Glossing new product launches within the US vodka category from January 2010 to mid-May 2013, Mintel’s Global New Products Database (GNPD) reveals that the share of flavoured vodka launches versus plain/unflavoured vodka has fallen significantly in 2013 to date.
In 2010, plain vodka cornered 44.14% of the new launch market, but (unflavoured and less fancied), its share fell to 39.72% in 2011 and 32.59% in 2012, at the expense of fancier flavoured cousins.
But Mintel’s latest data shows that plain vodka has rebounded strongly in 2013 to date, and now holds a 51.67% new launch share vis-à-vis flavored varieties, where wackier options include the likes of Diageo’s Q4 2011 Smirnoff launch Fluffed Marshmallow.
It does not automatically follow that flavored vodka growth will stall – in 2012 DISCUS said such products accounted for around 21% of all vodka sold – but it is one KPI suggesting that industry is perhaps starting to grow a little cautious in respect of growth.
Distilled Spirits Council of the United States (DISCUS) data from 2012 notes that 65.2m nine-liter cases of vodka were sold in 2012, and in 2012 flavored vodkas grew 19%.
And Canadean data sent to BeverageDaily.com shows that flavored vodka sales have still seen growth in 2013 to date, up 6.7% to 104m liters, while unflavored sales rose 5.4% to 526m liters.
‘You can argue vodka’s gone too far…’
Mintel senior food and drinks analyst, Chris Wisson, told BeverageDaily.com yesterday: “You can argue that vodka’s gone too far – they’re all going to be niche, some of these wacky flavors. The market’s in danger of becoming a glorified RTD kind of thing,”
“Vodka is quite a pure drink – it should be quite premium-oriented in my view. And all these flavour innovations risk not hitting the premium cues that they should be really.”
Fruits, especially citrus varieties, have dominated flavored variants since early in the past decade, Mintel said in a January report of flavored vodkas, providing an easy way to sweeten a drink that people prefer to mix, and appealing to younger drinkers with a sweeter tooth.
Here 21-24 year-olds are particularly important, and 61% of this age group (the highest percentage in any) surveyed by Mintel in 2012 said that a new flavor was an important factor affecting their purchase of white spirits.
Mintel warned as recently as January that, while flavored vodka continued to sell well in the US and globally, “it is questionable how much longer growth can continue”.
“Particularly in the US, where 10 years of constant flavored vodka innovation has led to extreme flavors becoming fairly commonplace,” the research firm added.
“With barriers to entry so low for vodka compared to other spirits, and unusual flavors an obvious way for a niche brand to make an impact, the US market is hugely fragmented.”
Risk of cheapening brand
Mintel warned that vodka brands needed to be careful they did not compete to create the most bizarre flavors, or release an over-abundance of limited edition flavors.
“Doing so risks cheapening the flavored concept and the brand too much. Flavored innovation can become more powerful by linking it to the brand story and using it to communicate the brand message.” the research firm wrote.
Good examples of this approach included Russian recipes from when Smirnoff was first distilled or flowers /herbs picked from Åhus in Sweden where Absolut derives, Mintel wrote.
“Or [vodka brands could] adopt a different approach to flavors such as vodkas designed specifically for food pairing,” it added.
'Americans want to treat themselves to fun vodkas'
Beverage research specialist Canadean was less gloomy on the outlook for flavored vodka, telling BeverageDaily.com that it would continue to see major US growth during 2013, recording the second-highest growth rate of any spirit in the country, and growing faster than unflavored vodka, and well above spirits overall (2.7% growth prediction).
"We don’t track new product development as Mintel do, so growth of new products may be slowing down. However total consumption, which our data focuses on, is forecast to remain growing strongly," a Canadean spokesman said.
"Americans want to treat themselves to fun vodkas that affirm their sense of individuality, something that flavored vodka is well-positioned to do," he added.
"Despite all of this, only 104m liters of Flavored Vodka will be consumed in the US in 2013, or 16.5% of the US vodka market. There’s plenty of space for flavored vodka to expand, but by and large Americans still prefer unflavored vodka."