Flavoured vodka not dead but market ‘evolving’

2nd April, 2015 by Richard Woodard

Despite mixed results across a variety of markets, flavoured vodka still has a future – as long as producers learn from their mistakes in this field.

Flavoured-vodka

Producers have claimed that the flavoured vodka market is not necessarily failing, instead the broader vodka industry is evolving

*This article was first published in the January 2015 issue of The Spirits Business magazine

That old adage about lies, damned lies and statistics can be recycled yet again when discussing flavoured vodka. Glance at the headlines and you’d think flavours were yesterday’s fad – when in fact they could be tomorrow’s hero, particularly in vodka’s emerging markets.

Figures quoted by Bacardi’s Grey Goose suggest that global flavoured vodka volume growth has slowed in the past three years, with performance altogether static in 2013. But value still rose by 6.5%, and some brands – Grey Goose included – are driving up volume and value alike.

The negativity surrounds the US, where roughly two-thirds of all flavoured vodka is still sold, and where the back-bars and retailer aisles are groaning with everything from everyday fruit to whipped cream and bubblegum flavours.

“The fatigue is mainly a retailer phenomenon caused by SKU proliferation and loads of slow-moving inventory taking up valuable shelf-space,” reports Carmen d’Ascendis, global MD of Finlandia Vodka at Brown-Forman. “Because the obvious flavours are well-represented in the market, any new offer is either the eighth or ninth of its kind – how many citrus-flavoured vodkas does a retailer need? – or are so niche as to be meaningless.”

Market evolution

But for most, recent events do not signal the death of flavours, but an evolution of the market. “The dynamic of the category is changing as consumer trends of premiumisation and authenticity are driving a demand for more natural and refined flavour options,” says a Grey Goose spokesperson. “It is true to say that the success of the more outrageous flavours, such as popcorn and candyfloss, that once drove recruitment, are now waning.”

For a brand with a large portfolio of flavours, such as Pinnacle, these changing trends can drive opportunities as well as challenges. So, while the whipped cream/dessert variants that drove the brand’s success in the past are falling away, others are taking their place. Jason Dolenga, senior brand director of vodkas at Beam Suntory, says: “We’ve seen a significant increase in the sales of our fruit flavours, like peach and raspberry. There is clearly a demand among consumers for flavoured spirits across the industry, and we don’t see that changing any time soon.”

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