The vodka category continues to grow, with consumers tending to stick to brands they know over experimenting with new labels. Vodka remains the U.S. market’s No.-1 spirits category by volume at nearly 80 million case depletions, though it has slipped a few percentage points from its 2016 level of a 34.2% share. The premium-priced segment ($10-$25 a 750-ml.) had been showing the best growth, up 6.8% in 2020, while the sub-premium and super-premium tiers fell 2.4% and 4.7%, respectively. For the past two decades, premium vodkas have steadily gained share of the category, making up 62.4% of total vodka case depletions in 2020.
Retail Shake-Up
In the off-premise, vodka sales have been a mixed bag. At the nine-unit retailer Kappy’s Fine Wine & Spirits in Massachusetts, the category decreased 15.2% by 9-liter cases and 13.9% by dollars, according to co-owner Joe Selby. He also notes that vodka’s share of spirits sales has dropped in recent years, down from 34.6% in cases and 25% in dollars in 2018 to 27.6% and 20.9%, respectively, last year. However, the biggest trend affecting vodka sales overall is the meteoric growth of spirits-based RTDs. “The vast majority of RTDs that we sell are vodka-based, but categorized as RTDs,” Selby says. “In every metric (dollars, physical cases, and cases), the rise in spirits-based RTDs has more than offset the decline in vodka. If you combine the two categories and compare 2021 to 2018, dollar sales were up 17%, physical case sales were up 44.8%, and case sales were up 38%.”
The three best-selling vodkas at Kappy’s in both volume and value were Tito’s, Smirnoff, and Ketel One, while the only brand among the top 10 to increase sales from 2020 to 2021 was New Amsterdam, which Selby says benefited from its involvement with Barstool Sports. “Keep in mind that 2020 and 2021 were not typical years,” he notes. “If you compare 2021 to 2019, we have seen significant growth in other popular vodka brands, such as Tito’s, Ketel One, Stoli, Chopin, Deep Eddy, and Triple 8.” Smaller brands that are gaining traction at Kappy’s include locally produced, women-owned Velo vodka, French import Mont Blanc vodka, and Bushel vodka, which is made at a zero-waste distillery in Missouri using 100% certified organic and non-GMO corn sourced within 100 miles of the facility.
At the eight Garfield’s Beverage stores in the Chicago area, on the other hand, vodka has continued its growth streak in recent years. “Tito’s is killing it out there, but I’m also seeing a spike in Deep Eddy, Stoli, and Svedka,” says chief buying officer Jeremy Brock. “I feel like, since Covid-19 hit, vodka has just exploded.”
The only areas where vodka sales have dipped at Garfield’s are flavors and newer craft brands. “Over the last decade, I’ve seen a pretty big decline in flavors,” Brock says, citing Deep Eddy’s flavored variants and zero-sugar offerings like Ketel One Botanical and Smirnoff Zero Sugar Infusions as the only flavored vodkas that are selling. “It’s also a weird time for emerging brands because a lot of our business moved to online and pick-up orders, so we weren’t getting as many people in the store and customers were going to the brands they knew.”
K&L Wine Merchants, which operates three stores in San Francisco, Redwood City, and Hollywood, California, takes a different approach with vodka, which only makes up 1% of spirits sales. “We have a surprisingly small, curated vodka selection given how extensive our selection of other spirits is,” says spirits buyer Andrew Whiteley. “We’ve generally seen vodka sales slightly decrease over the last five years, but it’s been fairly steady year to year with the exception of 2020 when we saw a very large spike in vodka sales at the begin- ning of the pandemic. But that has waned.”
Vodka brands stocked regularly at K&L include heavy hitters like Ketel One, Grey Goose, and Belvedere, alongside smaller, high-end labels that are popular with the company’s clientele, such as Potocki and Beluga. “We focus on quality craft brands that deliver value to our customers looking to explore what vodka has to offer,” Whiteley explains. “St. George is a perfect example. We carry all three of St. George’s vodkas, and the California Citrus and Green Chile expressions are also the only flavored vodka we sell. Something like Rocket vodka, made from California apples, also offers a different vodka experience than you’re likely to find elsewhere.”
