Is vodka in a losing battle against flavoured whiskey?

7th August, 2015 by Amy Hopkins

If headlines are to be believed, flavoured vodka has had its obituary prepared for some time – but producers are reluctant to perform their swan song, despite challenges posed by brown spirits.

Flavoured-vodka

As flavoured whiskey grows, analysts have claimed the category is swiping marketshare from flavoured vodka

Over the past two years, the demise of flavoured vodka has been one of the most widely reported trends in the spirits industry, particularly as the segment’s challenges become more complex with the success of its rival brown counterparts. In particular, the tastes of cinnamon, honey and fruit have firmly situated themselves in the American whiskey category, which analysts warn may now be stealing market share from flavoured vodka in the US – where about two-thirds of all flavoured vodka is consumed.

According to a recent Rabobank report, flavoured American whiskey was the “hottest growth segment in the US spirits market” last year, generating more than half of the total volume growth for the industry. Meanwhile, imported flavoured vodka struggled against not only the rapidly evolving popularity of these brands, but also competition with domestic vodka labels and intense pricing pressure.

Cross-category battle

NABCA figures cited by Rabobank show that imported flavoured vodka volumes dropped 5.2% in the year, domestic flavoured vodka grew 3%, while flavoured whiskey soared by a massive 43%.

Beam Suntory – which jumped on the cinnamon bandwagon last year with the launch of Jim Beam Kentucky Fire – said its flavoured Jim Beam expressions accounted for 29% of the brand’s total growth in 2014. Vanessa Jenkins, senior director of Bourbon at the group, believes the category’s popularity shows no sign of slowing down.

“The flavoured whiskey segment continues to grow as consumer demand increases for a variety of unique flavour expressions,” she says. “We are making strategic investments across our portfolio to help drive continued growth and momentum for our flavoured products as well as our premium expressions, newest innovations and established brands.”

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