This appeared in Harper’s Wine and Spirits magazine earlier this year.
It seems like not a day goes by without the launch of a new gin. I thought we’d reached peak gin two years ago but it shows no signs of slowing down. People are not only buying these new products but also talking about them when out drinking and on social media.
It’s the kind of genuine engagement that vodka would kill for. Matt Bruhn Global Brand Director for Smirnoff has been quoted as saying that the Britain is a ‘tough market’ for them. Stuart Westwood Product Marketing Manager at Matthew Clark wholesalers said “standard vodka sales are in decline by around 11%”. Absolut in particular have been hit hard. Pernod-Ricard, the parent company, had to write down 652 million euros on global sales.
They haven’t been helped by badly-conceived products such as Absolut Amber, an oak-aged vodka. This used oak chips just like a cheap wine rather than barrels. It picked up some terrible reviews and was quickly withdrawn. Absolut have been particularly affected by the decline of the flavoured spirit market. Stolichnaya have drastically streamlined their flavoured offerings in response. “I think flavoured is on its way out, the big brands have over saturated flavoured vodkas” Nik Koster from Garnish PR, a specialist drinks agency, told me.
We shouldn’t get too carried away though: “vodka is still the clear number one, with over 32% share of the spirits category compared to gin’s (ever increasing) 9%” says Stuart Westwood. Nik Koster agrees: “Smirnoff is still the biggest selling spirit worldwide and I don’t see that changing soon”. Worldwide Smirnoff sold 9.7 million cases (down 1% on previous year) cases and Absolut 4.6 million cases (down 1.5%).
At the top end of the market. CÎROC a grape-based vodka who have Puff Daddy (or is it P Diddy?) as their brand ambassador is rapidly growing. Guy Dodwell, Sales Director for the Off Trade, Diageo: “our ultra-premium vodka brand, CÎROC, is up by 205%” . According to a 2015 IWSR report the luxury end of the market is still experiencing good growth levels. Beluga, a high end brand with hand finished bottles, is seeing double digit growth according to Katie Warren their Group Marketing Manager.
But there might be uncertain times ahead for the super premium market. The rise of gin, and return of amari, vermouth, bourbon and rye, show that people once again want strong flavours. The cocktails that are popular now, the negroni, the martini, the old-fashioned, reflect this. The fruit-based cocktails that made vodka are out. “We don’t sell a massive amount (of vodka) in our bars, “ said Max Venning operations manager at London bars, Drink Factory, 69 Colebrooke Row & Bar Termini. When I asked Ian Goodman, formerly head barman at the Oxo tower and now with new bar Darkhorse in East London, which cocktails he liked to make with vodka, he replied ‘none really. . .. Vesper at a push.’ This lack of interest is reflected on the high street: a PR representing All Bar One told me that they were concentrating on gin when I asked them for their take on the vodka market. Vodka is seen as a reliable workhorse rather than something to get excited about.
You can see why barmen might be bored: even the most expensive brands trade to some extent on lack of flavour. All the stuff about filtering and triple, quadruple or in the case of Ciroc, quintuple distillation, are designed to make them as smooth ie. bland as possible. The owner of Bob Bob Ricard, who stock Russian Standard vodka, Leonid Shutov, is quoted as saying: “flavour in vodka indicates you can’t afford a more expensive drink.” The top Russian Standard that they stock is filtered through quartz, for some reason.
They’re a tiny percentage of the market but there are some vodkas out there offering something a different. Some are a side product of the gin explosion: “By default many gin producers also create excellent vodkas” said Liam Cotter Senior Project Manager with events company Heads, Hearts and Tales. Adnams, the Suffolk brewer, produce some vodkas though their gins outsell them by ten to one. Head distiller John McCarthy is doubtful about the UK artisan vodka market ‘you can’t make a fortune selling high end vodka in UK. From our experience majority of British public aren’t willing to pay premium for vodka.’
William Borell, founder of Vestal who make Polish potato vodka, disagrees. He started in 2009 with 2,000 bottles and now produces around 40, 000 bottles a year. Vestal is now stocked in some of the world’s top bars and Michelin-starred restaurants. He has noticed a weariness in the on trade with gin which will at some point percolate down to the consumer. Barmen are looking for something new and weightier, flavourful vodkas might be it. Nik Koster has set up a festival called Vodka Rocks to try to reengage the trade and the public with vodka.
Other brands proving popular with the on-trade are Aylesbury Duck from 86 Company in America and Konik’s Tail from Poland. The key is letting that quality of the raw material shine so there’s no heavy filtering or triple distillation. These are vodkas that you should sip neat and not too cold. They’re more like new make single malt whisky than traditional Russian-style vodka. The line between vodka and whisky is blurring with some distilleries such as Highland Park releasing unaged whisky (though they can’t call it whisky) and Vestal producing a barrel-aged vodka (superb, a far cry from Amber Absolut). They also produce vintage vodka (from a single harvest) and even do varietal vodka (from a single potato variety). Other innovations in the sector include Babicka, a wormwood-infused vodka from the Czech Republic and a botanical-infused London Dry Vodka, produced by gin distiller Sacred.
The big four, Pernod-Ricard, William Grants, Diageo and Bacardi, are fighting back: “The birth of so many artisanal or craft brands certainly creates a hell of a lot of excitement, but the onus is on the big brands to re-invent their image and demand attention back” said Liam Cotter from Hearts, Heads and Tail. Absolut have just launched Elyx made with wheat from a single estate. The spirit is distilled in a 1920s copper rectifier just as with craft gin. Just to be sure though they’d roped in Chloe Sevigny and put it in a super glitzy bottle. “Provenance, ‘craft’ and something with a point of difference will continue to drive any green shoots in the category” Stuart Westwood told me.
Vodka’s success in the 80s and 90s was built on a lack of flavour and history. It was a blank canvas onto which marketers could project their ideas. Brands such as Absolut epitomised this with their brilliant advertising. Now the market has moved on and some brands are looking dated. Vodka today is in a similar position to beer with huge but declining brands dominating sales and a small (in vodka’s case miniscule) though rapidly expanding craft sector. In the next few years, we’ll start to see more and more premium and luxury vodkas taking their marketing and perhaps even production cues from the new challengers. Just as with beer, some of the stronger craft brands will be snapped up by the big boys. Despite sluggish growth overall, it’s an interesting time for vodka. Though there will always be a huge market for something tasteless and alcoholic, competition is likely to push up quality at the top end. Potentially, people could start taking vodka as seriously as they do gin or even whisky.