The marketplace for imported vodka has become a bit cutthroat these days. With much of vodka’s dynamism now coming from domestic brands—led by Tito’s and pushed along by a variety of local and regional labels—imports are battling to retain loyal customers and attract new drinkers in the highly competitive market. “We joke that it’s like a knife fight in vodka now,” says Carl Evans, vice president of marketing for spirits at Constellation Brands, which markets Svedka vodka. “It’s a good time to be a consumer, because there are some great products at very competitive prices.”

BevMo’s Gary Sundgren can confirm that first-hand. Sundgren, the team lead for spirits at the California-based retail chain, says 2017 and 2018 brought new pricing lows for some imported brands. “Competition has definitely ramped up, and aggressive discounting actually started last year, with some imported brands hitting retail prices closer to $20 than $30,” he says. The pressure to discount is intense, agrees Tom Schneider, liquor consultant for France 44 Wine & Spirits in Minneapolis. “It’s a much more vigilant marketplace, and if you’re not coming in with aggressive deals, someone else will,” he says.

While price incentives may be allowing some brands to curb their downturns, the reality is that imported brands were in decline last year—with some notable exceptions—and that trend has largely continued in 2018. Imported vodka depletions slumped 4.5% in 2017, dropping to 23.59 million 9-liter cases, according to Impact Databank. The category has lost more than 1.6 million cases since its peak in 2013.

Schneider says that while imported brands are stable in his store, they’re not growing. “The market share lost by imported brands has definitely gone to their domestic counterparts—mainly Tito’s, as well as locally made products,” he says. Tito’s, of course, is one of the biggest spirits success stories of the decade. It still trails Smirnoff in the national vodka rankings, but its consistent double-digit growth in recent years has taken the category by storm. Tito’s carries a retail price of roughly $20 a bottle, and many imported vodka marketers are aiming to match or, in some cases, beat that price.

Charles Sonnenberg, owner of Frugal MacDoogal’s, which has locations in Tennessee and South Carolina, says many brands are dropping down to $20 or lower, but it’s not enough. “Tito’s continues taking share from all other vodka brands at both higher and lower price points,” he says.

The same is true in the on-premise. At San Diego’s Cohn Restaurant Group, beverage director Maurice DiMarino says imports at all price points are now playing second fiddle. “Tito’s is overtaking Grey Goose, Ketel One, and Absolut on calls in all our restaurants, and that wasn’t the case three years ago,” he says. “My higher accounts were doing Grey Goose, my middle tier accounts were doing Ketel One, and Absolut was usually after that. Tito’s, which was about No. 5, is now No. 1 no matter what the venue is.”

Fighting Back

While competing aggressively on price, many imported vodka brands are also trying to differentiate themselves in more unique ways. Lee Applbaum—longtime CMO of the hugely successful Patrón Tequila brand, which was acquired by Bacardi this year—is turning his attention to the company’s Grey Goose vodka. “Grey Goose has unparalleled brand recognition, but we need to recapture and reignite the emotional connection consumers have with our brand,” says Applbaum, who’s now global CMO for both Patrón and Grey Goose. He wants to continue the vodka’s long-standing focus on what he calls its “classic intrinsics”—ingredients of soft winter wheat from the Picardy region of France and fresh spring water from the brand’s dedicated well in the Gensac-la-Pallue commune in Cognac. “Now, more than ever, consumers care about where their ingredients come from, so it’s important to continue talking about how Grey Goose is made,” he says. “It’s a meaningful point of differentiation for our brand.”

But Applbaum adds that the company must go above and beyond mere intrinsics to recapture market share, as they will only take any luxury brand so far. “The extrinsic, ‘irrational desire’ that drives the purchase of luxury brands is a connection we must make,” he says. Grey Goose tapped into that demand for luxury for many years, becoming by far the biggest above-premium vodka brand in the U.S. in the early 2000s and sustaining that position today. Still, the brand has faltered recently. In 2017, Grey Goose volumes dropped 19.6% to 2.18 million cases, according to Impact Databank.

