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Vodka Inches Upward, With Tito’s, Deep Eddy Carrying The Momentum

April 24, 2018

With growth concentrated among a relatively small cluster of brands, competition remains stiff in the U.S. vodka category. A few key players are faring well, but many others are facing challenges. Indeed, more than half of the top 25 vodka brands in the U.S. were either stagnant or declining in volume last year.

In the U.S., vodka depletions reached 77 million cases in 2017, according to Impact Databank, accounting for a whopping one-third of the total spirits market. Last year, depletions were up by just 1%, but since 2010, the vodka category has added nearly 15 million cases to its total. In recent years, interest in imported vodka has fallen off, with imports’ share in the U.S. slipping from more than 34% in 2010 to just above 31% in 2017, and consumers increasingly opting for domestic brands. Even within the domestic segment, though, vodka has been buoyed largely by the success of a single brand: Fifth Generation-owned Tito’s.

In 2017, Tito’s leapt by 40% to 5.8 million cases and crossed the $1-billion threshold in sales to join a rarefied club of billion-dollar brands that also includes Hennessy, Jack Daniel’s, Patrón, Crown Royal, and Smirnoff. The growth of Tito’s—paired with continued gains by fellow domestic players like New Amsterdam and Deep Eddy—has offset soft performances from other top labels, allowing vodka to add an aggregate 700,000 cases in U.S. volume last year.

“Vodka is still the largest spirits category, and while it’s not experiencing the same growth as whiskey, it’s still making low single-digit progress,” notes Carl Evans, vice president of marketing for spirits at Constellation, which markets Svedka, the fourth-largest brand by volume in the U.S. “We’re seeing consumers come back to vodka as they think about lower-calorie drinks, and within the mixology space, vodka is a great base mixer.” In the 12 weeks through March 25, vodka volume rose 2.5% in IRI channels, continuing its low single-digit growth pattern.

While Svedka managed to carve out 1.9% growth to 4.4 million cases last year, other Top 10 players like Smirnoff, Absolut, Burnett’s, Skyy, Pinnacle, Grey Goose, and Ketel One were all in decline. Besides Tito’s, the only vodkas among the top 25 largest brands in the U.S. to achieve double-digit growth last year were Heaven Hill’s Deep Eddy, which jumped 15% to 1.2 million cases, and Sazerac’s Platinum 7X, which rose 14% to 1.3 million cases. A handful of other brands ranking amongst the Top 25—including Stoli, Taaka, Seagram’s, and Sobieski—advanced by single-digits in 2017. Impact has a full report on the vodka category in its April 1&15 issue. —Christina Jelski

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