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Tito’s, Deep Eddy Drive Vodka’s $15-$25 Tier To New Heights

August 1, 2017

Amid all the buzz around brown spirits, vodka sales have been accelerating in the U.S. market thanks to an upward shift toward the $15-$25 segment. Last year, the market’s leading vodka brands priced at $15-$25 a 750-ml. grew a collective 9.3%, according to Impact Databank. That group—which includes Absolut, Tito’s, Ketel One, Stolichnaya, Deep Eddy and Three Olives—expanded by a total of 1.1 million cases in 2016.

Tito’s and Deep Eddy continue to be standouts in the $15-$25 range. In IRI data for the 24 weeks ending June 11, Tito’s was the top-selling spirits brand by value across all categories. That performance followed Tito’s 35% jump to 3.8 million cases in 2016, a year in which it posted a gain of almost 1 million cases and accounted for the lion’s share of the segment’s growth. Since 2010, Tito’s has averaged a 50% annual increase and advanced by a total of 3.4 million cases. Looking to maintain that momentum, Tito’s nearly doubled its ad spend to $14 million last year, according to Kantar.

Heaven Hill-owned Deep Eddy also continues to soar, leaping 42% to 1 million cases last year. The Texas-based label has more than doubled in volume since 2014, bolstered by a diverse flavor lineup including Straight Vodka, Lemon, Ruby Red Grapefruit, Cranberry, Peach, Orange and Sweet Tea expressions. To keep up with skyrocketing demand, Heaven Hill purchased a second, 194,000-square-foot distillery outside of Austin, Texas late last year that will bring Deep Eddy’s production capacity to more than 5 million cases annually.

While those two Texas vodka brands carve out strong gains, other major players aren’t standing pat. Absolut still leads the $15-$25 segment despite a 3.4% slide to 3.9 million cases last year, and benefited from the launch of a new Lime flavor this spring. Pernod Ricard North America chairman and CEO Paul Duffy recently told SND that the brand will make “bigger, bolder bets in terms of innovation” looking ahead, while continuing to seed upscale Absolut Elyx to create a halo around the franchise.

Stolichnaya is also looking to innovate aggressively, including with the launch of Stoli Gluten Free last year, and the debut of a new Crushed flavor range in April. Stoli was up 2.8% to 1.7 million cases last year. “We’ve been able to keep our price positioning solid,” notes Patrick Piana, CEO of Stoli Group USA. “We went back into TV advertising this spring for the first time in eight years with a two-month campaign conveying the quality of Stoli vodka: ‘Uncompromising Quality Since 1938.’ We’ve been consistent with our quality messaging over the past two years and it has shown results for us.”

Diageo’s Ketel One, which was flat at 2.2 million cases last year, is looking to bolster its on-premise business with a focus on popular cocktails. “One of the biggest trends in vodka cocktail searches during the past two years has been the Moscow Mule, so we’re working with our extended family of bartenders to perfect that serve,” says Ketel One marketing director Rodrigo Ortigosa.

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