Analysis: Vodka’s performance in six key markets

15th May, 2017 by admin

As vodka’s key markets continue to stumble over macroeconomic hurdles, producers are targeting bright spots in little-explored territories. The Spirits Business analyses the struggling category’s new world map.

*This article was originally featured in the April 2017 edition of The Spirits Business magazine

Headline volume sales figures for vodka in 2016 convey a mixed picture: one of long-running declines, stagnation and a few bright spots of growth.

The past few years have taken their toll on the category, with political strife, economic turmoil, tax hikes and a growing black market hitting its Eastern Europe bastion, while market saturation, flavour fatigue, pricing and competition from brown spirits have knocked the wind out of global brands in North America.

Globally, vodka’s volume sales declined by 2% in 2016, when the majority of other spirits categories witnessed growth. However, the category is not prepared to sing its swansong just yet: a number of emerging markets, relatively unexplored by vodka producers until now, may hold the key to its revival.

“Despite the long-term decline of its largest market, Russia, vodka has shown
itself to be a key growth driver for international distillers,” says Jeremy Cunnington, senior analyst, alcoholic drinks, at Euromonitor.

“The flavourless liquid has proved very popular globally thanks to its mixability, and has meant dynamic growth in both mature and emerging markets, led by the US.

“However, despite large volume growth expected in these markets, many of these traditional growth regions are problematic for international distillers. Producers need new markets.”
Diversifying away from vodka’s traditional heartlands is a tactic already reaping rewards for brands, allowing them to record strong growth, if from a relatively small base.

Cunnington highlights Asia Pacific as having “great opportunities” for vodka brands, while the growth of middle-class consumers in Africa and the Middle East also presents new potential for the category.

Click through the following pages for an in-depth, market-by-market analysis of the vodka category.

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