Cocktails boost Diageo vodka sales

Diageo has attributed its double-digit vodka sales growth to a 300% upswing in cocktail consumption both at home and in the on-trade.

The UK firm’s fiscal 22 results released last week reported its vodka sales had soared by 11% in the year ending 30 June 2022.

Speaking to The Spirits Business, Dayalan Nayager, Diageo’s president for Africa, said: “The key thing we’ve seen with vodka is the growth of cocktails. You look at what’s happened with cocktails in the last two years, and it has massively exploded.

“From 2019 to now, cocktails have grown 300% in the UK, and if you look at the make-up of the cocktails, 50% of the top 10 most popular cocktails are vodka-based.”

According to data from drinks group AG Barr, Britons are now drinking cocktails in record numbers at both home and in bars.

During the nationwide Covid-19 lockdowns, sale of cocktails for at-home consumption rose by 44% year-on-year to be worth £92 million (US$112m), with vodka-based serves such as Porn Star Martinis, Espresso Martinis, Cosmopolitans and Long Island Iced Teas dominating consumer awareness.

“What we have seen is the trend of people getting into cocktails by making drinks from scratch at home over the lockdowns is now going back into the on-trade,” Nayager continued.

“We’ve seen big growth in cocktails in the on-trade, and off the back of that we’ve seen the growth of vodka coming through. We think that it is a sustainable trend and one that is going to continue.”

CGA’s On Premise report in May 2022 showed vodka sales totalled £516m (US$629m) in the first quarter of this year—24% higher than in the same period in 2019, when venues were trading as normal.

“Cocktails and the revival of late-night, high-tempo occasions have clearly worked in [vodka’s] favour, and it’s interesting to see growth tilted towards standard brands, who have made the most of the return of celebratory occasions,” said CGA client manager Matthew Meek. “But with no sign of a slowdown, there is headroom for growth right across the vodka category.”

The CGA report went on to say that 13.9% of British consumers now drink vodka out-of-home, with more than half (51%) of them aged 18 to 34.

Nayager believes the advancement of new products within the category is contributing to its popularity surge: “There’s been some great innovation in vodka. We launched Smirnoff Raspberry Crush in the UK for example, and 50% of the consumers in that category are new to vodka, so [the innovation] is helping to recruit new people into vodka.”

A CGA US On Premise report noted that cocktails hold potential for flavoured spirits, with flavoured vodkas now accounting for more than a fifth of all vodka sold in the US on-trade.

In April, we looked at how the war in Ukraine has created opportunities of discovery for vodka labels from outside of Russia.