It’s no secret that in recent years, imported vodka has lost market share. Domestic vodkas have taken a big bite, and other categories like Bourbon and Tequila have made inroads as well. But the sector isn’t backing down easily. In fact, imported vodka posted a collective gain in 2021, with some brands posting double-digit increases and many more registering solid gains. Through image reinvention, flavor extensions, and continuing super-premium and luxury positioning, imported vodkas are staking a claim and fighting back against market share intrusions.
“While other spirits are experiencing a short-term surge of interest, vodka continues to remain one of the most popular spirits overall,” says Aleco Azqueta, vice president of marketing for Bacardi, which owns Grey Goose. “It’s also important to consider that people are still consuming vodka, just in different ways. For example, many of the popular RTDs are vodka based. As these consumers graduate to more sophisticated cocktails, Grey Goose is perfectly positioned. Taking up one third of the entire market share of spirits, vodka is ever relevant and of interest to consumers in the on- and off-premise.”
The imported vodka segment overall was up-and-down last year as consumers continued to make drinks at home while also returning to the on-premise. Pernod Ricard’s Absolut, a premium-priced imported vodka, returned to growth in 2021 after several challenging years, registering a 2.1% gain to 3.19 million cases, according to Impact Databank. Segment leader Svedka declined 3.7% to 4.55 million cases. The premium imported vodka segment in general was a bit lethargic in 2021, declining 1.5% to 16.86 million cases, according to Impact Databank.
The super-premium-priced segment fared far better last year, advancing 15.5% to 5.4 million cases. Much of the growth was driven by imported vodka’s top brands. Perennial leader Grey Goose, which registered declines the previous three years, bounced back strongly in 2021 with a 27.5% surge to 2.63 million cases. Diageo’s Cîroc brand also fared well, gaining 11.5% to 1.5 million cases, according to Impact Databank.
“We know that consumers continue to prioritize quality and craftsmanship when shopping for spirits,” Azqueta adds. “As the excitement for premiumization continues, with over 50% of bartenders reporting that patrons are looking for cocktails made with premium spirits, Grey Goose will remain one of the most in-demand vodkas, regardless of origin.”
Cocktail Resurgence
Vodka cocktails are front and center at Agua Caliente Casino in Palm Springs, California, where the category accounts for about 50% of total spirits sales, and within that, about 75% comes from imported vodka. Food and beverage operations manager Brandon Rood says nearly all the imported vodka call volume comes from three brands—Grey Goose, Ketel One, and Belvedere—and the biggest vodka drinks are Martinis. “I’ve noticed that our guests are moving away from house vodka and going with higher-end drinks. They’re willing to pay a little more for a better flavored drink now,” he says, noting that younger adults in particularly are willing to embrace more premium experiences.
Agua Caliente also uses Absolut variants in several popular signature cocktails, including The Honey Pot ($15), which contains Absolut Elyx, lemon juice, honey syrup, mint, and Angostura bitters, shaken and served with a lavender aroma bubble on top.
Matt Foley, vice president of marketing for Absolut at Pernod Ricard, acknowledges the competition from categories like Bourbon and Tequila, but says vodka’s mixability and cocktail prominence is serving it well. “The vodka category is benefiting from some strong tailwinds as we emerge from the pandemic,” he says. “Particularly exciting for Absolut is the resurgence in cocktail culture. More consumers are making cocktails at home, and bars are offering exciting twists on classic cocktails.”
New Entrants, New Expressions
While the track record of imported vodka has been variable in the past two decades, the category’s size and value make it ripe for further investment. One new brand to hit the market this year is Bols vodka ($13 a 750-ml.), from longtime industry player Lucas Bols. Brett Dunn, Lucas Bols managing director for the USA and Canada, says his company’s motivation to launch a vodka might be a bit different from other brand launches.
“For us, it was less about the category play and more about our strategy as a company,” he says. “We are, and have been for 450 years, a cocktails company, and up until last year we were really an ingredient company for cocktails. We didn’t have the base spirits. We made a strategic decision to get into the imported vodka category and to continue to build our cocktail strategy using our own brands.”
Beyond the top eight or ten brands that are most wellknown, there is a slew of other imported vodka entrants vying for attention. Some have been around for years, while others are new and making a play to capture some of the volume and excitement within the segment.
David Swiergosz, general manager of Boston’s Salt + Stone restaurant, is partial to Suntory’s Haku Japanese vodka, which launched in the U.S. in 2018; and Reyka Icelandic vodka, which made its debut in 2005. These and the more well-known super-premium vodkas have taken hits due to the growth of some domestic brands, but “vodka drinkers and bartenders know that when recommending a vodka on the rocks or for a Martini, it allows the quality and craftsmanship of these products to really shine.”
At Salt + Stone, one popular cocktail this past summer was the Peach Please ($14), which is made with Haku vodka, Yellow Chartreuse, peach purée, ginger simple syrup, and lemon juice, topped with Avissi Rose and garnished with beverage glitter.
