Vodka: Premium Bonds

17 March, 2014

Lucy Britner finds top-end vodkas are flavour of the month – even if some flavours are floundering

If 0.3% was the growth registered on any other category, you might not be that concerned, but when it is registered on the global vodka market, it could be considered cause for panic.

According to a report from IWSR, the market grew to 493.9 million nine-litre cases in 2012, only 0.3% up on 2011. Before you start off-loading shares, that’s the number for the entire category. The report goes on to say that premium-and-above sales bucked the trend by growing 7.6% to 25.8 million cases. Good news for this feature – people really do seem to be “drinking better”.

According to the Just Drinks report: “The US and Russia account for the vast majority of the premium-and-above market. The US alone has a 74% share (18.9 million cases), while Russia has an 11.5% share (2.9 million cases), followed by Brazil with a 2.3% share (601,250 cases).”

Looks like when it comes to staying power, vodka makes super glue look fickle. That it still shows growth in mature markets is terrific news for drinks companies.

In the words of Peter Fairbrother, global white spirits portfolio director for Diageo: “There is a track record of longevity of growth in the vodka category since the 1940s, and latest Nielsen data out of the US shows both super-premium and ultra-premium segments in strong double-digit growth past 12 months, so there’s no sign of a slowdown. We believe the future for vodka is bright in its most developed market.”

Fairbrother says when you look outside the US, the category remains relatively underdeveloped globally with “solid opportunities for growth”.

He continues: “Vodka’s great strength and key growth driver has and continues to be its versatility and we believe this is what will underpin the future of the category. The breadth of possibilities for great drinks within vodka allow for ongoing relevance and dynamism as well as premiumisation within the category.”

The great success of the US has led brands created in that market to ride the crest of the wave across the Atlantic and bring American tastes and trends to Europe. Earlier this year, Texas-based Tito’s Handmade Vodka teamed up with Hi-Spirits to launch in the UK.

Pioneer Tito Beveridge says: “Western European consumers often look to the US for upcoming trends. Based on Tito’s Handmade Vodka’s success and all the great fans we have who both travel to the UK and introduce friends there to the brand, we have been receiving numerous inquiries from the UK asking us to introduce it.”

Beveridge has his sights set further afield and he adds: “After the UK, we are focused on finding the right partner in the Republic of Ireland. As you know, the vodka category does very well there and we want to be part of what’s going on. Ireland is a huge tourist destination for Americans and we’re really looking forward to being available for all our loyal fans even when they travel.”

Keywords: vodka, lucy britner

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