The cocktail culture that once launched imported vodka into the stratosphere appears to be coming full circle. Vodka—and imported vodka in particular—was ubiquitous in cocktails, and consumers couldn’t seem to get enough. Other spirits tried, but largely failed, to gain traction for years. Eventually, however, the pendulum shifted with the emergence of whiskies and, to a lesser extent, white spirits other than vodka.

Vodka never really lost favor with consumers, but it did with bartenders. Now it seems to be making its way back.  “In the last couple of years there was a lot of turning your nose up at vodka,” says Trevor Landry, beverage director at NL Group, which operates multiple restaurant concepts in Dallas. “My distributors and suppliers were all pushing whisk(e)y. But there’s been a bit of resurgence in the past six months to a year, where people recognize vodka for what it is—a tasteless, odorless spirit that’s a great base for cocktails.”

Suppliers note the trend as well. “We’re seeing a renewed interest in vodka that comes from the on-premise after a few years of focus on Tequila, gin and craft whiskies,” says Yann Marois, global vice president and chief marketing officer for Grey Goose vodka. “Bartenders who once considered vodka more of a prosaic ingredient are now choosing super-premium vodka as an alternative to brown spirits.”

Alex Tomlin, senior vice president at Diageo North America, admits that vodka “took more of a backseat” when the mixology scene exploded a handful of years ago. He notes, however, that vodka remains the most popular spirit in America and is still the backbone of the spirits industry. “There’s plenty of room for vodka as the cocktail movement continues, and the spirit reappears on more and more menus,” he says.

The strength of imported vodka can be found in the numbers. Its volume is massive, coming in at 24.7 million nine-liter cases in 2016—a slight increase of 1 percent from the previous year, according to Impact Databank. In fact, the category has added about 1.4 million cases since 2010, and super-premium and luxury brands in particular remain vibrant.

Brand Loyalty

Some of the biggest imported vodka names continue to make strides despite pressures on the category and significant competition from within the overall vodka sector. At the super-premium tier, the top brands are doing well. Grey Goose leads with depletions of 2.71 million cases, a 2.1-percent gain. Cîroc advanced 17 percent to 1.86 million cases, while Belvedere edged up 0.6 percent to 498,000 cases. Effen had the strongest performance among the leaders, rising 63.2 percent to 167,000 cases.

“There’s stiff competition across the category, particularly as millennials enter spirits through a variety of offerings,” says Diageo North America vice president Keenan Towns, who works on Cîroc. “But across all categories, consumers continue to trade up.” Towns adds that for Cîroc, flavored line extensions offer “compelling points of differentiation,” and are driving volume growth. The summer 2017 release of the limited-edition Summer Colada flavor was followed later in the year with the launch of Cîroc French Vanilla.

Svedka also has an evolving array of flavors that boost the brand. Carl Evans, vice president of marketing for spirits at Constellation Brands, says the launch of Svedka Blue Raspberry in May 2017 was “the best-ever flavor launch we’ve experienced in the brand’s history.” Evans says the expression was on track to deplete 200,000 cases in 2017.

Absolut vodka has long been a pioneer on the flavor front, but recently moved to streamline its flavors due to lackluster performance. That strategy changed somewhat with the launch of Absolut Lime at the start of 2017. Lime is “the best-performing innovation that Absolut has seen” recently in terms of both value and volume, according to Nick Guastaferro, brand director for Absolut at Pernod Ricard USA. “It’s generated quite a bit of momentum in the business and helped us offset the declines we’ve seen in our flavors range. It has allowed us to stabilize flavors for Absolut.”

Brian Bowden, head of spirits at retail chain BevMo, acknowledges the flavor phenomenon for Cîroc, noting that the growth of the brand in his stores is largely driven by the latest flavor offering. That’s not the case with some other imported vodka leaders. “We’re seeing good growth in imports, mostly out of the established brands like Absolut, Ketel One and Grey Goose,” he says.  For those brands and many others, it’s the core product, rather than flavored line extensions, that drive volumes.

Intense Competition

The premium-priced tier, which includes Absolut and Ketel One, has encountered more difficulties recently. As a group, premium imported vodkas fell 0.6 percent to 17.08 million cases in 2016, according to Impact Databank. Svedka moved into the No.-1 position in 2015, eclipsing long-time leader Absolut, and widened its margin last year with a 2.9-percent gain to 4.32 million cases. Absolut fell 3.4 percent to 3.93 million cases, third-ranked Pinnacle slipped 0.9 percent to 2.6 million cases and fourth-ranked Ketel One held steady at 2.17 million cases.