Craft Connection
Among smaller craft brands, Alameda, California’s St. George vodka has been gaining popularity in recent years. “Led by our St. George Green Chile vodka, our vodka portfolio has been quite resilient with 20% growth overall,” says Lindy Colburn, vice president of east coast sales at St. George Spirits. “Our commitment to celebrating raw, fresh ingredients has been a key pillar of our distilling. St. George Green Chile vodka is made with real jalapeño, serrano, habanero, and red and yellow sweet bell peppers.”
While most sales come from bars and restaurants, the brand has been gaining more traction in the off-premise throughout the pandemic. “Although we are a heavy on-premise company, we have been fortunate to see so many consumers experience our products in their homes over the past year and a half,” Colburn says. “However, on-trade is coming back, and we are doing all we can to help support them in their creativity.”
At Laurel Brasserie & Bar in The Grand America Hotel in Salt Lake City, vodka is one of the two top-selling spirits, along with American whiskies. “I would say the two categories are sort of neck and neck in terms of popularity,” says hotel beverage director Mark Moulton. “We have two menu features that use vodkas produced in town, as we’re empowered to seek out and utilize nearby distilleries. ”The American Hustle ($10) combines Salt Lake’s own Sugar House vodka, St-Germain, Rothman & Winter creme de violette liqueur, kaffir lime, pineapple, and lime juice, while the Hibiscus Mule ($10) highlights locally made Dented Brick vodka mixed with ginger beer, hibiscus tea, and lime juice.
“Our well vodka is Dented Brick, because we’re really trying to make the local distilleries as successful as they possibly can be,” Moulton explains. “They’re one of the newer distillers in Salt Lake, and we have a great relationship with them. From a training standpoint, it’s always good to have a face and someone who’s on property often.” Tito’s, Absolut, and Grey Goose are also top-sellers at Laurel, and vodka sales are strong in the hotel’s lobby bar and the speakeasy-style Gibson Girl Lounge. “I like the simplicity of vodka,” Moulton says. “If you want a crisp, aperitif-style cocktail, vodka’s always the go-to. It strengthens all the flavors in the drink, and the other ingredients really shine if vodka’s your principal spirit.”
At Jimmy rooftop lounge in New York City’s Soho neighborhood, vodka continues to be the best-selling spirit. “Vodka sales are still No.-1 in cocktails and one-on-ones,” says founding partner and master mixologist Johnny Swet. “Even though there was a major shortage of alcohol last year, vodka was not affected.” He adds that the category currently comprises 40% of bar sales, which is consistent with previous years.
The best-selling vodka brand at Jimmy last year was William Grant & Sons’ Reyka from Iceland. “We like to diversify the vodkas in our cocktails, so we offer Reyka,” Swet explains. “It’s a very well-made and exceptionally clean and crisp vodka.” The brand is currently featured on Jimmy’s specialty drinks menu in the Spiced Apple Moscow Mule ($19), made with Reyka vodka, apple butter, ginger, cinnamon, and lime juice.
Other top-sellers at Jimmy include Ketel One, Tito’s, Grey Goose, and higher-end brands like Chopin and Beluga. The most popular cocktail since the bar’s inception 11 years ago is the Grapes of Wrath featuring Crop Cucum- ber vodka, muddled grapes, elderflower, and charred rosemary. Last summer, the rooftop venue offered a Strawberry Moscow Mule, and a Watermelon Frosé (all cocktails are $19), the latter of which was a best-seller. “I think having fun seasonal cocktails helps with the marketing of certain brands,” Swet says.
Domestic Brands Shine On
Of the U.S. market’s top 10 brands, five are domestic and five are imports. The fast- est-growing brand above 500,000 cases is Tito’s, which has shown an average annual compound growth rate of 25% since 2015. “It continues to perform well, and we’ve seen more consistent purchase trends in the last 12 months,” says Frank Polley, vice president of trade marketing for Tito’s. “We have a passion- ate fan base that loves Tito’s and buys it often, as well as a lot of room to introduce our brand to new consumers.”
