Pinnacle vodka chief: flavours are still in demand

With 40 flavours to its name, Jason Dolenga, Beam Suntory’s head of vodka, tells Becky Paskin of Pinnacle’s colourful future as it eyes overseas markets.

According to Jason Dolenga, senior brand director of vodka and gin at Beam Suntory, there is still “very strong demand” for flavoured vodka

When Beam bought the burgeoning Pinnacle Vodka from White Rock Distilleries in 2012, it had just recorded a whopping 93% volume growth, leaping from one million cases to 2.7m. “At that point, the one place Beam’s portfolio was lacking was in vodka,” says Jason Dolenga, senior brand director of vodka and gin at Beam. “We had a rum, multiple Bourbons and some vodka but nothing really at the size or scale of growth rate that Pinnacle was enjoying. It allowed us to compete in a significant way in the number one largest category by case volume in spirits.”

At the time, Dolenga was busy working on the US drinks group’s super-premium Bourbon brand Maker’s Mark, but the reputation of Pinnacle had transcended categories. “I did market visits with Maker’s Mark across the States, and the one thing I always heard was how Pinnacle was absolutely crushing it,” he recalls. “They had these large blue walls full of different flavours, which we still have, just with a few more bottles now.”

From Bourbon to vodka

The Chicagoan made the transition to Beam’s vodka portfolio in mid-2012, just months after the acquisition of Pinnacle. By that point, America’s love affair with flavoured vodka was in full swing, with every conceivable flavour available in a bottle – including acquired tastes like bacon and smoked salmon. With flavours accounting for 21% of all vodka sold in 2012, according to Discus, it was no wonder Beam jumped at the chance to add a high growth potential premium vodka brand with an innovative list of flavours to its repertoire.

Arguably Pinnacle’s success first sprang from White Rock’s sale of Three Olives Vodka to Proximo Spirits in 2007, allowing it to focus on growing the brand as its only vodka attribute. By 2010 Pinnacle had achieved one million case sales, but its meteoric leap forward came from the introduction of what has now become a nationally treasured flavour – Whipped. “It really does go with anything, just like whipped cream,” Dolenga enthuses. Appealing to the Americans’ legendary sweet tooth, the expression led a stream of new confectionary-flavoured products from Cake and Cookie Dough to Marshmallow and Gummy to market.

Beam swiftly snapped the brand up for US$605m in April 2012 alongside fellow White Rock brand Calico Jack Rum, quickly requiring the group to alter its heavy focus on brown spirits. “With Pinnacle we had a brand that sold over 2m cases on the day we bought it,” Dolenga explains. “That changed the game substantially for how we were going to market our portfolio, being a Bourbon company with some rum brands.”

Pinnacle’s range of flavoured vodkas include Cinnabon, Whipped Cream and Pumpkin Pie

Confectionary flavours

Taking its cues from the success of the confectionary line, Beam has since grown Pinnacle’s army of flavoured vodkas to over 40 permanent and seasonal expressions, with more fanciful creations including Pumpkin Pie and the most recent, Cinnabon – a brand of cinnamon roll – which launched in November 2013. “It’s a big idea, people know what Cinnabon is. It’s a little different from your normal peach vodka that you know exactly what to do with, but if you can create a buzz using flavours people understand, you could have a hit on your hands.”

While Beam continues to invest in bringing new innovative flavours to market – nine launched last year – others have declared an 11.7% fall in flavoured vodka in the US on-trade in Q3 2012 to Q3 2013 (Restaurant Sciences) as the beginning of the end of flavoured vodka’s heyday. Dolenga meanwhile is confident the figures are nothing to worry about. “People talk about flavour fatigue but I’m not sure that’s something that really happens,” he declares. “Flavours in general are very much in demand. The more out-there flavours may not be bought multiple times because consumers don’t really know what to do with them, but the core flavours that people are used to continue to be very hot.”

Flavour fatigue?

Like most vodka brands boasting a thorough portfolio of flavours, Pinnacle has continued to ensure its unflavoured, core expression doesn’t get left behind. “We can’t just rely on flavours for all time,” Dolenga notes. “The majority of vodka is bought and drank in an unflavoured state, which is why we have worked really hard on building it into a big part of our future.” The majority of Pinnacle’s volume still lies with its core expression, a five-times distilled wheat vodka imported from France with a taste that Dolenga believes rivals that of Grey Goose.

Beam is intent on a two-pronged marketing approach communicating both its flavours and core expression, all with the central aim of building that solid blue wall of Pinnacle vodka in stores across the US, Canada and Mexico. “I don’t think we’ll ever leave flavours,” Dolenga says. “There’s no doubt that we’ll continue to sell more of the well-known flavours like peach, coconut and berry, but we won’t give up on providing flexibility, versatility and choice because that’s what made Pinnacle an interesting brand and different from our competitors in the first place.”

Dolenga says Pinnacle vodka is now seeking overseas expansion in Asia, Australia and South America

“Substantial” growth forecast

The brand grew by a modest 45,000 cases in 2013; a steady performance considering its nine new product launches during the period. However, Dolenga hopes to see “substantial” growth for the brand by 2017 with an aim to become the US’s second largest vodka brand by that date – overtaking Grey Goose, Svedka, Stolichnaya, Finlandia and Absolut – although he’s coy about an exact figure. But Beam’s ambitions for Pinnacle don’t stop there; it intends to transform Pinnacle into an international brand in 2015 with expansion into markets in Asia, Australia, New Zealand and South America.

Dolenga however is not blind to the fact that nowhere in the world has as much of a penchant for overly sweet flavours as the US. “The good thing about having a wide portfolio is you have the ability to go in with what the consumer wants. It’s important to match what we’re doing with what the consumer’s looking for. Unless people are just dramatically different, which in some cases there are regional differences, there’s always an opportunity to do something new, and for us it’s very low risk to put a flavoured vodka into an international market because we have the unflavoured expression too. We have spotted where we are most likely to succeed and that’s where we’re going to go first.”

“Every man’s” vodka

While Pinnacle’s strategy will alter market to market, its core ethos of being a fun, “every man’s” vodka and ultimate goal to be “the world’s most loved vodka” will run throughout its roll out. “We want to be the brand everyone wants to give a hug to,” Dolenga adds. “Our view is not to have people think about Pinnacle as the reliable old vodka like some of our competitors, but as the vodka that makes them smile because we talk to them in a way that’s friendly and fun, not as a stodgy or overly stuffy, clubby vodka.”

Despite its overseas ambitions, Pinnacle’s core focus will always be on its home market where vodka volumes were up 1.1% in 2013, which given the enormous size of the category at 66 million cases, drove US$122 million in new supplier revenue (Discus). The premium and high-end premium segments were the only vodka categories to show any growth in the year, bolstering Dolenga’s view that the mid-range market still presents “an exciting opportunity” despite talk of widespread premiumisation coming from brands like Grey Goose and the craft sector.

That may go some way to explain Beam’s strategy to focus on Pinnacle rather than its two super-premium offerings, Vox and Effen. “There’s moderate growth, but there’s little focus on Vox right now. Effen has had a lot of success recently with the Cucumber flavour which we launched two years ago, but our real focus right now is building out the 3m case brand that is Pinnacle; that’s where all the opportunity is.”