Does aquavit need a makeover?
Aquavit producers agree they need to educate consumers at home and overseas so the spirit can reach its potential. But they are confident their strategy will pay off.
*This feature was originally published in the December 2024 issue of The Spirits Business magazine.
Does aquavit need a makeover? Curiosity has been brewing among bartenders, particularly those of an ilk to seek out new, niche products. However, while Scandinavian spirit aquavit may be the talk of the town in the trade, the sales figures tell a different story.
Approximately 60% of consumption of aquavit is in local markets, notes IWSR Drinks Market Analysis. Aruna Braganza, market analyst at IWSR, says: “There was a decline in volume over the past two years in the Nordic region (Sweden, Norway and Finland).”
Denmark is aquavit’s biggest market, IWSR data shows, accounting for 35% of total volume share. Norway and Germany both account for 20% of sales volumes, while Sweden and duty free represent 11% each, and the US is responsible for 2%.
From 2018 to 2023, aquavit volume sales declined by a compound annual growth rate (CAGR) of 4%, and by 5% when looking at IWSR data from 2022 to 2023.
Nordics in decline
Most regions mentioned above were also in decline during this time, with just a couple of exceptions. Denmark experienced a CAGR volume decrease of 5% from 2018 to 2023, and 3% from 2022 to 2023. Norway, however, has fared better over the years with a CAGR increase of 5% from 2018 to 2023, and only more recently seeing a CAGR fall of 2% from 2022 to 2023.
Of all of the above markets, only duty free was in growth between 2022 and 2023, growing by a CAGR of 2%.
“In Norway, volumes are primarily from the inland regions, for both brown and white aquavit, depending on the season,” Braganza explains. “The category is largely dominated by major brands offering more affordable options. It has been reported that there has been an increase in Norwegian producers entering the aquavit market.”
And it’s not just happening in Norway. In 2022, Bex Almqvist opened her own distillery in Sweden, called Almqvist Destilleri. Alongside gin, aquavit is the core focus for Almqvist, who has been working this year to expand the reach of her flagship Rejmyre Akvavit. Her aim is to bring a modern touch to the aquavit category, while respecting Swedish tradition. According to IWSR’s Braganza, aquavit is losing market share in Sweden “due to its perception as a drink mainly for older generations”, and its focus on festive occasions like Christmas and New Year. As such, “the category struggles to recruit younger drinkers”, Braganza says – something Almqvist is also witnessing.
Almqvist says: “In Scandinavia, the perception of aquavit is that it is very old-school. It is not looked at as modern – and because it’s so embedded in culture, there is more work to be done there. But it is changing in Sweden as well because we have some bars of an international standard now, for example A Bar Called Gemma and Lucy’s Flower Shop, which are both using aquavit in cocktails.” However, there is a long way to go until this is considered the norm in Sweden, Almqvist admits, adding there is a reluctance among traditional drinkers to embrace aquavit in mixed drinks and cocktails. To effect change, education and encouragement will be paramount.
“People don’t know what aquavit is,” Almqvist adds about international markets. “And it can also be misunderstood, as there are different styles of aquavit, Swedish aquavit, Danish aquavit, Norwegian aquavit – they’re not the same. We need to showcase the breadth of styles to consumers, and show them the different flavours that aquavit can have; it’s a big job.”
Home and away
In its home markets, aquavit is often consumed with food. However, aligning with Almqvist’s previous point, Sune Urth, Copenhagen Distillery’s research and development director, also notes how sipping neat spirits at dinner does not come so naturally to drinkers outside of Scandinavia.
“For many non-Scandinavians, the thought of drinking a clean, neat spirit with food is somewhat alien, so there has been a big project across the industry – and at Copenhagen Distillery – to develop a cocktail culture around the spirit. For anyone trying something new, it’s important to tread lightly at the start, and add an element of familiarity so they don’t feel completely in the dark.”
In Wales, Silver Circle Distillery is seeing interest in aquavit grow, particularly in the on-trade. Bartenders often lead the charge when it comes to new drinking trends, so increasing their support will be important for the category’s future.
“With gin starting to slow down, aquavit has a chance to step into the spotlight,” says Nina Howden, co-founder of Silver Circle Distillery, which makes aquavit, gin and vodka. “It’s like the next logical step for people who love gin but want to branch out. Aquavit has intriguing botanicals but is different enough to feel like a new discovery. Our focus is on helping people understand what makes aquavit special – how it’s made, its history and how versatile it is in cocktails, or even just sipped neat. The UK market is full of adventurous drinkers, so the timing feels right.”
Nordic drinks company Anora Group, whose portfolio includes Linie and OP Anderson aquavits, agrees the spirit will be able to play gin’s success to its advantage.
“Given that aquavit is relatively unknown outside of Northern Europe, it is important to build awareness and understanding of the category,” explains Mika Raukko, marketing director, Anora Group. “We are dedicated to continuously developing the aquavit category and enhancing our brands. Preserving the cultural heritage and traditions of Scandinavian aquavit is crucial, yet equally important is modernising it to demonstrate its relevance at dinner tables and in cocktails today.”
But the aquavit category may not want to hedge all of its bets on acquiring fatigued gin drinkers. According to IWSR Bevtrac, in the US a third of gin consumers would choose vodka if gin were not available. In Germany, more than a quarter of gin drinkers would choose still wine if gin was unavailable.
What is encouraging, though, when speaking to various aquavit producers, is there does seem to be agreement about the best way to grow the category globally. Winning the on-trade is part of the battle – and it’s one that has, to an extent, been won. Now the real work begins to help that seed of interest grow.
“What aquavit needs now is for people to try it and get educated,” Almqvist says. “It’s great to now have people experimenting and making aquavit around the globe, so people can try it and learn more. We’re in a place where every little helps.”
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