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Leading Vodka Brands Tap Innovation To Bolster Growth, As Smirnoff Maintains Slim Lead

January 16, 2020

“While vodka has slowed down, Tito’s remains on fire,” says Eddie Cruz, owner of six-store Miami retail chain Jensen’s Liquors. Cruz’s experience has been replicated throughout the U.S. off-premise, where leading retailers have seen Tito’s rise to become a top-seller in a relatively short space of time. As recently as 2015, Tito’s was at just 3.3 million cases, according to Impact Databank. This year, it appears poised to blow past the 9-million-case mark.

As Tito’s has developed into a juggernaut, many other leading vodka marketers have been struggling to keep their brands in positive territory. Excluding Tito’s, the vodka labels among the top 25 spirits brands in the U.S. combined for a decline of approximately 200,000 cases last year, even including the resurgence of the Ketel One brand—which has been reinvigorated by its Botanical extensions and saw a 3.8% increase to 2.4 million cases—as well as positive growth for Svedka and Pinnacle.

With the early success of the Botanical range—which has carried over into improved momentum for the core brand—Ketel One has leveraged innovation to achieve solid growth the past two years. Diageo is looking to repeat that approach on Smirnoff with the brand’s new Zero Sugar Infusions. Smirnoff slipped an estimated 2.5% to 8.8 million cases in 2019, barely outselling Tito’s to remain the largest-volume spirits brand in the U.S. Impact Databank projects Tito’s to become the overall leader by year-end, however.

While acknowledging that the Smirnoff Zero Sugar launch has been smaller than that of Ketel One Botanical to date, Diageo North America president Deirdre Mahlan recently told investors the company is catering to “a trend where consumers are very focused on zero sugar or low sugar and understanding what their ingredients are, and also the opportunity to have their spirits at less than full strength, which is the case with both Infusions and Ketel One Botanical.” Both brand extensions are at 30% abv.

Constellation-owned Svedka was among the few vodkas gaining ground last year, increasing an estimated 1.6% to 4.45 million cases. Svedka has received a boost from its Rosé expression, which has its own dedicated marketing under the brand’s “Bring Your Own Spirit” campaign. “It’s the largest marketing investment surrounding a flavor launch in the brand’s history, and we’ve seen strong early adoption in both the on- and off-premise,” says Jaymie Schoenberg, vice president of brand marketing at Constellation’s wine and spirits division.

Absolut is likewise aiming to bolster its lineup through innovation, most recently with Absolut Juice ($20 a 750-ml.), which debuted in Apple and Strawberry flavors and targets the Spritz occasion. “We’ll be adding a third flavor to the Juice range in the spring,” notes Absolut vice president Regan Clarke. Absolut was down an estimated 2.5% to 3.5 million cases in the U.S. last year. Like Absolut, Campari America’s Skyy brand, which is now at approximately 2.4 million cases and has been declining by low single digits, has been hampered by competitive pressure lately. Last year Skyy extended with a Cold Brew Coffee offering infused with Arabica coffee beans.

Grey Goose has taken a measured approach to flavor launches over the years, and brand owner Bacardi is now promoting the brand in the Vodka Soda cocktail. “The Grey Goose soda serves speak to the demand for light, refreshing drinks with no extra calories or sugar,” says global brand vice president Martin de Dreuille. Grey Goose has also looked to enter a wider variety of consumption occasions over the past year, with its “Live Victoriously” campaign. The brand has stabilized at approximately 2.3 million cases over the past two years.

E.&J. Gallo-owned New Amsterdam ranks behind only Smirnoff and Tito’s in the vodka market in volume terms. Last year saw the brand launch a multi-million dollar campaign called “Find Your Wins,” and release a pink lemonade-flavored vodka called Pink Whitney.—Daniel Marsteller

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