In a maturing market, consider balance when building your vodka selection

by jeffery lindenmuth

umors of the death of vodka have been greatly exaggerated. In an April 23rd story in the Wall St. Journal, Eric Felton dubbed vodka as passé, citing the decline of vodka cocktails in Food & Wine magazine’s latest cocktail recipe edition, Cocktails ’09. Indeed, many cocktail cogno- scenti have been attempting to vanquish vodka for years, berating it as overpriced, flavorless and a backbar bully to their preferred spirits. However, not everyone got the memo. Vodka remains the most consumed spirit in America, with 28% of total spirits sales by volume in R2008 according to the Distilled Spirits Council of the United States (DISCUS).

The landscape of this monolithic white spirit has changed dramatically over the past decade. After making signifi- differences that matter cant gains across all price points for five years in a row, No, vodka is not dead, but it has matured. Fortu- vodka stumbled slightly in 2008. According to DISCUS, nately it’s also left some childish ways behind. While sales of high-end premium and super-premium vodka, marketers once focused on numbers of distillations where 750 ML of this odorless, colorless and flavorless and filtrations, points that were sometimes difficult spirit can fetch as much as $70, actually dipped. While to quantify, the good news is that many vodkas now have the lucrative super-premium segment grew in excess of differences worth talking about. Because vodka can be 27% just two years earlier, achieving a five-year growth of produced so quickly and affordably, it is in a unique posi- 138.9%, it turned negative in 2008. Value- and premium- tion to respond to current market trends faster than any priced vodka posted modest growth. other spirit.

Clear differences

With its narrow flavor profile, the grow- ing diversity among vodka brands means new opportunities for smart retailers. The key to selling vodka is not to carry every the icons brand, but to assemble a manageable collec- With years of consistency and effective tion of quality products with meaningful dif- brand development, a few vodkas enjoy ferences that you can relate to customers. the privilege of being asked for by name. “I think that consumers are starting to Depending on the type of establish- expect more diversity in the vodka cat- ment you operate, it may be necessary egory,” says Gus McShane, bar manager at to stock one—or all—of the vodkas Copa d’Oro, in Santa Monica, which spe- that are common call brands. “We’re a cializes in market fresh cocktails. While great bar on top of a great restaurant, Copa d’Oro limits their selection to just 10 and we host hundreds of people every vodkas, McShane says, “I was quite surprised weekend. So, Grey Goose, Belvedere, that you don’t have to do a lot of explaining Stolichnaya, Absolut and Ketel One are to encourage people to try a new brand, or necessities for us,” says Adam Hodak, bartender at Osteria Marco in Denver. to trade them up. They want to be the ones “They all get requested and having who discover something new, and there are them is part of good hospitality,” he a lot of opportunities to do so with vodka.” adds. Hodak says he has no difficulty One repeatedly, we put them on our So forgetting about fancy filtration and introducing bar customers to vodkas out- back bar,” says Gus McShane. “Because dozens of distillations, what are some of the side of his top call brands, and therefore Ketel One is made with pot still distilla- attributes that motivate consumers in pur- adds a good variety of boutique brands tion, it has a slightly oily body and more chasing a vodka? and micro-distillers to the mix. taste profile, so we found a major brand According to Andrey Skurikhin, co- that fits for our theme. You don’t need to going green owner and shareholder in Stolichnaya, the carry every major brand to keep people proliferation of brands and category growth happy. We have just 10 vodkas, but each With a rapid turnaround for product in vodka has been a good thing for his one has a purpose.” creation, vodka has reacted quickly iconic brand: “Stoli has been in the U.S. Just as with consumer staple brands, to the sudden passion for all things since 1946, and it’s seen all the storms of some statistics indicate that in times of green. Among several new organic products the markets and of politics. It has a resilient recession consumers stick with trusted, and line extensions, 21st Century Spirits, character. Competition makes us more cre- entrenched spirits brands. In April, Grey ative and forces us to be more relevant and Goose announced that they had grown not to age with our old drinkers. Competi- their U.S. retail value share in the premi- tion is a very positive thing.” um/super-premium vodka segment nearly “When we first opened we did not two points year-over-year in the past 13 have any of the major brands, but after weeks, from 19.0% to 20.7% according to people asked for Grey Goose and Ketel Nielsen Food Drug Liquor.

