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The Changing Face Of The US Imported Vodka Market

May 3, 2011

While nearly every major spirits category in the U.S. market lost momentum in the past few years, imported vodka has been a notable exception. Imported vodka’s performance actually improved in 2008, 2009 and 2010, advancing by nearly 3 million cases in that period. “The category is very robust and growing ahead of most others,” says Paul Duffy, chairman and ceo of Pernod Ricard USA, which owns longtime imported vodka leader Absolut. “While the picture is intensely competitive, it’s in the context of an expanding pie.” In 2010, Absolut enjoyed its best performance since 2006, growing by 3.2% to 4.63 million cases. That was particularly encouraging because it came amid a weak on-premise market. But the brand remains off its peak volume of 2007, having lost a half-million cases in annual sales from 2007-2009.

Absolut is not alone. In 2007, four brands dominated the imported vodka market: Absolut, Grey Goose, Stolichnaya and Ketel One. They held an aggregate volume share of more than 70%. By 2010, their share had fallen to 55%. The imported vodka category expanded by nearly 4 million cases from 2007-2010, but those four brands surrendered 690,000 cases in that period. Meanwhile, four other imported vodka brands—Svedka, Pinnacle, Three Olives and Sobieski—began to surge, aided by their competitive price positions. From 2007-2010 their combined share of the U.S. imported vodka category more than doubled, from 15% to around 32%. Imported vodka has grown by nearly 22% since 2007, but excluding those four brands, it has declined by almost 2%.

Flavors remain a key battleground. In 2010, Diageo North America extended its Cîroc brand with Coconut and Red Berry flavors, which have been credited with much of the upscale French brand’s impressive recent growth. Sales more than doubled in 2010 to 685,000 cases, despite a retail price that’s in the same range as Grey Goose. Grey Goose has introduced a few flavors over the years, but flavors comprise only around 5% of the brand’s sales.

Meanwhile, the top imported vodka marketers have diversified into lower pricing tiers. Bacardi began rolling out Eristoff vodka in the U.S. market earlier this year. Diageo North America has released Rökk vodka and four flavor extensions: Citrus, Raspberry, Apple and Orange. Retailing at around $15 per 750ml, Rökk sits slightly above Swedish counterpart Svedka and a few dollars below Absolut. “Consumer insights tell us people are looking for more choice in vodka,” says Adam Rosen, director of New To World Vodkas at Diageo North America.

US – Leading Imported Vodka Brands
(millions of nine-liter case depletions)
Rank Brand1 Importer Origin 2009 2010 Percent
1 Absolut Pernod Ricard USA Sweden 4.49 4.63 3.2%
2 Grey Goose Bacardi USA France 3.50 3.40 -2.9%
3 Svedka Constellation Sweden 2.76 3.27 18.5%
4 Ketel One Diageo North America Netherlands 1.85 1.86 0.8%
5 Stolichnaya William Grant & Sons USA Russia 1.84 1.80 -1.9%
6 Pinnacle White Rock Distilleries France 1.02 1.40 37.9%
7 Three Olives Proximo Spirits UK 1.25 1.39 11.2%
8 Sobieski Imperial Brands Poland 0.52 0.74 43.7%
Total Leading Brands2 17.21 18.49 7.5%
1 includes flavors

2 addition of columns may not agree due to rounding

3 based on unrounded data

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