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Sobieski Battles Pricing Pressure, Targets On-Premise Expansion

May 28, 2013

In 2011, Imperial Brands’ Sobieski became the fastest vodka brand to date to achieve shipments of 1 million cases in the U.S. But as other accessibly-priced imported vodkas have further proliferated in the market, Sobieski ($11 a 750-ml.) has faced challenges in the form of increased competition and intense pricing pressure. After rising by nearly 50% and 25% in 2010 and 2011, respectively, the brand’s growth slowed to just 3.2% last year.

“The pricing competition is still fierce, and some ‘mid-priced’ and even traditionally higher-priced brands are discounting quite heavily,” says Timo Sutinen, vice president, marketing and business development for Imperial Brands. Sobieski’s key competitors include major players like Constellation’s Svedka and Beam’s flavor-focused Pinnacle, as well as small but growing entries like Brown-Forman’s Finlandia and Diageo’s Rökk.

Seeking to hedge against the crowded retail market, Sobieski has shifted some focus to the on-premise, which currently accounts for around 15% of its U.S. business. “During the first few years we concentrated almost totally on the off-premise, but recently we’ve started expanding in the on-premise with considerable success,” adds Sutinen. Key on-premise growth areas for Sobieski include New York, New Jersey, Illinois and Michigan, among others.

Additionally, the brand has increased emphasis on its 11 flavored entries. Sobieski’s most popular flavored vodka is its citrus-infused Cytron, but the brand is also seeing good traction for its recently released Toasted Coconut and Lemon Meringue expressions. Flavors currently make up just a 10% share of Sobieski’s business, and Imperial Brands believes it has plenty of upside in that department, with a couple more flavors now in the pipeline.

“We foresee expanding by single-, and perhaps double-digits during the next few years,” says Sutinen. “Premium imported vodka keeps gaining share from domestic vodka and other spirits categories. But we’ll need to stay inventive and current.”

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