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.