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Absolut will ‘continue to see growth’ in flavours
Despite the thought that millennials no longer view flavoured vodka “authentic”, Absolut will continue to “see growth” in the category, the brand’s global marketing head has predicted.
Absolut Vodka will “continue to see growth in flavours”
Speaking to The Spirits Business, Craig Johnson, vice president, global marketing at Absolut, addressed some of the challenges the brand and wider vodka sector has faced in recent years.
“The biggest threat in the US market has been the decline of flavoured vodka, and when you look at this it’s a direct reflection of younger consumers and what they want from brands,” he said.
“These consumers want realness and they do not view flavoured vodka as this. Our flavours are natural and flavoured vodka is still a category I believe we will find growth in, but consumers are starting to weed out fake and unreal brands.”
In 2015, brand owner Pernod Ricard implemented a €404 million writedown on the value of Absolut, contributing to the firm’s total 15% net profit decline in 2014/15.
Of this move, Johnson said: “This is part of a standard operating procedure that we go through to analyse business performance and analyse the value of our brands. But I think vodka is a growth area for our business and will continue to be a growth area.”
In order to claw back growth for Absolut, Pernod Ricard has revealed plans to focus on the development of super-premium ‘single estate’ brand extension Absolut Elyx.
Announcing the group’s latest half-year financial results, Alexandre Ricard said Pernod is “in line with its ambitions” to stabilise Absolut in the medium-term, blaming the brand’s decline on a surplus of flavoured releases and pricing dilemmas.
“Our successes in the past have held us back in the future,” added Johnson. “Yes we probably should have talked about our story sooner, but there’s no better time than the present.
“We know Absolut is in an extremely competitive category and we need to make sure we are being competitive with pricing and do the right things to drive growth. Vodka is a battle every day to gain new consumers and keep old consumers.
“I don’t want to make any concrete predictions [on sales], but we are doing all the right things.”
For an in-depth look at the performance of Absolut Vodka and the broader vodka category, see the April 2016 issue of The Spirits Business magazine, out now.