In 2021, Tito’s announced a five-year sponsorship deal as the official vodka of professional golf’s PGA Tour, and it kicked off the partnership with a golf event in Austin, Texas called Tito’s Shorties Classic featuring professional golfers Harry Higgs, Harold Varner III, Pat Perez, and Joel Dahmen. The match, which involved a classic game of Wolf, premiered on The Golf Channel, and Tito’s donated $500,000 to the players’ selected charities. Tito’s is celebrating its 25th anniversary in April, and in the spirit of founder Tito Beveridge’s hard work and tenacity over the past two and a half decades, the brand is teaming up with Accion Opportunity Fund to provide grants to small business owners. “Distilling was unheard of in Texas before Tito set out on his vodka vision,” Polley notes. “He still stays true to his roots and loves to cheer on others navigating their way through the highs and lows of starting a business.”
Another fast-growing Texas vodka brand is Heaven Hill’s Deep Eddy, which advanced 6% to 1.6 million cases in 2021. Deep Eddy features an Original unflavored offering along with seven additional variants: Lemon, Lime, Ruby Red, Cranberry, Peach, Orange, and Sweet Tea. “The brand has done phenom- enally over the last 12 months,” says Reid Hafer, group product director at Heaven Hill. “Our overall franchise is up more than 23% on a rolling 12-month basis, and each of our flavors is No. 1 in their respective categories. Lemon grew 34% this past year, and we’ve shipped almost 200,000 cases of the newly launched Lime in its first 12 months.”
Hafer attributes much of the growth to excitement surrounding the launch of Lime, which was Deep Eddy’s first new product introduction in several years, as well as a boost from viral videos on TikTok that tout Lemon Shots using the brand’s Lemon vodka. She also notes that the on-premise has made a comeback. “Our points of distribu- tion were up 20% versus our pre-pandemic numbers, with a lot of great menu features and programming on-premise,” Hafer adds. Popular cocktails have included the Cherry Limeade made with Deep Eddy Lime, the Espresso Martini made with Deep Eddy Original, and a Cosmopolitan made with Deep Eddy Lemon and Cointreau triple sec liqueur in a co-branded partnership.
For 2022, Deep Eddy is focused on the national expansion of its vodka and soda RTD line ($12 a 4-pack of 12-ounce cans), which is currently available in Ruby Red and Lemon, with Lime launching in May. Deep Eddy is also emphasizing its use of real juice and high-quality ingredients in the brand’s “Pick Something Real” campaign and increasing its support of the LGBTQ+ community during Pride month. “We’re looking forward to the year ahead and continuing to foster this momentum forward,” Hafer says.
After a dip in 2019 brought No.-2 vodka Smirnoff neck and neck with Tito’s, the Diageo brand has been overtaken despite 2.5% growth to 9 million cases in 2020. This bump is due in part to Smirnoff’s entry into the botanical space with its Zero Sugar Infusions range, which includes Watermelon & Mint, Lemon & Elderflower, Strawberry & Rose, and Cucumber & Lime variants. Portfoliomate Ketel One—the No.-6 vodka brand in the U.S. market—has also seen success with its Botan- ical line, contributing to a 3% rise to 2.6 million cases in 2021.
At No. 3, E&J Distillers’ New Amsterdam vodka has shown strong growth. The brand introduced its pink lemonade-flavored Pink Whitney extension in 2019, and the offshoot surpassed one million cases in its second year on the market with the help of its affiliation with the Barstool Sports hockey podcast Spittin’ Chiclets, co-hosted by former NHL player Ryan Whitney.
