Vodka needs ‘casual’ premiumisation to return to growth

Vodka producers must adopt a more “casual premiumisation narrative” and focus on provenance and the vodka soda serve to offset declines across the category, a leading analyst has advised.

Vodka volumes have been declining year-on-year

Vodka volumes declined 0.5% to 322.2 million nine-litre cases in 2018, according to data from market research provider Euromonitor.

Speaking to The Spirits Business earlier this month, Spiros Malandrakis, head of alcoholic drinks research at Euromonitor, said the underlying cause of vodka’s year-on-year declines of late were “cyclical” and due to “generational” trends.

“Vodka has been disappointing for a number of years, languishing in this kind of semi-limbo state, either static or with minor declines,” he explained.

“Considering the performance of vodka, I do not believe that this will be easily reversible. We have exceptions: Tito’s is breaking all barriers, all records, but it is an anomaly, and under no circumstances reflective of the category.

“The vast majority of mainstream brands are struggling. A number of craft producers are doing OK, but not good enough.

“In the next couple of years, if the category embraces the vodka soda offering, which is lower in calories and more neutral, and shifts its direction towards provenance and a more casual premiumisation narrative, it could be a saving grace in the medium term.

“However, I don’t see a complete shift of these problems as they’re generational so will remain for a while at least.”

Earlier this year, Bacardi-owned vodka Grey Goose revealed plans for a “brand reset” to “reconnect” with consumers. The Spirits Business spoke to Grey Goose chief marketing officer Lee Applbaum about the vodka’s new direction in detail, and also about the need to revitalise the super-premium end of the category.

Elsewhere in the category, brands have been tapping into the burgeoning low-alcohol trend with line extensions, such as Diageo’s Ketel One Botanical range.