How long will the flavoured vodka craze last?

The endlessly innovative craze for new vodka flavours still has legs, as Andrew Catchpole discovers.

Vodka is now available in hundreds of different flavours, from Whipped Cream to Bacon

If Willy Wonka had liked a snifter, then the world of flavoured vodkas would have satisfied his wildest dreams. Obviously the vodka belt nations of Eastern Europe have a long tradition of steeping pepper, ginger, bison grass, vanilla, lemon, cherry and other fruits, roots and spices, in their favourite tipple. But the modern range of flavours now available on a commercial scale almost defies imagination.

The more ‘mainstream’ fruit and spice-infused vodkas remain the most popular (and biggest selling) variants. However, the category has witnessed an explosion of more esoteric offerings, such as coconut, cotton candy, black truffle, cupcake, bubble gum, green tea, marshmallow and even wild hemp seed joining the party. If vodka distilled solely from aromatic Viognier grapes and infused with Kaffir Lime floats your boat, then rest assured – it’s already on the market.

It’s a fascinating category, and one that has tripled in volume globally over the last decade (all figures IWSR). Moreover, while flavoured vodkas have grown to 4% of global vodka sales by volume, they have captured 8% of the value of this multi-billion dollar market. So far these sales have been biased towards the US, followed by other (predominantly) Anglophone territories.

“The reason why flavoured vodka represents much more value than volume is because they are more skewed towards high unit value markets such as the US,” says Maggie Peak, global spokesperson for Brown Forman’s vodka portfolio, which includes premium flavours like the natural fruit essence-infused Finlandia Frost range. “The US has been a key driver in terms of sweeter and novelty flavours and recent trends in the US show flavoured vodka growing four times faster than classic.”

The boom of so-called ‘candy’ vodkas in the States – those inspired by sweet, dessert-leaning flavours – has been fuelled by big players like Diageo whose Smirnoff has joined the fray with Fluffed Marshmallow and Whipped Cream. And, with the global vodka market performing sluggishly, the purveyors of flavoured variants have understandably continued to invest in this category.

Zubrowka is one example of a flavoued vodka capitalising on herbal flavous

“The US leads in vodka consumption because there are a lot of occasions where both straight and flavoured vodkas are consumed, and this is where the big opportunities still lie” says Claire Smith, head of spirit creation and mixology for Belvedere at Möet Hennessy.

“There is a real culture of mixing drinks in the US, whether at home, by the pool or in a bar, and flavoured vodkas really appeal because people can experiment themselves,” Smith continues. “Super premium brands like Belvedere are more about communicating the product’s quality, so they don’t have big volume sales, but what the candy vodkas are doing is really raising awareness of the category as a whole.”

Hayley Aldous, senior brand manager at First Drinks, confirms that the broader explosion in more off-piste flavoured vodkas continues to boost the category as a whole. Although like Smith, she highlights the more niche, premium end of the flavoured market, where Zubrowka’s Bison Grass vodka is positioned, and here tradition and heritage really counts.

“Flavoured vodkas are generally marketed at 18 to 40-year-olds; existing vodka drinkers who are looking for a different taste to add to cocktails or with a mixer, and these people like to explore different tastes and have a wide range of drinks that they consume,” says Aldous. “However, Zubrowka targets 25 to 40-year-old drinkers who are more discerning and who seek out more authenticity from their brand choices. What makes Zubrowka different is that it attracts people from other categories such as wine, gin or rum.”

Beyond the US, with its culture of mixing drinks, markets such as Canada, the UK, Western Europe and Australia are also experiencing growth in the flavoured vodka sector, though with different patterns emerging in terms of the flavours and styles preferred. Here there is more emphasis on fruit and the more established spice flavours, rather than the wackier recent entrants to the party.

In Eastern Europe, where there is a long tradition of home-made infusions using local herbs and spices, flavoured vodkas are considered more of a digestif. As such there’s a bias towards the more bitter, herbal and spicy end of the spectrum. However, in markets like Poland (where Brown Forman recently introduced Finlandia Spices) and the Ukraine, vodka consumption is static or even in decline.

In major Western European markets such as the UK, however, Pernod Ricard, custodian of Absolut, reports that the flavoured vodka category continues to grow. Here premium flavours are marketed as mixing ingredients, with the biggest uptake in the home. Yet in the on-trade, flavoured vodkas in the UK and Western Europe continue to be drunk as shots, with far less usage for cocktails than in the States.

Stoli Hot and Sticki are based on the brand’s original flavoured vodkas first launched in 1962

For Absolut the focus is firmly on driving more sustainable, longerterm growth at the higher end among more discerning consumers.

The Absolut Flavours portfolio, centered on Mango and Citron, has experienced an impressive surge in the UK, achieving 63% and 30% value growth respectively while the overall vodka market remains static. In the UK on-trade, however, flavoured vodkas are down 9.9% in volume according to Absolut, with value up by a modest 1.2% thanks to the country’s perennial tax hikes.

“In the UK the flavoured vodka category is increasing in popularity and represents a small but increasingly attractive opportunity in an otherwise saturated category,” reports Chris Shead, Pernod Ricard’s off-trade channel director for spirits. “While the vodka category as a whole is showing a mixed performance in take-home, flavoured vodka is outperforming the category with a volume increase of +1.2% and a value increase of +5.0%.”

Another sub-sector of the flavoured vodka scene is the emergence of ‘low-cal’ variants. Among them are Brown Forman’s Little Black Dress, Beam Inc’s Skinny Girl, Voli Lyte and Smirnoff’s low-cal sorbet flavours which Diageo launched recently in North America. All are aimed primarily at a diet-conscious and predominantly female market.

“There is substantial innovation in the ‘low cal’ space as witnessed by the emergence of new brands, and many retailers or chains are offering low-cal menus or sections as alternatives,” says Brown Forman’s Peak. “Vodka has the highest incidence of female spirits drinkers and occasions, so low-cal brands such as Little Black Dress continue to capitalise on this growth segment.”

However, as Peak warns, with so many flavoured variants launched onto the markets it can surely only be a matter of time before the sector reaches saturation point, with new flavours chasing diminishing returns as they become ever more niche in appeal, while cannibalising each other’s market share.

Val Mendeleev, chief executive of Stolichnaya’s owner SPI, agrees, suggesting the US market for flavours will contract and “go back to normal”, eventually refocusing on more established core ranges. Notably, Stoli’s 50th anniversary flavours, Stoli Hot and Stoli Sticki, are remixes of the first flavoured vodkas – Honey, and Herb and Pepper – originally launched in 1962. Both have been successful in the on-trade, especially Stoli Hot, which has been taken up by bartenders to create their own twist on a classic Bloody Mary. Such reinvigorated flavours also resonate with a current cocktail trend for nostalgia.

Flavoured vodka is clearly a category with some way to run. But certainly most of the significant players are aiming their marketing spend and new product development budgets at the higher, less esoteric end, looking for sustainable growth ahead of gimmickry. And interestingly enough, the majority of these premium flavoured vodkas are less Willy Wonka in style and more akin to those old-fashioned, homespun recipes that the vodka belt citizens have been creating since yesteryear.