CLEAR CHOICES HOW DO VODKAS STAND OUT IN THE MOST CROWDED SPIRITS CATEGORY? By Jeffery Lindenmuth or the year 2002, the growth of vodka case sales again outpaced total spirits sales, growing 4.6 percent compared to 1.6 percent for total spirits. And F although industry execs have been gleefully rounding the figure for several years, vodka appears to have finally broken the barrier: Vodka legitimately comprised one in four spirits sales, a whopping 25.5 percent, for the year 2002. Super-premiums are especially hot with con- senior brand manager. “Cîroc is totally new and it’s sumers who seem eager to utter chic calls for their the only vodka made from grapes.” Puente says the martinis and even long drinks, mixing the priciest consumer zeitgeist is about “discrimination and pours with humble tonic or soda. This trend is great being discerning.” With its parallels to winemak- news for suppliers who attribute 44 percent of their ing and allusions to fine craftsmanship he believes revenue to such super premium brands that Cîroc delivers. account for only 24 percent of vodka sales volume. Monsell Darville, vice-president group market- The booming vodka category presents an irre- ing director for Bacardi, USA says, “When we decid- sistible and undeniable opportunity for any spirits ed to bring a super-premium to market, we didn’t company, as the continuing launch of about 30 want another ‘me too’ product. One of the recent brands each year proves. But with such competi- unique opportunities is the opening up of Estonia, tion comes enormous challenges. How do you which was the heart of the vodka belt; it was a free stand out in a category that is based on the very and open country and they have a phenomenal his- idea of being a neutral, flavorless, colorless, and tory of vodka expertise.” The result is Türi, a vodka odorless spirit? revival of a recipe dating back over 100 years. Among the newer entrants in the top end of Among the most seductive Türi signature the category is Cîroc, a first foray into vodka from drinks is the Baltic Sea Martini, garnished with Schieffelin & Somerset. “I would say the size and caviar-stuffed vodkas in a nod to the classic eastern the growth of the category is very intriguing to us, European pairing however, we got into this with some concern In addition to the brand’s provenance, because of the plethora of brands. We did our best Darville contends that Bacardi, USA’s distribu- to find a unique proposition,” says Efren Puente, tion power will ultimately weigh in. “The compe- APPARENT VODKA CONSUMPTION (Millions 9 Liter Cases) tition is extremely tight but it’s important to note that only a handful [of brands] have the Total % Total % means and capacity to live beyond a year or Spirits Change Vodka Change two. It requires an incredible sales force and 2000 148.6 — 35.0 — real patience. Unless you are an entrepreneur with a lot of money you can’t last very long in 2001 150.8 1.5% 37.4 3.9% this environment.” But entrepreneurs, by definition, are 2002 153.3 1.6% 39.1 4.6% intrepid. David Katz has cracked such New (prelim.) York hot spots as Le Cirque 2000, Lotus, Nobu, Vodka has grown much faster than total spirits. Halo and Serafina since introducing his Source: Distilled Spirits Council Economic & Strategic Analysis Department AHS Russian vodka: Zyr. Made from a blend of win- Associates ter wheat and rye, Zyr has a slight sweetness that reads as a vanilla edge and Katz prefers it chilled neat or on the rocks. Another Russian vodka is achieving suc- THE VODKA PERSONALS cess with grass roots direct-to-consumer mar- So many vodkas, so little time: Look for these brands keting by Frank Pesce Group. According to company presi- with interesting selling points and personality to spare. dent, Frank Pesce, he receives hundreds of inquiries daily about Cristall vodka, made at the distillery of the same name near Moscow. Part of the buzz stems from years of con- ABSOLUT As the number one imported vodka into the U.S., this fusion about the brand, which was originally sold in the Swedish import still catches the eye of those young at heart, and irre- U.S. as Stolichnaya Cristall. When Pesce acquired the sistably drawn to the witty and iconic brand. rights for Cristall, Stolichnaya replaced the label with a dif- Chopin/Belvedere Made from potatoes and Polish rye, respective- ferent product called Stolichnaya Gold. “It took three years ly, Chopin and Belvedere redefined what a luxury vodka is all about. to convince distributors and bartenders that Gold was not With a slight sweetness, smooth texture (thanks to 4 times distillation Cristall, but now we have finally gained that recognition. and charcoal filter) they still retain call brand status world wide. We were around 5,000 cases in 1997 and we’re now over 15,000 for the