Diageo admits Smirnoff vodka ‘got lazy’By Amy Hopkins
Smirnoff vodka “got lazy” and made the mistake of releasing a plethora of flavours that were “almost all the same” in recent years, the brand’s director has admitted.
Speaking at a conference in New York last week for Diageo’s investors, Matt Bruhn, global brand director for Smirnoff, said that a lack of innovation and high pricing led to loss of market share and sales declines for the brand in recent years.
“[Let’s] clear something very important up, yes we and vodka got lazy, we made mistakes,” he said. “Adding 42 flavours all of which are almost the same was a bad decision, taking price up year-on-year as our competition enter and took price down left us open to attack.
“We stopped bringing on new consumers, stop challenging the market and offering new experiences for new occasions. Vodka followed our lead, more flavours, more copycat brands, less true innovation and allowed other products to take the lead.
“We stopped challenging and starting protecting our position but as you will see we intend and have began to drive that challenger mindset back into the brand.”
Speaking to The Spirits Business earlier this year, Bruhn expressed concern that vodka was “losing the publicity” game against other categories such as American whiskey.
In Diageo’s 2014/15 financial year, sales of Smirnoff fell 3%, impacted by weakness of the flavoured vodka market in the US
Diageo’s CEO Ivan Menezes has previously claimed the brand’s pricing was “too high” in North America, leading to a loss of market share in what has become a saturated category.
According to Bruhn, while the vodka category is “flat”, it is “not dying” and can be reignited by focusing on consumer experiences as opposed to offering more flavoured variants.
“Smirnoff is not looking into vodka for the answers, they aren’t there and haven’t been there for years,” he said. “The answer to growth lies with consumers, an empowered generation of change agents demanding new products, new experiences they won’t be settling for our 45th flavour drunk with soda.
“The consumer future is bright – take a brand, and liquid that’s has scale and appeal add the consumer potential and shift efforts to bring in more consumers and growth can be strong.
“The difficulty is we have to lap the long decay of over flavouring the brand.”