Cheers May 2016

Cheers is dedicated to delivering hospitality professionals the information, insights and data necessary to drive their beverage business by covering trends and innovations in operations, merchandising, service and training.

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Page 7 of 51 8 • May 2016 DRINK CULTURE By Jeremy Nedelka Stoli Group USA recently introduced Stoli Gluten Free, a new vodka made from corn and buckwheat. The latest ad- dition to Stoli's portfolio features the words "Gluten Free" on the front label and meets the U.S. TTB standards for glu- ten-free labeling because it's made with naturally gluten-free raw ingredients. Stoli Gluten Free is available for a suggested retail price of $19.99 for a 750-ml. bottle. I recently spoke to Stoli Group's director of brand marketing, Russ Pareti, to fi nd out more about Stoli Gluten Free's launch. Cheers: Why introduce this new vodka to the marketplace now? RP: We've been a pioneer in the category over the years. Stoli was among the fi rst to come out with fl avors and we were the fi rst to go superpremium with Elit. As consumers' tastes and lifestyles change, we want to identify and adapt to those changes. We found that one way to do that is introducing a gluten-free, premium vodka. We'd conducted quite a bit of research with consumers, distributors and retailers, and everything we uncovered showed that gluten-free was not a fad or trend, but an emerging lifestyle. Studies say 20% of consumers are actively looking to include more gluten-free products in their diets, and our internal surveys showed that 80% of con- sumers were unaware of gluten-free vodkas in the marketplace. When you add all that up, we saw this as a great opportunity. Cheers: How do the gluten-free ingredients impact the production process and the taste of the vodka? RP: The production is the same as our Stoli Premium vodka. Stoli Gluten Free is distilled three times and fi ltered four times through quartz sand and birchwood charcoal before being blended with spring water. It all starts with the ingre- dients: In order to be gluten-free, you need to use gluten-free raw ingredients. So we found that a blend of 12% buckwheat and 88% corn was the perfect recipe to achieve a signature character and taste for the vodka. Using buckwheat really brings for- ward a bolder tasting vodka, while still smooth with a clean fi nish. It's much bolder than the corn, grape and potato vodkas already on the market. Cheers: What promotions and advertising are you planning to coincide with the launch? RP: There's a 360 degree program with $1 million in total support, including consumer marketing and advertising, trade print and digital, public relations, social media and on- and off-premise sampling. We're putting strong support behind this launch and we'll be targeting traditional outlets that we're working with on our other brands. Our expectation is that off-premise distribution can build quicker due to scalability, where often times a single person infl uences buying decisions at many stores. We've found that our on-premise chain partners have also received the prod- uct very well, and we'll continue to fi nd opportunities there to place additional distribution. Cheers: Do you expect competitors to follow suit and label their vodkas as gluten-free, or introduce new products that meet the gluten-free requirements? RP: Stoli has created a completely new recipe to meet the needs of gluten-free consumers. Although there are other vodkas on the mar- ket that are gluten-free, those companies created a product that happened to be gluten-free. We went out of our way to create this product specifi cally for a subset of consumers. We spent a lot of time and resources to innovate in this category and develop the right taste profi le and packaging. We'll be the primary vodka that has the words "gluten-free" printed prominently on the label. But yes, I'll be curious to see whether others in the vodka category follow suit. ADAPTING TO CHANGING CONSUMER LIFESTYLES

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