Flavors and changing production methods are common among imported vodka marketers as they seek to extend their brand’s appeal. Grey Goose recently re-introduced La Vanille, which is made with vanilla beans harvested in Madagascar. “Naturally flavored, premium vodkas are starting to gain traction at top bars across the country,” Applbaum notes.

Ketel One appears to have hit the mark with the launch earlier this year of Ketel One Botanical, a first-of-its kind, lower-proof spirit (30% abv) made with vodka distilled with real botanicals and infused with natural flavors. “We introduced three varieties—Peach & Orange Blossom, Cucumber & Mint, and Grapefruit & Rose,” says Jim Ruane, brand director for Ketel One at Diageo North America. “Ketel One Botanical has quickly built momentum on the strength of its compelling proposition: fresh taste, no artificial flavors, no artificial sweeteners, no sugar, no carbs, and only 73 calories.”

BevMo’s Sundgren says the reception for the Ketel One Botanical has thus far been strong. “Unique flavors with fewer calories seem to be very on trend at the moment,” he says. Steve Madonna, senior vice president of culinary for Texas-based restaurant Bar Louie, is also a fan. He says the Botanical line is “gaining some steam” in a crowded category. “The brand’s perceived health and ease of execution are benefits to us,” he adds, noting that the flavors, when combined with soda or tonic and a garnish, translate into an easy but interesting drink.

Ruane acknowledges that “imported doesn’t necessarily mean better to today’s consumers,” but he also notes that the brand and its extensions fit with the lifestyle goals of many. “These days, the shift toward conscious living is having a fundamental impact on how consumers shop, eat, and drink,” he says, noting that a majority of Americans prioritize healthy or socially conscious food purchases and that lower-abv drinks are becoming increasingly popular at leading cocktail bars. “Ketel One’s ability to speak to product truths and its competitive claims—that it’s made from 100% non-GMO grain, exceptionally smooth, and family-made—advocate its superiority and provide a more powerful reason to choose our vodka,” Ruane adds. The Dutch brand declined 3.5% to 2.1 million cases in 2017.

Cîroc, another imported vodka from Diageo that sells in the above-premium price band, also struggled last year, with its volume dropping 15.2% to 1.57 million cases. Dan Sanborn, senior vice president of Cîroc, says flavors will be a major focus in returning the brand to growth. “We pride ourselves on constant evolution, flavor innovation, and changing how people consume and experience premium vodka,” he says. The brand’s latest flavor, just released in September, is Cîroc Black Raspberry. Other recent flavor launches include Mango, Summer Colada, and French Vanilla, all of which had strong receptions and, according to Sanborn, helped build momentum for the brand’s legacy variants, including the flagship Cîroc vodka.

“Our focus is to continuously penetrate the market with aggressive introductions and move the needle with our innovations, all while reinvesting in our core products,” Sanborn adds. “A large sector of Cîroc vodka is flavor innovation. We’ve done it since the brand’s inception, which we’ve realized is a major key in gaining consumers and driving brand loyalty. It keeps people excited year after year and propels us as a dominant force in the market.”

Absolut vodka, which ranks second among premium-priced imports, is also banking on flavors—with a heavy emphasis on citrus—to help shore up volume. Grapefruit is the latest addition to Absolut’s citrus portfolio, which includes Citron, Lime, and Mandrin. “Absolut continues to evolve in response to listening to our consumer’s demands, as they’re at the heart of everything we do,” says Regan Clarke, Absolut’s brand director at Pernod Ricard USA. “Citrus is the largest growing category in consumer demand. But beyond the flavor profile, each of our citrus variants is made with natural ingredients, no added sugar, and no artificial coloring—another response to consumer demand for transparency into how their products are made.” Absolut has faltered volume-wise in recent years, and depletions of the premium-priced Swedish brand fell 3.1% to 3.81 million cases last year.