year ending 2002.” Cîroc French-borne. Fragrant and some might say “sweet.” Grape- At the end of the day, only the strong will survive, based; mixes well with others. Schieffelin & Somerset, $29.99. believes Frank Ragusa, co-owner of Ston Vodka, a new pre- mium single-gran vodka from Estonia. "There are a lot of Finlandia Call me a pure spirit, but never boring. New taller, slimmer vodkas that have come out that don't have staying power. profile, shows this old standby can still party. There are some brands that will remain very small niche Grey Goose For those in search of European elegance with products," he adds. By contrast, Ragusa sees Ston as having American roots, Grey Goose is the embodiment of style, luxury and the potential to become a large, national brand, primarily the ultimate Martini. because of where it falls in the price quality spectrum. Retailing for $19.99, Ston is premium without pricing itself Ketel One A product of the prestigious Nolet family: delicate, out of everyday usage. sophisticated and complex. For those who can appreciate fine Some vodka brands will go to legal lengths to preserve breeding. their point of differentiation in such a competitive market- place. Frïs, for examples, uses a “patented freeze distillation Seagram's Extra Smooth Vodka The name is a classic, but this which freezes out the impurities and fusel oils vodka is brand new. With a middle name like "smooth," this vodka is all about versatility, ideally suited to be mixed with juices, tonic, and which makes a smoother, cleaner spirit with less other soft drinks. burn,” according to company president Donald Hazlewood. The strategy seems to be working Skyy Vodka Feeling Blue? Let me cheer you with Citrus, Vanilla, with Frïs showing 40 percent growth each year Spice and everything nice. And you won't regret it the morning after. for the past two years. “ We have a point of product difference and it’s very interesting Smirnoff Its legendary beginnings may be lost in the obscurity of for the bar people and trade. And con- early 19th century Russian lore, but the world's largest premium inter- sumers do look for information,” says national vodka brand continues to make history with new flavors and Hazelwood. “Because of our process, we wildly successful Smirnoff Ice. don’t try to go against any specific competi- Türi Hails from Estonia, excellent family pedigree going back 100 tor or target audience. We have our strategy years. Adore caviar, blinis. Bacardi, USA, $29.99. and we’re sticking to the tactics that we have developed.” Vox Translating as "voice" in Latin, this pure wheat vodka is as sexy Part of this tactic will include flavor as it is smooth, turning up in cocktails at some of the most fashionable extensions, with a Frïs Lime already avail- venues around. able and more flavors promised every few “The competition is extremely tight but it’s important to note that only a handful [of brands] have the means and capacity to live beyond a year or two.” — Monsell Darville, vice-president group marketing director for Bacardi , USA months. The flavor fray has been a blessing for vodka, fueling a market that might have otherwise saturated long ago. In fact, fla- vored versions of the flavorless spirit now account for an esti- mated 23-26 percent of all vodka sold among premium and imported items. "We believe that in order to break out in this cluttered, com- petitive market, brands have to provide an experience," says Guillaume Cuvelier, managing director of Spirits Marque One, LLC, makers of Svedka Vodka. "You need a long-term brand building idea that creates an emotional connection with the user, both on-premise and off-premise." This summer, Svedka will introduce Clementine, Raspberry, and Vanilla and the advertis- ing behind the flavor launch will emphasize having fun and not being too serious. Rennie Solomito, brand manager for Allied Domecq’s Stolichnaya says, “I think flavors are here to stay.” Stoli was one of the first to put flavors on the shelf in the early 1980s, and their range continues to expand with the recent introduction of cranberry and citrus flavors. “Vanil has got people really excited,” says Solomito. “However, all of them are doing extremely well. Our flavors have been grow- ing at double-digits, almost 18 percent.” Solomito maintains the biggest issue for Stoli has been meet- ing demand, largely because all their vodka is shipped from Russia. “It’s all distilled in Russia and that’s why we’re having difficul- ty…We’re trying to avoid going into allocation, but we can’t bring it in fast enough.” Extreme Beverage Company promotes the potency of flavor in their four flavored offerings: Green Apple Infused, Cherry Infused, Lemon Infused, and Mandtango Orange Infused, which is blend of mandarin and tangerine orange flavors.