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 »
Eisenhower Presidential Inaugural Souvenir 1953 Old Mr. Boston Brown Whiskey Bottle
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
# 1 CIGARETTE BABY COSTUME
#2 EBOLA VIRUS COSTUME
#3 FAT GUY KOOL AID COSTUME
#4 JACK DANIELS AND MARLBORO FATHER & SON COSTUMES
#5 SOVIET JACK-‘O-LANTERN CARVING
“This is something somebody is going to do, and we want to be at the cutting edge of it, and I think we are.”
— Distillery co-founder Keith Kerkhoff
TEMPLETON, Iowa, May 9 (UPI) — Just when it seemed like there was no way to make eating bacon an even more excessive experience, some folks in Iowa came up with a way.
The Templeton Rye Pork Project was started at the Templeton Rye Distillery in the hope of raising pigs that will taste like whiskey.
The 25 purebred Duroc pigs in the project were born in January 2014 and they are subsisting on a diet that incorporates distillery grain into their food. “As a group who appreciates both flavor and quality, we thought it would interesting to bring to market a selection of heritage breed pigs fed a diet using spent Templeton Rye mash,” according to the project’s website. Read the rest of this entry »