Bucking the market trends is another Swedish brand. Svedka vodka continued to gain market share and volume last year, rising 1.9% to 4.4 million cases. The brand has been on a hot streak and in 2015 displaced Absolut as the No.-1 imported vodka in the U.S. Svedka’s Evans says the brand’s lower price point is attractive to consumers even as they see Svedka’s higher-priced counterparts participate in deep discounting. “We’ve been pleased with our ability to hold price,” he says. “Over the years, the unique selling point for Svedka has been that combination of style and value—a modern, sleek, cool brand with great liquid in the bottle, but at a relatively affordable price. We’ve maintained consistency in that proposition over the years, which is helping us to win in a competitive category.”

Svedka also relies heavily on flavors. Its latest, Blue Raspberry, launched last year. “Flavors help insulate us from the competition,” Evans says. “We’ve got a very healthy business with the core 40% abv vodka that is 75% of our sales, and flavors complement that with the remaining 25%.”

Other premium imported vodkas that managed to grow in a declining market include Polish brand Luksusowa, which gained 10% to 275,000 cases, and Iceland’s Reyka, which advanced 16.4% to 119,000 cases. The top 12 premium imported vodka brands combined for a 1.5% decline to 16.32 million cases in 2017, according to Impact Databank.

At the above-premium level, performances were far worse. The top five brands in that price category combined for a 15.6% decline to 4.53 million cases. The top three brands—Grey Goose, Cîroc, and Belvedere—all had double-digit declines, but smaller brands Effen and Pravda registered gains.

With such flagging performances, many of the major imported vodka brands are looking to flavors to reverse declines. But in the on-premise, opinions have long been mixed about the relevance of flavored vodkas in bar programs. Cohn Restaurant Group’s DiMarino sees no reason to use flavored vodkas, and instead argues that going fresh is the best way. Johnny Swet, master mixologist at The Skylark in New York City, is likewise thankful that the “flavor train” is slowing down in favor of vodkas made with artisanal grains.

But Bar Louie’s Madonna is a fan of at least some of the flavors, especially more natural ones. “There are some really great flavored vodkas that provide a good jumping-off point, and some of the imported vodkas have had a stronghold in that market for a long time,” he says. One popular cocktail at Bar Louie is the Main Squeeze ($10-$12, depending on market), which blends Effen Blood Orange vodka, Aperol aperitif, lemon juice, and vanilla syrup.

Changing Demographics

Another challenge for imported vodkas is an aging consumer base. Younger people are drinking vodka, but more often than not it’s Tito’s or another national, regional, or local brand. “A lot of the old imported standbys are purchased by an older generation, while younger drinkers are buying domestic or local, or turning to such niche imports as Beluga, Reyka, and Chopin,” notes Schneider of France 44.

Madonna of Bar Louie further notes that major imported brands have built their reputations over the years, a fact that resonates with an older generation. “Imports have had a long time to shape their narrative and build their brands,” he says. “A lot of long-term vodka drinkers have a go-to brand. Where you’ll find people switching courses is with younger, millennial vodka drinkers. They’re drawn to the authenticity and craftsmanship of a brand like Tito’s.”

Acknowledgement of the demographic shift is apparent in the marketing and advertising campaigns of some major imported brands, as well as their packaging. Younger consumers are said to be drawn to companies that stand for something and Absolut is right there with them. “Absolut, as a brand, has a long history of standing out by taking a stand,” says Clarke. “Pushing the status quo is part of our DNA—we were the first spirits brand to advertise in an LGBT publication more than 35 years ago.”

Svedka’s Evans says innovation in the packaging and the product could also help expand the market to younger consumers. “We’re seeing interesting seasonal packaging come into the category,” he says, noting the company’s own stars-and-stripes packaging for Independence Day. The company also offers Svedka Spiked Premium Seltzer in cans and is eyeing other trends, including botanicals and infusions. “Innovation in the vodka category is going to keep attracting new consumers, and bring old consumers back to it,” Evans says.