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Exclusive: Vodka Quietly Continues To Carve Out Growth In U.S. Market

January 20, 2015

Amid the U.S. market’s much-publicized whisk(e)y renaissance, vodka continues to achieve consistent growth and remains the most popular spirits category by a solid margin. In 2014, the U.S. market’s top 10 vodka brands carved out an aggregate advance of around 2% to approximately 37 million cases, according to Impact Databank. The top 10 account for roughly half of total U.S. vodka sales.

Seven of the top 10 vodka brands posted growth in 2014, including Svedka, Grey Goose, Skyy, New Amsterdam, Burnett’s, Ketel One and Cîroc. However, the top two sellers—Smirnoff and Absolut—weren’t so fortunate. Smirnoff was down by 1% to 9.7 million cases, while Absolut fell by 1.5% to 4.6 million cases. Diageo recently decided to reduce prices on Smirnoff in an effort to return the brand to growth, while Pernod Ricard has unveiled a series of recent initiatives on Absolut, including the rollout of its high-end Elyx extension, a redesign of its entire flavor range and the launch of a new marketing campaign, among other moves.

Beam Suntory-owned Pinnacle also failed to advance, as it fell by 2.1% to 2.7 million cases. The dropoff represented a dramatic shift for Pinnacle, which just a few years ago was the U.S. spirits market’s hottest brand, as the surging popularity of its Whipped line propelled it to a 2-million-case gain in yearly sales from 2008 to 2013. Pinnacle’s slowdown indicates that flavored vodka’s best days may be behind it. However, Heaven Hill’s Burnett’s—which also relies heavily on flavors—achieved a 3.2% gain last year.

New Amsterdam and Cîroc, two of vodka’s biggest growth engines, have also been bolstered by flavor extensions. With a competitive price (around $14) that belies its sleek packaging, E.&J. Gallo’s New Amsterdam emphasizes accessibility. On the other hand, Diageo’s Cîroc, with its ultra-premium positioning (approximately $30) and spots featuring part-owner Sean Combs, has long evoked exclusivity. However, Diageo recently introduced new ads aiming for a more inclusive approach.

Meanwhile, Tito’s fell just shy of vodka’s top 10, but if it can sustain the eye-catching growth it has enjoyed in recent years, the brand should crack the list by year-end. While lawsuits have been launched questioning Tito’s “handmade” claim, they have done little to thwart the brand’s upward momentum, as it finished 2014 right around the 2-million-case mark—a stunning rise from its 200,000 cases in 2007.

 

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