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Experimental Flavored Vodka Innovation May Slow, Analyst Says
Posted: November 26, 2012
The European vodka category has undergone a plethora of experimental flavor launches, although innovation fatigue might be about to set in, according to Spiros Malandrakis, alcoholic drinks analyst at Euromonitor International.
"Vodka’s red star still shines, but its message is getting lost behind the cacophony of flavored noise and designer gimmicks. It's time to get back to basics," Malandrakis wrote in a recent Euromonitor report.
In the report "Vodka: Bubblelicious," the analyst cites the array of "experimental flavored vodka" such as Van Gogh’s peanut butter and jelly, Pinnacle’s pumpkin pie, a smoked salmon flavored vodka, UV’s chocolate cake and whipped cream variants, Stoli’s salted caramel, Master of Malt's Naga Chili Vodka, a "swiftly withdrawn" Allah Vodka in Kazakhstan, a luxury rum flavored vodka in the UK and a sauvignon blanc-based concoction in Absolute’s ever-expanding offerings.
According to Euromonitor International, global vodka sales are set to register flat volume growth for the year. On one hand, Malandrakis says vodka's dynamics are much more bullish than this figure suggests. He estimates that global stagnation is purely down to the chronically and consistently declining consumption rates in Eastern Europe and the category’s crumbling Russian stronghold. Evolving drinking habits, a newfound fascination with western varietals, primarily higher-end whiskies, and the severing of ties with the country’s soviet past are not favorable for vodka. Eastern Europe accounts for about 2.4 billion liters out of the 3.8 billion liters of vodka sold globally in 2012.
On the other hand, he says that beyond Western Europe, growth rates in other regions are motoring on as emerging markets seem to be gradually embracing vodka. The key U.S. market seemingly also remains infatuated with the category.
"With total volumes set to register more than 2% growth in 2012, cutthroat price competition and the nation’s sweet palate favoring the avalanche of flavored variants are still providing momentum," he says.
Still, Malandrakis says the problem lies with the longer term repercussions of pushing innovation to such extremes that the end product is moving farther away from being considered a heritage-steeped spirit.
"As boutique offerings, a fresh focus on history and provenance, tradition and artisanal production methods are rewriting the rulebook across the alcoholic drinks board, vodka’s current trajectory is counterintuitive, potentially damaging and at the end of the day, not sustainable," Malandrakis adds.