the producers of Blue Ice Vodka, have just nal Blue Ice, which retails around $19.99. introduced their USDA–certified Blue Ice “I think the consumer is very aware of or- Organic Wheat Vodka, made from Idaho ganic and keyed into the price difference. winter wheat. “Our first inclination was to They are accustomed to seeing an organic go with an organic potato distillate,” avocado priced at $2.50 instead of Above: 360 Vodka’s eco advertisement says Kevin Egan, vice president of 89¢. However, I am not so sure the Below: Prairie Vodka’s approach to organics is modern sales and marketing for 21st Century retailers are aware. Ironically, it’s Spirits. “However, there are nearly actually a harder sell to the trade, 400,000 acres of Russet potatoes than it is to the consumer,” in Idaho, and of those, about 400 says Egan. are organic. There are just not Prairie Organic Vodka, from enough organic potatoes.” In or- Ed Phillips & Sons Co., is made der to retain their Idaho heritage, from organic Minnesota corn 21st Century decided on certified and also certified kosher, but ac- organic Idaho wheat. cording to Dean Phillips, presi- Priced $29.99 at retail, Blue dent and CEO of Phillips Distill- Ice Organic Wheat Vodka carries ing Company, the story is deeper a premium price over the origi- than a few keywords can relate. Clear differences

