’s why there is so much activity in the category.” Possessing clear points of differentiation, having a compelling story to tell and communicating that to the consumer is as important as ever in the crowded vodka marketplace. Tito’s Handmade Vodka is among the above-premi- um-priced brands that have continued to grow through- out the recession. The brand, from Austin, TX, has suc- cessfully positioned itself as an American craft vodka that can compete against imports. But its sales have jumped beyond what we usually think of as coming from a “handcrafted” product. Last year, the brand surged 28.2% to 364,000 9-liter cases. Establishing the “liquid credentials” is how Adam Rosen, brand director for vodkas at Diageo, puts it. “Ingredients, origin and heritage have become increasingly important factors when consumers are deciding which brands to buy,” says Rosen. The global drinks giant has covered all bases. Over the past few years, Diageo has become one of the most significant industry players in vodka with a portfolio that includes category leader Smirnoff (up 1.0% last year to sales of 9.6 million 9-liter cases) and prestigious labels Ciroc The value-priced Burnett’s Vodka hit 1.4 million cases last year. The brand also just released two new flavors, including Burnett’s Orange Cream and Limeade. 18 • Beverage Dynamics • www.beveragedynamics.com • May/June 2011 and Ketel One. The French import Ciroc introduced a popular coconut-flavored extension last year, as well as a Red Berry version, and with the continued mar- keting support from hip-hop entrepreneur Sean “Diddy” Combs the brand more than doubled its sales in 2010 to 750,000 9-liter cases. For its part, Ketel One also had a stellar year, with a 5.4% sales increase, to well over 1.9 million cases. The company also owns Popov Vodka, a major player in the value segment, and recently introduced other new vodka brands including Rokk Vodka and Moon Mountain Vodka. “It only makes sense that consumers expect vodka to deliver Absolut Wild Tea was recently added to the brand’s portfolio, which gained 2.6% last year to 4.6 million cases. differently for different occasions and dif- ferent tastes. Now, with our leading line- up of vodka offerings, Diageo allows for consumer access at any price point, while delivering on consumer trends across the board,” explained Rosen. As always, the large-volume brands that are household names help drive the category growth. Besides previously mentioned Smirnoff and Ketel One, these include Absolut (sales of 4.6 million cases in 2010), Grey Goose (3.4 million cases), Svedka (over 3.2 million cases, up 18.2%), Skyy (2.7 mil- lion cases) and Stolichnaya (almost 1.9 million cases), among others. Other brands like the value-priced Burnett’s (up 10.0%), Pinnacle (up 37.7%), UV (up 24.9%), Tito’s Handmade (up 28.2%), Fris (up 37.9%), Russian Standard (up 34.2%) and Ruskova (up 20.9%) also helped contribute to the category’s continued positive performance. And then there are some of the newer brands, such as Sobieski (up 43.7%), Crystal Head (100,000 cases), Godiva Vodka, 42 Below and 360 Vodka, to name a few, that continue to inject new dimensions into the category. Trading Up, Down and All Around odka’s range and versatility helped the category weather the recessionary storm ably over these past few years. Sure some consumers traded down to lower-priced labels during the dark years — but they V