Beverage Dynamics

Beverage Dynamics - March 2015

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.

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www.beveragedynamics.com March/April 2015 • Beverage Dynamics 61 Flavored Vodka "The infusion-type fl avors do well, too, be- cause they are all-natural and that appeals to the cocktail folks." "The various citrus vodkas are the big- gest sellers among fl avors," says Young at Davis Liquor Outlet; "Those mix well in vodka tonics." At Merwin's, "New Amsterdam is killing it with Pineapple and Peach," Dachis says. "UV's Sriracha is going gangbusters too." Producers see similar popularity trends. "Sobieski's most popular fl avors are Orange, Raspberry and Citron, which is similar to the rest of the category," says Guillant. REGIONS AND SEASONS "The top fl avors do vary by market," says Bonchick at 375 Park Avenue Spirits. However, the core top sellers within the Van Gogh Vodka port- folio are Double Espresso, Acai-Blueberry, Cool Peach and Espresso. "There are defi nitely regional variations for fl avors," Dolenga says. Pinnacle has taken advantage of that with some smaller launches, as well as seasonal fl avors. He cites a King Cake variant that sells out in Louisiana during Marde Gras. Texas is big on Pinnacle Grapefruit. "There will always be fl avors that pop regionally but not at a national scale. We have fl exibility and ability to be speedy to capitalize on those." That includes limited-time offerings such as Pinnacle Pumpkin Pie in the fall. WHISKEY REBELLION Perhaps inspired by the vodka segment, whiskey producers have started their own fl avor revolution. Flavors such as honey, cherry, maple, vanilla and cinnamon are intended to lure younger drinking age consumers into the brown spirits fold. That's the same customer targeted by fl avored vodkas, and it seems to be having an impact. "Brown spirits are making a huge comeback with both the con- sumers and mixologists and vodka has suffered because of that," Bonchick says. "Interestingly enough, it is fl avored vodka that has helped drive the ex- plosive growth of fl avored whiskeys," posits Pawlik at Svedka. Flavored whiskeys are very popular at Bayway right now, Leighton says. "I would guess that's drawing the same customer as fl avored vodkas." At Davis Liquor, Young sees a similar phenom- enon: "Flavored whiskey is capturing that vodka demographic a little bit." "Flavored whiskeys have been able to blur lines between categories and show how consumers are looking to try new trends and are willing to ex- periment with their drinking choices," points out Burke at Phillips Distilling. Clapp at Sazerac is still hopeful re- garding the future of the category and not fazed by fl avored whiskey's recent surge in popularity. "No doubt there will continue to be innovation in vodka," she says. "I'm certain we'll see more fl avors, yet at a slower pace than previous years. Despite the atten- tion that whiskey has received, consumers are still drinking all types of vodka. We re- main very passionate about vodka and new possibilities." FLAVOR FATIGUE Despite all the recent launches, it seems that the rapid pace of proliferation has slowed somewhat, and perhaps sales as well. Some would argue that inno- vation became too outlandish. Retailers have had increasing diffi culty shoehorning all the new entrants on already saturated shelves. That is being exacerbated by another whiskey entering the fl avor fray. "Right now, we're seeing the fl avor segment decline, most likely due to an over-saturated market and fl avor fatigue," Bonchick says. "There were far too many fl avors introduced in a short time period, and although some had a modicum of success, they were short lived." At the recent reveal of 2014 industry statistics from the Distilled Spirits Council, chief economist David Ozgo reported that sales of fl avored vodka had slowed. However, traditional vodka volumes were up 3.7%, according to DISCUS. "While the growth of fl avored vodka has slowed over the last 12 months, the unfl avored vodka category is keeping pace with the rest of the industry,' echoes Essig at Smirnoff. "It's the tipping point. My theory is that at some point the market will explode because there are one too many fl avors," quips retailer Leighton. At Bayway, vodka fl avors have hit their peak and are on a slight downward trend. "There are all these crazy fl avors, like Cin- nabon; it tastes good but it's based on a mall bakery concept." "The spectrum of vodka fl avors ran the gamut from cereals to confectionary to fi sh to tobacco; the category started to border on the absurd," Bonchick says. "I wouldn't say that any given fl avor is too wacky, too crazy, if there are consumers with an interest in those fl avors," Dolenga counters. Pinnacle will continue to innovate, he adds, because consumers are naturally variety-seeking. But, Dolenga notes that the brand has launched fewer fl avors year to year than it did a few years ago. Retailers are using discretion to deal with the infl ux. "We stock all the new ones," Mulvihill says; "See what sticks, what doesn't and keep the in- ventory moving." At Davis Liquor, "I try to stock just what sells. If a fl avor doesn't sell, I put it on clearance and get rid of that stock," Young says. Dachis at Merwin Liquors agrees. "It's up to us retailers to weed out the non-sellers." BD Wave Vodka Family "While the growth of fl avored vodka has slowed over the last 12 months, the unfl avored vodka category is keeping pace with the rest of the industry." — Brad Essig, Vice President of the vodka category at Diageo

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