“To say ‘organic’ speaks to a small subset of consumers right now. Incredibly, we are raw materials shipping as much Prairie overseas as we Vodka can be made from almost any- are in the U.S., because in Europe they are thing: wheat, rye, corn, even grapes (used much more progressive in regards to com- for Cîroc Vodka), have been distilled into munity and sustainability. It is going to take vodka, so it’s a good idea to add variety of some time here,” says Phillips. raw materials to your vodka line-up. Ironi- While not organic, 360 Vodka from Mc- cally, a very traditional material is the most Cormick takes the green message even fur- often overlooked in many vodka selections: ther, with an aggressive recycling program, a potatoes. “Right now we have 217 vodkas commitment to purchase renewable energy from around the world, and only four are credits to offset their carbon footprint and made from potatoes. My favorite is Chris- an effort to plant trees in the 40 acres of tiania, a potato vodka out of Norway,” says land surrounding the distillery. The vodka’s Aaron Harmych, bar manager of Red Square entire package is produced from recycled at Mandalay Bay in Las Vegas. While only material, and all the paper is chlorine-free. about 3% of vodkas are made from pota- These are all things that matter to consum- toes, many bartenders, including McShane, ers, as their impressive growth illustrates. say potato vodka is the type most often re- And, proof that organic can be stylishly quested by customers, possibly because many sexy, is the Russian organic brand, Snow wanted to create a great vodka locally and want to avoid the gluten that they associate Queen Vodka. Picking up steam in the we are very much following the Tito play- with wheat products. U.S. after winning big at the San Francisco book, focusing on our local market and In developing a new super-premium World Spirits Competition, Snow Queen is keeping the brand authentic and fun,” says potato vodka, Karlsson’s made with organic wheat and pure spring Andrew Auwerda, president of Philadelphia Gold from Sweden, Peter water from the foothills of the Himalayas. Distilling, which has introduced Penn 1681 Ekelund, CEO and chair- Rye Vodka in its home state of Pennsylvania, man, decided to treat look locally as well as nearby New Jersey and Delaware. the potatoes more like Some of the most buzzed about While Penn uses organic rye grain, the wine grapes, focusing vodka brands of the moment are core message is that of a local product, with on separate distillates smaller local brands, and the fore- a front label that states, “Handcrafted in from 20 different po- father of the movement in terms of vodka Pennsylvania.” “The rye comes from four tato varieties. “Fifteen is Tito Beveridge, who created Texas’ first different farms within 200 miles of our dis- tasted about the same, legal distillery, producers of Tito’s Handmade tillery, and the fact that we use a locally two tasted awful and the Vodka, in 1997. grown crop is intended as our biggest point “With regards to being from Texas, be- of difference,” says Auwerda. ing a pot still vodka and being made from At Osteria Marco, in Denver, bartender corn, Tito’s has a lot of points of difference Adam Hodak does his finest hand-sell on Sil- that are easy to explain to people,” says Mc- ver Tree Vodka, made in nearby Commerce Shane. “I think other spirits companies and City, CO, while also offering Goat Vodka, brands have done a very good job of educat- made by Peach Street Distillery in Palisade, ing consumers, so they know what a pot still CO. “This has resulted in converting many is and that it makes a difference. Customers of our guests into purely Silver Tree drinkers. are very receptive to a vodka from a small Small distilleries and many local producers company.” In addition to Tito’s, McShane can’t afford to advertise, so they rely on the offers Hangar One made in Alameda, CA. strength of the product and establishing ad- While’s Tito’s enjoys almost honorary vocates, like informed bartenders,” he says. local status at small bars across the U.S., From Long Island’s LiV, (rhymes with this entrepreneurial vodka has also inspired “five”) to Maine’s Cold River vodka, the ease of other backyard brands that are successfully producing vodka makes it a favorite entry prod- cultivating similar local allegiance. “We uct for a growing number of small distillers. Clear differenCes remaining three were interesting, with dif- whether they are seeking a microbrew, tises the superiority of its “winter ferent characters, so that is where we con- or a biodynamic wine or unique vodka, wheat” a heartier, more fl avorful centrated our effort,” says Ekelund. they are in search of brands that are variety. Russian Standard Gold Ekelund is seeking to carve a unique not in every airport lounge. There is uses carefully selected Siberian niche, even among a small handful of potato an opportunity there,” says Ekelund. ginseng extract, while Russian vodkas, including larger brands like Poland’s Other producers are starting to Standard Platinum uses silver Chopin and 42Below from New Zealand. promote the value of their base ingre- fi lters to further refi ne the purity “The vodka market has an advantage in that dients. Finlandia swears by the purity of of the product, and the specially it is so big and offers many choices. There is their “six row” barley, which is pesticide- treated smoky bottle helps keep the a trend where all the big city bars have the free, thanks to Finland’s phenomenally cold vodka cool. same products. Vodka provides an area for winters which kills all bugs, and Russian It is wheat from Northern France that restaurants and retailers who want to differ- Standard’s Imperia—the number one super- yields the fi nest vodka, according to the team entiate. There is a new type of consumer, and premium vodka in its native Russia—adver- behind Emperor vodkas—a lineup which in- cludes distinct bottlings: Emperor, Winter Palace, Versailles and Imperial Collection. The renewed interest in rye—which is happening in the world of brown spir- the fl avor edge its as well—is fueling growth for several new-ish brands, such as Poland’s Select Ginger, Chocolate Vodka. Created by Daniel Olech with the and Wild Cherry. aim of offering “a superior vodka at a non- Van Gogh Vodka, luxurious price” it is one of the fastest- known for its diver- growing imported vodkas, according to sity of fl avors, aims Nielsen. Sobieski Vodka—which proudly for the sweet shuns marketing gimmicks or fancy pack- tooth with the aging—is another well-priced rye from Po- release of its Dutch land. Diamond Standard Vodka is Polish Caramel fl avor. rye, though at a considerably higher price These unique introductions point—an ultra-luxury offering, owing to aside, the fruit fl avors still dominate its unique production and fi ltra- the fl avor segment, as many recent tion system. line extensions attest: Absolut Others are adamant the se- unveiled Mango, Pinnacle premiered cret lies in blending. Ultimat Just as the vodka Root Beer; SKYY Infusions just re- Vodka from Poland, now un- market has matured, leased Pineapple; Seagrams came der the helm of Patrón Spirits so has its fl avor seg- out with Wild Grape; and Three Company, uses a combina- ment, with an array Olives added Three-O Bubble, of intriguing new a dynamic fusion of classic fruit tion of wheat, rye and potato offerings that are fl avors, to their line of 16 fl avors that to craft their spirit, a process anything but ordinary. includes Three-O Cherry, Three-O which they believe creates Sonnema VodkaHerb, Grape and Three-O Triple Shot a vodka with greater flavor the herb-infused Espresso. For summer sipping, complexity. grain vodka from UV Vodka has created a citrus Holland, is inspired trio of UV Blue Raspberry Lem- by the gin recipe from onade, UV Cherry Lemonade and packaging the 1800s (Holland, UV Lemonade fl avors. Belvedere and marketing incidentally, is the birthplace of gin) Vodka launched its newest, Black and is aimed at a more sophisti- Raspberry, in May; while Smirnoff still matter cated palate. Nemiroff Premium, recently expanded with Pomegran- While quality of what’s in the bottle may the Ukrainian vodka, brought their ate and Melon and is launching matter more than ever, there is no getting Honey Pepper fl avor to the U.S. Smirnoff Pear and Pineapple this around the fact that the vodka category market; it is an unusually delicious summer. Burnett’s, one of the is still very driven by marketing creativ- vodka infused with fl ower-fl avored larger players in the fl avor category, ity. For years running, Svedka remains the buckwheat honey, herbs and chili recently added Pink Lemonade as fastest-growing vodka in the world, due in pepper. The Polish brand, Alchemia, its 19th fl avor, proving that the fl avor no small part to their innovative futuristic has built its identity around its dis- category is keeping pace with the advertising campaign, recently comple- tinctive fl avor lineup, which includes curious consumer. mented by a cyber campaign. McCormick Distilling Company has focused on design Clear differenCes and convenience for its McCormick Vodka, sumer eye is the stunning package: an ac- offering the market’s fi rst lightweight plas- curate glass rendering of the human skull. tic bottle with a built-in handle. Likewise, The hundreds of vodka brands of the Iceberg Vodka’s bottles were custom-made, gold rush years may have seemed over- designed and shaped to look like a piece whelming to many restaurants and retailers of a North Atlantic iceberg. Its fl at side already short on shelf space, but this spirits makes it simple to store in a refrigerator or category is more dynamic and diverse than freezer. ever. Consider how each brand you em- Then there is the category’s most talk- brace fi ts into your overall picture in ed-about newcomer, Crystal Head Vodka, terms of price and quality, as well as dis- the latest project from Dan Aykroyd. With tinct attributes that hold appeal for your an appealing fl avor profi le, thanks to New- customers. With so much variety avail- foundland’s pure water, and an intriguing able, today’s bounty of interesting vod- story (it was inspired by 13 mysterious kas is a great way to customize your spirits crystal heads found around the planet selection, increasing customer interaction throughout history) what catches the con- and sales in the process. ■ Crystal head Vodka

