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Despite Tough Competition, Stoli Sees U.S. Turnaround

July 29, 2016

While aggressive competition is rife in the premium vodka segment, Stoli Group USA has led its namesake vodka brand back to growth over the past two years, reversing a multi-year decline. After sliding from 1.8 million cases to 1.5 million cases in the U.S. from 2010-2013, according to Impact Databank, the Stolichnaya brand rebounded to nearly 1.7 million cases last year, backed by a raft of new initiatives. Thus far in 2016, the picture has been mixed. Stoli has showed a sharp rise in IRI channels, up 19% to 100,000 cases for the 28 weeks through July 10, but was down by 0.6% to 136,000 cases in control states in the first half of the year, according to NABCA.

This April, Stoli debuted a new gluten-free vodka extension made of 88% corn and 12% buckwheat, tapping into rising demand for gluten-free products. Stoli Gluten Free retails in the competitive $20 segment along with the rest of the brand line. “As a company, we made a strategic decision to line-price our full product portfolio of Stoli premium vodkas, including Stoli Gluten Free, even though gluten-free products are traditionally priced at a higher price point,” says Russell Pareti, Stoli brand director.

The company’s focus on specific consumer segments—notably Millennials—has also been paying off. To combat challenges from other spirits categories, such as whisk(e)y, Stoli is going after Millennial males with a new #DrinkWhatYouWant digital campaign, which encourages males to drink the brand’s flavored expressions.

Flavors continue to be key for the Stoli brand, especially among Millennials. The company says a focus on traditional flavors—like orange, raspberry, vanilla and blueberry—is keeping the franchise competitive in the heavily saturated flavored vodka market. “Our flavor offerings give us the opportunity to meet regional tastes throughout the country,” says Pareti. Late last year, the brand also received a packaging revamp to further boost its Millennial appeal. The new Stoli bottles are taller and feature an embossed logo on the neck and color-coded labels for the flavored expressions. —Kimberly Tharel

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