Evans says the fight for market share and volume is intense. “We see a very competitive category,” he says. “When we look at vodka, we see a bit of a knife fight. There’s significant competition, and pricing is very aggressive in the market, with many brands fighting for a consumer who at times will trade between different vodka labels. Standing out amongst the pack is increasingly difficult.” Evans adds, however, that internal Constellation research shows that consumers are still swayed by the “imported” attribute, suggesting it is “a real quality signal for the product.”

Others argue that consumers are swayed by ingredients. “The imported vodka category is very competitive, and consumers have a lot more options compared to elsewhere,” says Marois of Grey Goose. “We do see growth, and that’s largely continuing in the premium and the super-premium sector as consumers trade up to products made with simple, high-quality ingredients. We see Grey Goose doing extremely well in this space.”

Diageo’s Tomlin notes similar attributes for Ketel One. “We know communicating that Ketel One is distilled with 100-percent non-GMO grain will resonate,” he says. And sometimes, just the fact that a brand is imported is seen as an asset. Nikki Guard, beverage director at Tag Restaurant Group in Denver, says that for vodka in particular, imports are on top. “Imported vodka is still king for us,” Guard says. “We live in Denver, where there are a ton of distilleries and a lot of people making quality craft vodka, but I think the main consumer who enjoys vodka is very brand-loyal. We’ve dabbled with bringing some of the craft vodka in, but it seems like the vodka drinker really tends toward the imported brands that they’ve known for a long time.”

NL Group’s Landry sees a similar dynamic. “I don’t know that customers actually think about whether they want something imported versus local when it comes to vodka,” he says. “With whisk(e)y and other products that’s on their minds, but vodka is really just name-brand centric. In most of my restaurants, Tito’s and Ketel One fight for number one and number two, then Grey Goose, Belvedere and Stoli are right behind that. And when customers are ordering an imported vodka, they don’t necessarily care which country it’s from, they just know the brand name and the quality.”

As much as there is competition within the imported vodka sector, there’s also intense fighting for share with domestic brands. Tito’s and New Amsterdam, in particular, are ratcheting up the pressure. Ryan Maloney, owner of Julio’s Liquors in Westborough, Massachusetts, is a long way from Tito’s home state of Texas, yet he and other retailers around the country are seeing Tito’s make inroads into the market share of both imported and domestic vodkas. “Tito’s has definitely taken chunks out of other brands’ market share, but I would say that it’s not just the imports that have felt Tito’s wrath,” he says. Maloney adds that some imported vodka brands have responded to the pressure by dropping price, “especially at the lower end of the premium spectrum. They’re not performing as they once were and are more price-sensitive than ever.”

Creating Differentiators

With the lines blurring a bit, suppliers are seeking to make their brands stand out in the crowded field. Those efforts are largely geared to the millennial audience that is propelling the imported vodka category forward. For example, earlier this year Absolut launched The Open Mic Project, an online platform launched in partnership with singer Rita Ora that aims to promote a message of inclusivity and acceptance.

Imported vodka campaigns vary, but most primarily target millennial consumers. Evans, for example, notes Svedka’s relationships with celebrities and style-makers as well as the press. “Those are real differentiators for the brand and something you’ll continue to see from us in the future,” he says.

Grey Goose also has millennials firmly in its crosshairs, accroding to Marois. “Those consumers are very multicultural, and they value experiences over possessions,” he says. “We think that they should choose premium brands to help mark those moments.” He adds that imported vodka has undergone shifts as both the on-and off-premise have evolved, but has ultimately found firmer footing, noting, “We’re very excited about the future of high-quality imported vodka.”

For Ketel One, Tomlin has identified what he calls a shift in consumer preferences toward a new form of elevated experiences. “The Ketel Your Soda campaign includes video which will live on digital, out-of-home, and paid media, as well as on social, primarily Facebook and Instagram,” he says. The program includes an “experiential platform” called Ketel Market, which “provides consumers the opportunity to elevate experiences with low-impact Ketel soda cocktails at cultural events across the nation, using locally sourced fresh ingredients.”