lemonade fl avors, while something Sweet Carolina Sweet Tea Vodka offers a mint fl avor. Jeremiah Weed has sweet from expanded its offerings with Country Peach Sweet Tea, down south Sweet Tea with a Hint of Real Bourbon, and most recently, a ready-to-drink One of the newest vodka cocktail that combines trends hails from down sweet tea vodka and South. Sweet Tea, brewed lemonade. iced black tea with liberal Other brands on the amounts of sugar, has long market include Low been part of the region’s North America just down Pick” which is vodka and Country Sweet Tea identity and is quickly the road from our distillery, sweet tea,” explains Judd Vodka, Dukes, Teaka becoming one of the hot- so it seemed like an obvious Zusel, innovation director Sweet Tea Vodka and test new fl avors in vodka, choice,” he says. A few for Jeremiah Weed. “Now Burnett’s from Heaven Hill both above and below the years later, on tax day 2008, consumers can enjoy these Distilleries, which recently Mason-Dixon Line. Newitt and his partner, Jim drinks at home.” added its Sweet Tea Vodka “It’s a simple idea for Irvin, launched FireFly, the As a beverage, sweet as its 18th fl avor. the South,” explains Scott fi rst sweet tea vodka on the tea expanded nationally Newitt, one of the found- American market. thanks to brands such as ers of FireFly Sweet Tea Another newcomer in Arizona Beverage Company Vodka. “Sweet tea has the growing category is and McDonalds, who now been around in the South Jeremiah Weed. Known offers the drink nationally. Mix 1 1/2 oz. Jeremiah Weed since the 1860s and is historically for its bourbon The popularity of the drink Sweet Tea Flavored Vodka probably the largest selling liqueur produced in Weed, is being refl ected in bar with lemonade over ice. beverage in the region.” KY, the group decided that menus across the country. Garnish with lemon. Growing up in Louisiana, sweet tea vodka would be Many people enjoy sweet Newitt was raised sipping a perfect fi t for the brand. In tea vodkas on the rocks, the region’s signature drink. May, the group launched its with lemonade or with other Years later, while produc- 70–proof Jeremiah Weed fl avored iced teas. Most ing vodka on Wadmalaw Southern Style Sweet of the brands have added Island in South Carolina, Tea Vodka. “We saw the fl avors to replicate these he saw its potential as a interest coming from the on- cocktails. Hound Dog fl avor for vodka. “We had premise with people drink- Sweet Tea Vodka offers the only tea plantation in ing cocktails like the “Ice raspberry, peach and