Vodka is so 2012
Peter Evans writes: Sales of the colorless, odorless spirit have slowed substantially in the U.S. in the past two years after more than a decade of roaring growth.
“We are seeing a generational shift away from vodka.”
—Jonny Forsyth, global drinks analyst at research firm Mintel Group Ltd.
Tired of lurid flavor extensions—from fluffed marshmallow to menthol tobacco—and at the limit of what they are willing to pay for upscale versions, drinkers are increasingly choosing bourbon or tequila over vodka. That spells bad news for the world’s biggest distillers.
Vodka Sales Fall as Drinkers Raise Glass to Whiskey
Vodka makes up a quarter of U.S. spirits sales by value, and the slowdown is starting to eat into profits at liquor companies. North American sales of Diageo PLC’s Smirnoff brand declined 8% in the six months ended December, contributing to an 18% slide in overall profit.
“Vodka’s identity crisis comes after a prolonged period of success. For years, flavor extensions helped drive sales, while bottles of triple-filtered vodka sold at $30 swelled the profits of major distillers.”
Pernod Ricard SA said late last year that its Absolut brand is struggling in the U.S.
“Taste profiles have moved to appreciate whiskey more,” said Ivan Menezes, Diageo’s chief executive, in an interview last week. “It’s a trend that’s been building for a few years.”
Experts say the attributes that first attracted consumers to vodka now appear to be turning them off. Specifically, the anonymity that means vodka can be mixed with almost anything to add an alcoholic kick is becoming less appealing. Drinkers are instead turning to whiskey for its perceived greater depth of flavor.
“Taste profiles have moved to appreciate whiskey more. It’s a trend that’s been building for a few years.”
— Ivan Menezes, Diageo’s chief executive
Attempts by marketers to plug that gap with flavor variants are running out of steam: There are more than 600 flavors of vodka available to U.S. consumers, but demand growth decelerated in 2014, according to Bernstein research.
The biggest distillers have been hit the hardest by the shift in taste. Sales of Smirnoff vodka flavors—a roster of more than 30 products, including root-beer float and whipped cream—are in decline in the U.S. Pernod Ricard has admitted its “Oddka” experiment—with flavors from salty caramel popcorn to fresh-cut grass—has fallen flat.
Total U.S. vodka sales increased 1.9% in 2013, compared with 2.7% growth in the wider spirits industry, according to industry body IWSR—the first time since 2000 that vodka has underperformed the sector average. Analysts expect a similar result when 2014 figures are released.
“Part of the problem for vodka has been attracting younger drinkers. Once seen as an exciting alternative to the brown spirits favored by their parents, vodka is now viewed as too mainstream for newly legal drinkers.”
Big liquor companies have seen their share of U.S. vodka sales eroded by intense competition. Supermarkets charging low prices for smaller brands have stolen customers from midmarket labels like Smirnoff and Absolut. While sales of superpremium vodkas such as Diageo’s Ketel One and Cîroc have held up, the brand that kicked off the superpremium trend in 1997, Bacardi Ltd.’s Grey Goose, has suffered a sharp decline.
Russian vodka has also suffered from the slowdown. In 2013—the latest available year—the amount of vodka imported from Russia into the U.S. dropped 70% from the prior year, according to the Distilled Spirits Council of the U.S. The most popular Russian label—Stolichnaya Premium vodka, known as “Stoly”—fell out of the top-five best-selling brands in 2013.
At the same time, an explosion of craft distillers is encroaching on sales. Diageo says there have been more than 200 new vodka brands launched in the U.S. in the past two years.
Part of the problem for vodka has been attracting younger drinkers. Once seen as an exciting alternative to the brown spirits favored by their parents, vodka is now viewed as too mainstream for newly legal drinkers in the U.S., analysts say. Read the rest of this entry »
We toured 12 distilleries in a five-day blitz, asking everyone we met to walk us through the bourbon-making process. Here, you’ll find all of the steps that go into making America’s unique take on whiskey. Watch and learn.
— Washington Post (@washingtonpost) November 5, 2014
White House Officials: ‘Very Significant’ Immigration Executive Actions Needed for the ‘Survival of the Democratic Party’Posted: July 26, 2014
From The Butcher’s Notebook: White House officials said on Friday that President Barack Obama will enact “very significant” executive actions on immigration at the end of summer, “not because it’s good for America, but because it’s essential for the survival of the Democratic party.”
“American voters are beginning to figure out that progressive policies don’t work, because they’re not designed to work. There’s only so long we can get away with this before voters rebel, and special interest groups stop donating money. We can’t change American’s minds about this. We can’t win the argument, so we have to change the voters,” said a Democratic campaign official, speaking informally, on the condition of anonymity. “Can we get another drink over here?”
“The president assured us that pissing off Republicans is personally more important to him than policy success.”
“Look. We may not be able to change the voters overnight. But we can sure as hell accelerate the process, by granting citizenship to the Democratic voters of tomorrow,” adding “without it, the Democratic party has no hope in hell of surviving past the next twenty years.”
Sitting in a corner booth in the lounge of a Chinese restaurant in suburban Washington D.C., after a few lines of coke, a few tabs of MDMA, a few injections of sodium pentathol, and a fresh round of drinks–mistakenly assuming he was speaking off the record–the senior White House official ventured further.
“Democracy is a means to an end. You need it, temporarily, to get your party in power. Once you do that, you have the tools to undermine it, a stage at a time. Not all at once. Otherwise, people catch on.”
“Look. Our opponents are at a disadvantage, because they’re all hung up on ‘playing by the rules’. You know, the constitution, rule of law, separation of powers, all that idealistic, parchment-paper 18th-century crap. We’re not interested in ‘rules’, and ‘laws’. They are a barrier to our goal of accumulating power. That’s how the big boys did it, before the American revolution.” Read the rest of this entry »