Flavoured whiskey outpaces flavoured vodka

Imported flavoured vodkas are losing market share in the US amid growing demand for flavoured whiskey and homegrown brands, according to recent analysis.

Flavoured whiskey brands such as Jack Daniels Tennessee Honey are swiping market share from imported flavoured vodkas

According to Rabobank’s Spirits Quarterly Q1 2015, flavoured whiskeys, or whiskey-based liqueurs, was the “hottest growth segment in the US spirits market” in the first three quarters of 2014, while volumes of imported flavoured vodka fell by 5% to 1.1m nine-litre cases.

Rabobank claims that flavoured whiskies generated more than half of the spirits segment volume growth between January and October 2014.

This is a trend seen by a number of drinks groups over the past 12 months. Sazerac’s Fireball Cinnamon Whisky is one of the fastest-growing spirits brands in the US, while Jack Daniel’s Tennessee Honey has continuously boosted sales of its parent company Brown-Forman.

In the first 10 months of 2014 Irish whiskey and domestic whiskey, including flavoured Bourbon and Tennessee whiskey, grew volumes by 3.2% and 10% respectively, while brands categorised as “other imported whisky”, excluding Scotch and Canadian, increased 41%.

Rabobank also noted “intense” pricing pressure in the US premium vodka segment as Diageo becomes “more aggressive” in the pricing of its Smirnoff Vodka brand.

“Given the soft trends in many other global markets, spirits companies appear to be looking to the US to drive sales growth, which is helping to create pricing pressure in categories that do not have supply constraints,” the report reads.

Shift towards domestic brands

Figures also suggest that imported vodka is growing at a slower rate than domestic US vodka, both flavoured and unflavoured. US-produced brands grew 2.7% in the first 10 months of 2014, while imported vodka grew 0.4%.

Analysts claim the shift towards domestic brands is in part due to flavoured whiskey taking share from flavoured vodka, the majority of which is imported.

In particular, Rabobank identifies Tito’s Handmade Vodka and New Amsterdam as vodka brands which have “clearly outperformed” the category, adding more than 240,000 cases each in control states.

Of the US market in general, the report reads: “The 2014 holiday season and the start of the calendar year 2015 have seen continued, moderate growth of the spirits categories.

“The super-premium and flavoured American whiskey trends show no signs of slowing any time soon, while vodka’s volume growth will likely be largely driven by intense pricing.”

In total, volume growth of spirits sales in the US grew 2.1% to 33.6m cases.

Rabobank also recently reported that Scotch whisky exports continued to drop in 2014 as the category struggled against demand for “more innovative spirits” such as Bourbon and rum.