Top trends in the vodka category

Vodka has evolved in line with changing consumer expectations and the demands of an unstable geopolitical environment. We explore the trends now driving vodka version 2.0.

These are the top trends driving the modern vodka category

For a segment so marked by upheaval over the past 12 months, vodka has displayed a remarkably staunch resilience. Away from the beleaguered Russian and Eastern European markets and the contagion affecting Western Europe, the story for the category is one of growth. Advancement may be slowing and consumer whims shifting, but this new version of vodka brings with it plenty of promise – and, of course, a different type of trend.

This new wave vodka is less about flavour or flashiness and has more to do with winning consumers on the less material but still tangible values behind a brand. Showing off wealth might win friends in some circles, but the new vodka drivers have more to do with feeling good about what you are drinking, rather than looking good sitting next to the bottle.

“Bartenders and consumers are waking up and looking past the marketing of a brand, so celebrity or position is less relevant and more time is being taken looking at flavour profile and taste,” reckons James Chase, marketing director, Chase Distillery.

The rise and rise of millennial consumers has much to do with this swing. US-based marketing sector analyst Marketing Charts asked almost 10,000 people aged 25-34 across 19 countries what attributes most appeal in a brand. Trustworthiness ranked top, followed by creativity, intelligence, authenticity and confidence. It’s no coincidence that as this demographic rises to prominence, key brand and marketing cues are adapting.

“About five years ago we changed our communications strategy. We stopped relying solely on rational purity messages, instead introducing the world to ‘A Life Less Ordinary’,” says Carmen d’Ascendis, VP global brand director at Brown-Forman’s Finlandia. And this lifestyle positioning is working. “Over this time, we were able to outperform the category in key markets. The strongest results came in those markets that brought this unique world to life in the on-trade and through events.”

What trends then are set to define vodka’s move from bold and perhaps brash to a more thoughtful consumer spirit choice? Whether brand new or coming to greater prominence, the following four trends look set to shape vodka’s more meaningful side in the next 12 to 18 months.

Lifestyle and health

On initial consideration, ‘vodka’ and ‘health’ may not seem like blissful bedfellows. But a number of brands are consciously seeking to open up conversations around health and wellbeing through consumer-facing initiatives. This makes sense: data presented by Katy Carter, Cellar Trends’ research and brand manager, shows that 25% of UK cocktail drinkers said they would always pick a low-calorie cocktail if it was an option.

LVMH-owned Belvedere is one such brand. Its recently launched ‘Be Natural’ manifesto, alongside the Belvedere Spritz Collection of Cocktails, is encouraging consumers to think more about what they drink.

“The real message for us is one of naturalness, to try to create cocktails that are low in sugar, utilising fresh ingredients,” says Claire Smith-Warner, director of spirits education at Moët Hennessy. In addition to promoting a naturalness message, the collection of 12 serves makes a hero of the vodka itself.

“We’ve been talking about sugar for the last couple of years because responsible drinking for Belvedere actually also means responsible sweetening. Sugar, and in particular fructose, is metabolised in the same way as alcohol. Alcohol is regulated because it can be addictive, it can be toxic, but also sugar has these same sorts of principles – but it’s not regulated.”

As such, Belvedere is championing a return to simple, elegant, drier styles of cocktails that do not require any added sugar.

Gluten-free is another area where health/lifestyle and vodka happily meet.

Stoli Gluten Free launches this month in the US, the latest in a number of brands promoting the fact that their wares fit within a gluten-free lifestyle.

“Gluten-free is a strong word in the US market; is gluten distilled out of vodka? Probably yes, but consumers still see it as a unique edge to purchase,” explains Chase. “Healthy drinks are vogue and vodka is often a great spirit to carry this out.”

Water

Water has become an established vodka buzzword but continuing the theme of ‘drinking clean’, brands are increasingly honing the H20 message – and consumers are listening.

“Water is something we are all made up of, we all need it to live, it’s a very important part of this planet, people have become more and more conscious of pollution in the world, and it is harder to find cleaner water,” Joe Petch, brand ambassador for William Grant & Sons-owned Reyka Vodka, outlines.

“The sales of bottled water prove that people are getting more concerned about what they put in their bodies.”

Reyka is produced in Iceland and the brand cites water as “the most important ingredient in vodka production”. Its water is collected from a spring that runs through a 4,000-year-old Arctic lava field, providing a natural filter.