Imports Hang Tough
Meanwhile, Constellation-owned Svedka—the top imported brand—holds onto the No.-4 spot in the overall U.S. vodka market. Billy Lagor, senior vice president of brand management, attributes this continued growth in part to innovation. “Svedka Cherry Limeade flavored vodka, released last spring, experienced rapid growth and was successful at driving trial during the peak summer season,” he says. “Svedka Vodka Soda premixed cocktails saw strong ramp-up in the back half of 2021, often out-pacing RTD category growth in IRI markets.” In 2022, the brand is planning for the national launch of Svedka Tropics, a canned cocktail line that combines tropical fruit flavors with tea, as well as expansion beyond the vodka category with Svedka Gin.
Lagor also points to Svedka’s digital-first approach to marketing. “Paid media investments across TV and digital media had a positive impact on generating awareness for new product offerings and overall brand sales,” he notes. Last year, the company introduced the “Svedka Goes” campaign, emphasizing the vodka’s ability to go anywhere and with anything. “Svedka has evolved its positioning to be the bold beverage of choice for the ‘Party Starter’ growth target—multicultural consumers in their 20s and 30s who are looking to have fun with friends,” Lagor explains.
Pernod Ricard’s Absolut vodka had been in decline since 2015, but last year showed a spark of growth. The brand has been turning those losses around with the addition of its canned-cocktails line, which includes flavors such as Mango Mule, Grapefruit Paloma, and Berry Vodkarita, as well as three Vodka Soda flavors: Lime & Cucumber, Raspberry & Lemongrass, and Grapefruit & Rosemary. “Absolut is outpacing other imported vodkas as well as the incredible growth of prepared cocktails,” says Lara O’Brien, senior brand director of Absolut. “Absolut RTDs were up almost 150% in 2021 versus 2020, with gains in both distribution and velocity.”
Last summer, Absolut launched the campaign “Drink Responsibly. #MixResponsibly” to emphasize the impor- tance of setting and respecting physical and emotional boundaries with the return of in-person socializing. Over the holidays, the brand teamed up with the home enter- tainment rental service Social Studies to offer the Social Studies x Absolut Espresso Martini kit. Featuring a table runner, dinnerware, glassware, candles, votives, and other items that made it easy to host an elegant party in style, the kit paired perfectly with the Absolut Espresso Cocktail Kit ($179), which included one 750-ml. bottle each of Absolut and Kahlua coffee liqueur, along with espresso, seasonal garnishes, a cocktail stencil, a cocktail shaker, a jigger, and an ornament.
Heaven Hill’s sub-premium vodka brand Burnett’s ranks No. 7 in vodka sales in the United States, followed by two premium entrants, Beam Suntory’s Pinnacle and Campari America’s Skyy. Pinnacle depleted 2.3 million cases after declining 8.3% in 2021, while Skyy fell 10% to 2.2 million cases in 2021. Bacardi’s Grey Goose, the No.-1 super-premium vodka brand, comes in at No. 7 for vodkas in the U.S. market. But trends for Gey Goose may be turning around. Its vice president of marketing, Aleco Azqueta, says the brand’s performance has been remarkable over the last year. “In 2021, Grey Goose grew 22% off an already impressive base,” he notes. “It’s exciting to see Grey Goose leading the way in the premiumization of vodka. According to NABCA, not only are we the lead- ing super-premium vodka in control states, but we’re also the fastest growing super-premium spirit within the top 10.”
With bars and restaurants rebounding in 2021, Grey Goose saw a 181% advance in on-premise sales, the company says. Azqueta attributes this growth to the popu- larity of the brand in that channel, as well as the increase in consumer interest for more upscale drinks like the classic Martini. To capitalize on this resurgence, Grey Goose part- nered with Italian design company Alessi to create the Lunar Eclipse Martini kit ($350), featuring a 750-ml. of Grey Goose vodka, a custom Boston shaker, a cocktail measure, a bar strainer, and a stirrer. The accompanying campaign, “Vive Le Martini!” includes an ad directed by choreographer Ryan Heffington, who’s known for choreographing Sia’s “Chandelier” video, that encourages consumers to “Do the ‘Tini.” Grey Goose has also been named the official spirits partner of the Grammys in a multiyear sponsorship.