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Top Luxury Vodkas Look For Turnaround

August 16, 2016

It’s been a tough ride for super-premium vodka in the U.S. market lately, with brands above $25 a 750-ml. declining by a collective 6% last year, according to Impact Databank. That performance saw the super-premium segment—which has an 8% share of the 74-million-case vodka category—fall below 6 million cases for the first time since 2011.

Diageo’s super-premium French import Cîroc encountered a dramatic fall in the U.S. in 2015, slipping 19% to 1.6 million cases after years of torrid growth. But the decline was largely due to the company’s decision to reduce shipments of new products, such as Cîroc Apple, under a new “replenishment model” that focuses on depletions rather than shipments. In the first six months of this year, Cîroc’s sales leapt by 95%, with Cîroc Apple providing a boost. Still, Diageo CEO Ivan Menezes wants Cîroc to become less flavor-focused. “The key issue for Cîroc in the U.S. is to stabilize the core and get less dependent on big flavors,” Menezes recently told analysts, adding that he’s eyeing “more disruptive” innovation rather than straight line extensions. “We’re out to broaden the franchise beyond the urban market. I expect in fiscal ’17 we’ll do better overall on Cîroc in the U.S.”

Super-premium rival Grey Goose is also eyeing a turnaround after averaging a 2% annual decline since 2010, according to Impact Databank. Last year, Grey Goose fell 4% to 2.7 million cases, and the brand is declining at low single digit rates in IRI and NABCA data year-to-date. But Bacardi USA is backing Grey Goose with new initiatives like this summer’s Boulangerie Bleu experiential campaign, which ties in with its existing Fly Beyond push. Additionally,Bacardi recently announced a new multiyear partnership with artist and entrepreneur Swizz Beatz for its entire portfolio. Bacardi CEO Mike Dolan recently told SND that the new alliance will keep marketing in sync with the younger generation’s priorities. “Swizz is not here as a celebrity or musician. He’s here as a guy who’s generating new ideas, new approaches for marketing, and thinking about how to present Bacardi, Dewar’s, Grey Goose and Martini in the best possible light,” Dolan said.

Meanwhile, Moët Hennessy’s Belvedere vodka has averaged 5% annual growth over the past half-decade and is now closing in on a half-million cases. Belvedere’s recent marketing initiatives have included a three-year partnership with Madison Square Garden, which will see the luxury vodka—and portfoliomates Hennessy and Moët & Chandon—featured during the legendary arena’s Concert Series.

From a smaller base, another Polish vodka brand, Chopin, which was re-acquired by Chopin Imports from Moët Hennessy in 2010, has made solid progress lately, rising 9% to over 100,000 cases last year. “There are many brands in our category and a constant stream of new entrants. Our approach is to highlight how marked the difference between vodkas can be and explain the heritage,” says Chopin founder and CEO Tad Dorda. —Kimberly Tharel

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