“The average consumer now is a lot more educated and wise than they were 10-15 years ago,” Petch continues. For him, the quality of the water focus is a vehicle to adding value. “Reyka in particular focuses itself on those types of people who want to learn and are interested in these types of things. If people were uninterested they would perhaps go and pick up a house own brand, but I think they’ll hopefully realise the difference that there is a lot to be said for paying more for booze.”

It’s a philosophy that certainly worked for elit by Stolichnaya. It’s now-concluded Pristine Water series explored how water from different sources affects the flavour of the vodka. Releases in the range focused on water from New Zealand, The Himalayas and Colico Lake in The Andes.

“To craft a truly exemplary vodka, one with subtle taste and extraordinary clarity, you must begin with water, the purest of all elements,” says Lori Tieszen, chief marketing officer, Stoli Group USA, at the launch of the third and final Andean edition which commands a price tag of US$3,000.

Hailing from Australia, 666 Pure Tasmanian Vodka is another brand proclaiming the water story. The spirit is produced from Cape Grim rainwater, the only rainwater clean enough to be approved by the Health Departments of the US, EU, Australia and Japan.

Raw materials and provenance

Playing into millennials’ quest for legitimacy, vodka brands with a compelling story about the use of raw materials are capturing consumer imagination and building emotional links with that core audience.

“The interest in authenticity and simplicity driven by the growth in the gin category is now reaching into all other categories,” says Emma Wykes, global head of sales at milk-based brand Black Cow Vodka. “Brands now have to work harder to engage the consumer with real provenance and unique ingredients. The clean taste of Black Cow lends itself to versatility and mixability.”

For Wykes, reinforcing the sustainability and provenance of a product is critical. It’s an important consideration for bartenders, too. “Bartenders are now so educated in all aspects of their industry; they are experts and take pride in their knowledge. They will no longer be fooled by clever marketing and packaging. They want integrity and good-quality base ingredients. It allows them to really focus on the guest experience and create simple, delicious drinks.”

Pernod Ricard USA’s recently launched Smithworks Vodka is an example of a brand pushing both its roots and raw materials. Unveiled in March 2016 in partnership with musician Blake Shelton, Smithworks is made from Kansas, Missouri and Oklahoma corn, and water from Lake Fort Smith, Arkansas. Pernod Ricard USA says the brand’s name and tractor signifier symbolise the “hardworking values” of the production team, and the “local pride, simplicity and hard work” values of America’s heartland.

Kate Pomeroy, vice president for innovation, Pernod Ricard USA, understands that hyper-locality and a strong lifestyle message is a potent blend. “Smithworks knows that the most meaningful moments in life are often spent with family, friends and great drinks. Blending our expertise in vodka with the passion and pride of our Smithworks plant in Fort Smith, Arkansas, we’re excited to bring consumers a new American vodka,” she said at the launch.

Ethical alliances

Whether sizeable multinationals to local-level brands, vodka as a category is aligning itself ever closer to philanthropic campaigns and fundraising initiatives.

“Consumers are walking away from flavours and the empty promises of celebrity. They are looking for brands with meaning,” says Finlandia’s d’Ascendis. In the US, the brand is a member of 1% for the Planet, donating 1% of its US sales to environmental non-profits that support pure water efforts. It’s a shrewd move: a recent study by Horizon Media’s Finger on the Pulse found 81% of millennials expect companies to make a public commitment to good corporate citizenship.

Finlandia is far from alone – many vodka brands have now pledged allegiance to charitable causes, awareness raising exercises or supportive campaigns. In 2015, Absolut Vodka again released a limited edition bottle design featuring the colours of the original gay pride flag to “support the rights of proud people around the world”. The bottle reads: “We are proud to believe in equality. We believe that the world needs to change. Change so that each and every individual can be proud, and decide for themselves who they belong with, live with and love.”

Diageo-owned Smirnoff meanwhile marked International Women’s Day through its Smirnoff Sound Collective initiative. “While much of the conversation over the past few years surrounding female DJ talent has focused on equal pay and opportunities for female DJs, the Smirnoff Sound Collective has decided to use International Women’s Day as a worldwide celebration of female DJs,” the brand said in a statement.

“Smirnoff is once again using its global platform to celebrate diversity in a way that inspires positive conversation within music and how the culture truly becomes better when everyone is included.”

Gruppo Campari’s Skyy Vodka also entered the political conversation by again lending its support for the legalisation of gay marriage in the US ahead of the Supreme Court’s decision in June 2015. “Skyy’s commitment to Toast To Marriage has evolved substantially since last year,” said Umberto Luchini, VP of marketing at Campari America in the April.