Vodka: brands, premium expressions and flavoured variants lead the way

20 June, 2016

Amid the deafening buzz gin has created in the past few years, it is easy to forget that vodka is by far the biggest spirits category in the UK.

It is more than three times the size of gin and accounts for three bottles in 10 of all off-trade spirits sales, with Smirnoff the leading spirits brand by some distance. 

It is also in growth – sales climbed 1.9% in both value and volume in the past year (Nielsen, year to April 23, 2016). 

Growth is being driven by flavoured vodka and premium vodka – defined by Nielsen as products that are 20% more expensive than the average bottle. 

Analyst Marika Pratico, senior client insight manager at Nielsen, told OLN: “Flavoured vodka continues its steady growth year on year – up 6% in value terms and 2.9% in volume – suggesting that pure premiumisation happens in this sub-category.

“Premium vodka continues to grow in double digits, up 19.6%, and now accounts for 7.9% of total vodka and 67% of total vodka growth.”

Brands such as Cîroc, a partnership between Diageo and Diddy, or Puffy, or Puff Daddy, or whatever he’s called nowadays – the multimillionaire rapper, actor, fashion designer and all-round superstar, Sean Combs – are perfectly positioned to capitalise on these trends. 

It has carved out a niche as a blinging, aspirational drink with a range of successful flavour variants, and there are plans to capitalise further on the trend with this month’s release of Cîroc Pink Grapefruit – a UK exclusive. 

The variant is the seventh addition to the brand’s collection, joining Pineapple, Apple, Peach, Amaretto, Red Berry and Coconut.

Head of Diageo Reserve Nick Temperley says: “Cîroc is leading the way for innovation in the luxury vodka category and responds to evolving consumer tastes. Cîroc Pink Grapefruit is a fantastic summer spirit and we’re confident it will perform well in the on and off-trade as it lends itself so well to simple long drinks as well as more complex serves.

“We’re delighted to launch this variant as an exclusive to the UK and are committed to long-term brand investment to build a platform from which Cîroc can continue its success in this key market.”

Cîroc Pink Grapefuit is available as a 70cl bottle for the off-trade with an rrp of £38, leaving it perfectly placed to cash in on the trends developing within the category. 

Another brand enjoying strong growth is Absolut, according to its senior brand manager Rick Bennett-Baggs, who says it is up 13% in value and volume thanks to its premium position and success with flavours. 

“Premiumisation is a trend we can see happening across a number of categories and it has really benefited us,” he says. “We have grown volume without having to promote.”

Premium brands could be a tough sell within vodka as it is essentially a neutral grain spirit that is virtually tasteless. 

“It lacks the components that allow other spirits such as whisky and rum to differentiate themselves, such as ageing, the casks used for maturation, the blend of ingredients and so on, or the multitude of botanicals gin producers can promote,” adds Bennett-Baggs. 

“But vodka producers have done a fantastic job of marketing and brands such as Grey Goose, Belvedere, Cîroc and Absolut Elyx are able to command a high price point despite not offering the nuance of flavour you get in other spirits. 

“Whisky is very much on the nuance of the different products,” says Bennett-Baggs. “In the world of vodka they are very much brand builders. They don’t talk about products and subtleties in the way whisky brands do. Whisky is often drunk neat, whereas vodka is mixed or in cocktails.”

Premium credentials

Another way of enforcing a brand’s premium credentials is to highlight the purity of the water used to make it and the number of times it is distilled to give it a clean taste. 

Cîroc highlights that it is made from fine French grapes that are distilled a fifth time at the historic Distillerie de Chevanceaux, Absolut talks about winter wheat sourced solely from Åhus in southern Sweden, and Beluga says that its water is taken from 300m deep artesian wells in the bedrock of Siberia before a triple filtering process.

Brands are also careful to mention the top-notch ingredients used to make flavoured variants. Cîroc Pink Grapefruit, according to Diageo, is an “expertly blended combination of the smooth taste of Cîroc with real citrus extract from the peels and oils of pink grapefruit”.

Absolut has also benefited from being one of the early pioneers of flavoured vodka. “Absolut really cemented its position as the flavoured vodka brand. However, five years ago there was a huge global trend where other vodka brands started creating flavours,” says Bennett-Baggs. 

“That’s now peaked. Some of the weird and wonderful flavours, such as marshmallow, have gone. A number of our competitors are in decline and being taken out by retailers reviewing their ranges, but our flavours are in double-digit growth, and I would put that down to Absolut being the original flavoured vodka.”

Despite premium and flavoured offerings showing strong value growth, standard vodka is seeing volume outstrip value, showing it is heavily promoted, according to Nielsen. It is up 1.6% in value and 1.9% in volume. 

New craft vodkas entering the market might help swing the balance, if retailers can champion them and drive value into the category. One is Wild Knight, created by Matt and Steph Brown in Norfolk. It is single-distilled by hand in small batches, using English barley and water drawn from the ancient chalk aquifers that run under East Anglia.

“With Wild Knight we’re hoping to rekindle the nation’s love affair with vodka in the same way that gin has been reinvented in recent years,” says Matt Brown. 

“We want people to enjoy our vodka in its purest form and recognise the qualities and flavours that can come from an ultra-premium vodka, in the same way they would savour a good whisky. It’s time for English vodka to make its mark and we hope to be at the very forefront of that revolution.”

Gin’s rise to prominence is a bit of a worry for vodka producers, but they are confident in vodka’s long-term ability to hold on to its crown. 

“Gin’s resurgence has been incredible,” says Bennett-Baggs. “It is going to be stealing some of the share from vodka. But if you look at the numbers it’s not huge amounts and won’t change what we do.”   

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