Flavoured vodka not dead but market ‘evolving’

2nd April, 2015 by Richard Woodard

Demand for more “wacky” vodka flavours such as popcorn and bubblegum is waning in the US, but there is still potential in the emerging markets

Demand for natural flavours

Indeed, flavoured spirits growth outside vodka is having an impact on consumer flavour preferences within the category as well. “The huge variety of flavours that were introduced to the market over such a short period, such as bubblegum, may demonstrate that this growth was very much a trend,” says the Grey Goose spokesperson. “With all trends, they have a finite lifespan and what we can see is that consumers are returning to natural ingredients, locally sourced products and going back to basics.”

The changes to the consumer landscape are clearly doing little to slow the NPD production line at Pinnacle, however. “Pinnacle is recognised as a leader in flavour innovation,” says Dolenga. “We will continue to release innovative flavours as long as we see consumer demand and desire for them.”

But he is at pains to point out that this is not flavour innovation for innovation’s sake – again hinting at an evolution in the dynamics of the segment. “Instead of rolling out flavour after flavour, we differentiate ourselves by focusing on the quality of our vodka, understanding what the consumer is really interested in, and then creating a top-quality expression of our product to meet that demand,” he says.

Niche global appeal

In line with the global market for flavoured vodkas, roughly two-thirds of this article has been about the US. But what about the rest of the world? For the most part – Poland being a notable exception – flavoured vodka has in the past remained relatively niche.

But now that might be changing as emerging markets open up and diversify. “We have seen some fantastic developments in Asia, where up-and-coming bartenders in cocktail lounges and up-scale hotels are really pushing the boundaries,” reports Alexi Lambrou, Stolichnaya global brand manager. “The base spirit is therefore the champion, so they can experiment with a range of ingredients and garnishes.

“In developing markets, flavours represent a great way to build brand awareness and in regions where we have been growing, we’ve actually seen a solid appreciation of flavours and not so much fatigue – such as in Latin America.”

Pinnacle, meanwhile, has plans to target Australia, New Zealand and South America, where Dolenga sees “lots of untapped potential”, in addition to the brand’s activities in Canada and Mexico.

We do, however, need to keep some perspective here. Trends may be promising, but volumes are tiny compared to what can be shifted Stateside. “In the markets with a budding flavour segment, you do not see the same scale as you see in the US,” cautions d’Ascendis. “Brands may have three to five flavours, when in the US they may have as many as 20 flavours on the shelf. So it is still primarily a US story.”

For more information on the flavoured vodka category see The Spirits Business‘s April 2015 issue

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