Innovation Growth
For the broader imported vodka segment, much of the growth underway is due to innovation. Grey Goose, for example, launched the 30% abv Grey Goose Essences last year, with fewer calories than the standard Grey Goose and natural ingredients for flavoring. The Essences range includes Strawberry & Lemongrass, White Peach & Rosemary, and Watermelon & Basil expressions, each retailing at $30 a 750-ml. This year, Bacardi promoted the Grey Goose Essences line through an In Bloom concert series featuring Grammy-nominated artist Kehlani.
For rival Cîroc, flavors continue to drive brand trial and acceptance. James Valdes, director for Cîroc vodka, says that to date the brand has released more than 15 flavor innovations and “is continuously releasing new flavor variants.” In June, the brand introduced Cîroc Passion ($27 a 750-ml.), which Valdes says is the result of more than two years of experimentation and development between co-owners Sean “Diddy” Combs and Diageo. “It’s the first offering in the Cîroc portfolio that delivers more than a distinct taste,” he says. “It is dynamic, multi-layered, and smooth and brings something unique to our portfolio of flavors.”
The Passion launch came a few months after Cîroc added its first ready-to-drink cocktail, Cîroc Vodka Spritz. In fact, many imported vodka producers have jumped on the RTD trend. Pernod Ricard launched Absolut Vodka Sodas and Absolut Cocktails in 2020.
Absolut is also putting energy behind the Espresso Martini, an increasingly popular cocktail in both the on- and off-premise. “We’re creating a cocktail that exudes sophistication and elegance with its rich, full-bodied, and complex yet smooth taste,” Foley says, noting that Absolut’s version includes equal parts Absolut, Kahlúa, and espresso. “Although it never went out of fashion, the cocktail has made a huge comeback recently thanks to its timeless flavor, spirited espresso, charming appearance, and glitzy origin story to match.”
Pernod Ricard also announced Absolut’s partnership with Rise Brewing Co., the first brand to launch nitro cold brew technology, to offer convenient cocktail solutions to espresso. “We’re removing the barrier of what may be perceived as a complicated cocktail by swapping the espresso for cold brew,” Foley says. “Now with cold brew, Espresso Martinis are so easy to make.”
Signature cocktails are often used to drive brand awareness. Take the Honey Deuce cocktail, pioneered by Grey Goose for the US Open. The vodka brand’s sponsorship of the tennis event spans 16 years, and this year Azqueta says 400,000 Honey Deuce cocktails were served to fans in the stands and at home. The Honey Deuce is made with Grey Goose, Chambord liqueur, fresh lemonade, and topped with honey dew melon balls.
“As a build to our current programming which includes the famous Grey Goose x US Open Suite and many other touchpoints, we developed the Grey Goose MetaVIP Lounge, which was available to fans across the globe to experience during the tournament, complete with interactive games and a chance to win tickets to the Grey Goose suite next year,” Azqueta says. “We also updated and expanded our e-commerce programming with the Honey Deuce express, where fans in Manhattan and Brooklyn can order a canned, pre-mixed version of our iconic serve to be delivered chilled and straight to their door.”
Looking Ahead
While imported vodka marketers are excited about the return to growth for the sector, there are some warning signs on the horizon. The U.S. economy is starting to falter, and such conditions often signal challenges— particularly for luxury-priced spirits.
Austin Keith, owner of the Pinkie’s chain of retail stores in Texas, says the combination of the recessionary environment and the drying up of federal assistance during the pandemic is taking a toll. “People don’t have that money to spend on luxury products,” he says. “I’m seeing a little bit of trade down now, and it’s starting to affect vodka. Either size wise or product wise I’m seeing a shift into the mid-tier.” That said, Keith says both Grey Goose and Belvedere have shown dynamism in his stores recently.
A different dynamic is showing at Jubilation Wine & Spirits in Albuquerque, New Mexico. Co-owner Tasha Zonski-Armijo says imported vodka isn’t resonating with the younger clientele. “Brands like Chopin, Belvedere, and Grey Goose are for the older crowd,” she says. “The younger drinkers—those in their 20s, 30s, 40s—don’t know those brands. They know the latest and greatest local or national domestic vodkas.”
Zonski-Armijo says flavors are helping to strike interest among younger consumers, noting Cîroc’s flavors, including Passion and Summer Watermelon, are particularly successful. Cîroc’s Valdes says the brand is banking on further innovation as a way to drive sales in the future. “As we enter the new year, we’re excited to redefine the category with new additions to the portfolio,” he says.
Grey Goose’s Azqueta says the Covid-19 pandemic launched a new growth period for the brand, and more innovation is on the horizon. “We know our sales have jumped significantly since the beginning of the pandemic,” she says. “As we move further into a post-pandemic world, we know that the demand for vodka will continue to rise.”