Vodka is the biggest, but what's next?

Many, perhaps blindly, don’t have the same enthusiasm for vodka as they do for other spirits, but the liquid is by far the biggest category within spirits and deserves more attention.

Vodka delivered £1.87bn in value to the spirits category, equating to almost a third (29.3%) of total spirits value sales according to CGA OPM MAT Data to 16 June 2018.

That’s somewhere close to double the sales of the second biggest-selling spirit whisky, which has a value of £1.07bn.

Though vodka still maintains the top spot, gin’s challenge has played a hand in a volume decline of 2.3% in the past year, the same CGA data shows, equating to a drop in sales of 44,000 nine-litre cases.

On the other hand, as in many other alcohol categories, vodka’s value sales are in growth, up by £23m compared with the previous period.

Premium vodka sales up​

Driving value sales up is premium vodka, which has seen volume sales rise by 4.8% and value sales increase by 6.6%, making the segment the hero of the category.

Yet, despite this uptick, premium vodka only makes up 18.3% of the total vodka category, which is low in comparison to other spirits categories.

But this minor contribution from premium could soon turn if Ketel One’s recent performance is anything to go by. The brand is a stand-out performer and has grown its value by 111%, CGA OPM MAT Data to 16 June 2018 shows, adding near £41m in value to the category.

However, with the bulk of sales still coming from the mainstream well-known brands, such as Smirnoff, much of mainstream vodka’s decline has been attributed to shifting consumer trends.

“The way in which people socialise has had a big impact on vodka, whose traditional heartland was in late-night venues frequented for big nights out,” says Diageo senior category strategy manager, on-trade, Clare Moscrop.

“As consumers move towards more lower tempo, early evening occasions, vodka must play on its versatility and adapt its offering to continue to be relevant.”

Vodka’s purity credentials​

To tackle this, brands are playing on vodka’s purity credentials and matching with low-sugar mixers to draw in drinkers who are looking for something lighter on calories but with a refreshing taste. The Smirnoff Soda Smash is one example of this – Smirnoff, lime, soda and ice.

Former favourite, fruit vodka, is also donning healthier credentials. “Flavoured vodka, which has seen a significant volume decline over the past three years, is also making a move away from sweet, sugary flavours like toffee and salted caramel into natural ingredients and flavours,” Moscrop adds.

Absolut recently launched Absolut Juice Edition using fruit juice and natural flavours, and over in the US Ketel One launched Botanicals – a range of vodkas distilled with real botanicals and infused with natural fruit essences.

Ultimately, the key to winning more vodka pounds from consumers rests on building better stories around the spirit, which has too long been considered an odourless and colourless liquid.

This might come from stories about provenance, as with Ketel One’s family-made craftsmanship and heritage messaging, or through bigger social messaging, like that of Smirnoff’s We’re Open campaign, which is driving change towards inclusivity.

To some, vodka may appear to lack innovation, but there is actually a lot going on in the category, which has much to offer and show.