Once again, vodka was the largest spirits category in the US last year, boasting sales of 80.6m nine-litre cases.
With the rise of tequila reshaping the spirits landscape, however, vodka has been forced to adapt and innovate to maintain its spot at the top of the market. In June this year, 70% of consumers in the country demonstrated a penchant for vodka-based ready-to-drink [RTD] beverages, establishing vodka’s role in the canned beverage space.
Vodka has also seen sustained success in the on-premise. While beer and wine have experienced consumption challenges in the channel, vodka has been on an upward trajectory within restaurants and bars.
Vodka in the US is currently led by mainstay brands such as Tito’s Handmade Vodka, Smirnoff, New Amsterdam and Svedka. Tito’s managed to lead in growth terms in 2022, adding nearly 600,000 cases, but the segment is being pushed forward even further by brands including Deep Eddy, Skol Vodka, McCormick Vodka and Western Son Vodka.
The rise of spirits-based RTDs
In recent years, RTDs have witnessed a remarkable ascent, partially thanks to increasing consumer preferences for convenient packaging. The trend was initially fueled by the malt-based hard seltzer craze, but has since evolved to focus more on spirits-based RTDs.
Vodka has emerged as the top base spirit of choice for this new segment.
This landscape has been significantly shaped by the popularity of E&J Gallo Winery's High Noon vodka-based seltzers. The brand's resounding success has led others, including Mark Anthony Group's White Claw, to introduce their own vodka-based offerings, boosting the segment's growth within spirits-based RTDs in the process.
White Claw has even decided to extend its reach from pre-mixed drinks to full-strength spirits, with vodka leading the way. Earlier this year, Mark Anthony ventured into the realm of spirits for the first time with its introduction of White Claw Premium Vodka. This strategic move underscores vodka’s inherent adaptability, as well as its popularity within the RTD space.
The revival of flavours
The rise of spirits-based RTDs has also led to a renewed interest in flavoured spirits extensions, including vodka. While flavoured vodka once caught the public eye with extreme options like bacon and bubblegum, the category’s latest iterations are marked by more subtle infusions.
Vodka brands are now offering variants that are heavily inspired by the global appetite for botanicals. Brown-Forman’s Finlandia, which is in the process of transitioning to a new owner, has introduced Cucumber & Mint and Wildberry & Rose options, while Diageo's Smirnoff is experimenting with more complex flavours like Spicy Tamarind.
While flavour is a worldwide trend, the US is currently leading the way. In 2021, the country accounted for 38% of the global market share for flavoured vodka. The next closest was Russia with 17%.
Flavoured offerings also tend to present a more approachable option for younger LDA consumers: The 21- to 34-year-old age bracket made up almost 30% of the share of drinkers for Absolut Flavored, while the same group accounted for nearly 40% share for Smirnoff Flavored.
Espresso Martinis trending
During the pandemic lockdowns, many consumers began experimenting with mixology at home. The interest in creating your own cocktails worked out well for vodka, as many consumers turned to Martinis as their go-to. An intriguing development in this movement is the revival of the Espresso Martini, a cocktail that has captivated many consumers’ palates.
As the on-premise opened up, the Espresso Martini trend took off, with mentions of the cocktail on Yelp increasing by 300% in the first six months of 2021. Indeed, according to data from CGA by NielsenIQ, the Espresso Martini was one of the ten most-ordered cocktails in US bars last year, bumping the Manhattan off the list. This movement further solidified vodka’s strength in the channel.
The Espresso Martini has become a leading example of how vodka’s versatility can lead to creative experimentation. The category’s adaptability, mixability and capacity to cater to diverse consumer preferences have propelled its growth, making it a prime candidate to continue meeting evolving consumer needs in spirits.
This article was initially published by Park Street earlier this month.
The role of flavoured extensions in vodka’s ongoing revival – Category Intel
