Beverage Dynamics

Beverage Dynamics May/June 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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24 Beverage Dynamics • May/June 2015 www.beveragedynamics.com O riginally much of vodka's stellar rise was sparked by marketing that spot- lighted status appeal and indefi nable allure. Then came an infl ux of fl a- vors to entice new consumers into the category. Today, that is changing: customers' palates are more educated and the focus is on the quality in the bottle. Consumers are interested in the provenance of spirits, what they are made from and how they are produced. And they are trading up for that quality. "Vodka is a staple; it's already over 30% share of throat, and the category is continuing to grow in the U.S. market," says Nicolas Guillant, president of Imperial Brands, whose fl agship is the So- bieski brand. "I think more of that growth now is coming from base vodka versus fl avored." The Distilled Spirits Council pegs the vodka category at $5.8 billion in revenues; growth last year was a healthy 3.3%, with the high-end and super-premium segments surpassing 5%. DISCUS also reports that straight vodka at 3.7% is outselling fl avored. For the past few years, it seemed that much of that growth and certainly much of the excitement centered on the fl amboyant fl avored sector. Now that appears to be changing: the pace of fl avor introductions is slowing, while many producers are focus- ing on their plain vodkas. A greater emphasis is being placed upon the provenance of the base spirit, and vodka customers are going straight. The top 10 vodka brands continue to dominate the category, although smaller, craft producers are making inroads, espe- cially in local markets. The leader, by far, is Smirnoff, with a projected 9.3 million 9-liter cases, according to the Handbook Advance 2015. All of the top 10 brands are strong performers in the straight vodka arena. And virtually all of the pro- ducers sing the praises and potential of unfl avored vodka. PLAIN AND SIMPLE "Consumers continue to enjoy and em- brace the versatility of straight vodka," says Diana Pawlik, vice president of marketing for Svedka Vodka. "Flavored vodkas have been making headlines by expanding the category signifi cantly and driving growth over the past few years. Recently, we've seen the fl avored vodka segment slow down; however, straight vodka seems to be a staple spirit that will maintain relevance over time." "Trends ebb and fl ow, and it seems that the fever pitch of fascination with vodka fl avors is waning," comments Ni- cole Portwood, vice president of brand marketing for Tito's Handmade Vodka, which coincidentally does not offer any fl avors. On the other hand, notes Port- wood, more fl avored whiskies are en- tering the market. "So, I don't think it's that consumers have completely tired of fl avors in general, but they are looking for innovation outside of the category." Retailers report a similar trend away from fl avored vod- kas and an upsurge in straight sales. "Certainly, fla- vored vodkas are heading south," says Jim Rilee, dis- trict manager and buyer for the Bottle King chain, with 14 retail stores in New Jersey. "A lot of customers are moving back to regular vodka versus the fl avors. People are returning to the old favorites," he says, citing Russian Diamond as an example. Relative newcomer Tito's also sells well at Bottle King. O riginally much of vodka's stellar rise was sparked by marketing that spot- O riginally much of vodka's stellar rise was sparked by marketing that spot- O riginally much of vodka's stellar rise was sparked by marketing that spot- O lighted status appeal and indefi nable allure. Then came an infl ux of fl a- O lighted status appeal and indefi nable allure. Then came an infl ux of fl a- O lighted status appeal and indefi nable allure. Then came an infl ux of fl a- O vors to entice new consumers into the category. Today, that is changing: O vors to entice new consumers into the category. Today, that is changing: O vors to entice new consumers into the category. Today, that is changing: Ocustomers' palates are more educated and the focus Ocustomers' palates are more educated and the focus Vodka consumers prefer their vodka plain and simple. " Consumers continue to enjoy and embrace the versatility of straight vodka" — Diana Pawlik, vice president of marketing for Svedka Vodka. BY THOMAS HENRY STRENK Straight Going

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