F R O M S A V O R Y T O S W E E T

FLAVORED VODKAO N T H E R I S E

By Laura Holmes Haddad

G reen tea, blueberry, pomegranate, honey pepper, kiwi fruit. These are just a few of the new vodka

flavors showing up on back bars and retail shelves today, and there are many more to follow.

While total vodka sales slowed to 1 percent growth last year, flavored vodkas grew by 16 percent.

With over two hundred flavored brands on the market, plain vodka is taking a backseat to its flavor-spiked

cousin. Growth in the premium sector is even higher; flavored vodkas represent over 20 percent of the premi-

um vodka category. According to The Distilled Spirits Council of the United States (DISCUS), in 2000 fla-

vored vodkas represented a 6.9 percent share of the vodka category but rose to 12.4 percent in 2005.

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The best-selling flavors in the U.S. market are lemon,orange, raspberry, and vanilla, according to Adams BeverageGroup. To make these flavors, distillers add either purchasedflavorings, made with real fruit oils or synthetic blends, oruse flavors from fresh ingredients. Some are even infusingtheir vodkas, a process which saturates the ingredients in analready distilled vodka.

The Young ConsumersWhy are consumers turning to flavored vodkas? The demo-graphic profile for flavors is pointing to the younger con-sumer. “Flavors seem to be big with the 21 to 35 year old set,especially the female consumer who doesn’t want a beer,but rather a Martini,” says William Eldien, president ofNolet Spirits USA, which has one flavored vodka,Ketel One Citron, in their portfolio.

Martin Silver, president & CEO of Star Industries,distributors of Georgi Vodka, also attributes vodka’s still-growing success to the younger, more adventurous crowd. “Theflavor craze is growing because the younger legal-age consumersare into wildly different flavors and this fuels the growth.”

With flavored vodkas, distillers are giving the younger con-sumer what they want. “You’ve got this generation of legaldrinking age customers and they expect flavors, so these flavorsare not unique; it’s what they’re accustomed to,” says ToddNickodym, executive marketing manager at Luxco, importers ofthe Pearl brand. And Nickodym notes that flavors aren’t limit-ed to vodkas; he points to flavored rums, tequila, and whiskeyentering the market.

Kelly Spillane, executive VP of Castle Brands, whoseportfolio includes a line of Boru flavored vodkas, offers asimilar perspective. “Flavored vodkas are what the 21 to 30-year old consumers are expecting from their beverages. It’schanged the drinking landscape,” says Spillane. “When I waskid it was Pepsi, Coke, and Canada Dry. As these kids, whogrew up with so many different flavors, become adults, theywill demand that from their beverage alcohol choice goingforward. Flavored rum, flavored whiskey, liqueurs; you’restarting to see the beginning of what adults of the future aregoing to demand and that’s flavor choice.”

The overall cocktail trend of fresh flavors is anotherfactor in the flavored vodka success. As John Higgins,marketing director for Finlandia, points out, beverageconsumers want fresh and light. “Look at consumertrends,” he says. “Consumers are going to lighter,smoother, easier to drink beverages and then look to fla-vored vodka: it’s clean and naturally flavored. It’s easy toput a natural flavor with the product.”

Consumers’ Evolving PalatesOthers note the overall shift in consumer’s palates to higher-qual-ity beverages. “For the consumer, what tastes good and what does-n’t is slowly evolving. It’s the same with craft brewing. There’sbeen this huge shift, a shift driven by palate,” says Lance Winters,distiller at Hangar One Vodka in Alameda, California, whomakes seven flavored vodkas.

With seemingly endless flavors to choose from, distillers aretaking many factors into consideration when they are approach-

ing new flavors. For Pearl vodka, thepomegranate flavor came from lookingbeyond the traditional spirits market.“We looked outside the spirits industry ina broader sense and looked at the successPOM brand had and decided this flavorwould help us meet our objectives,” notesNickodym. “Five years ago POM was ablip and now it’s close to a $100 millionbusiness. Pomegranate has gone from aniche market to mainstream.” Nickodymalso identifies grape and cherry as emerg-ing flavors.

At Charbay, based in St. Helena,California, distiller Marko Karakasevicproduces six flavors, including their mostrecent launch, raspberry, and a pome-granate releasing in Fall 2006. “I like tosay we’re on the pulse of flavor. We’re nota giant corporation so we can react fast;our only limitation is when the fruit isripe,” remarks Karakasevic.

For Finlandia, pinpointing the con-sumer palate is always a challenge. “Peopleare looking to try exotic new thingsand they challenge us to come upwith new flavors, to challenge con-sumer’s palates,” says Higgins.“Orange and mango are hot fla-vors; berry is also hot.” Mango isFinlandia’s best-selling flavor.

Hangar One’s Wintersnotes that the flavor pos-sibilities are endless and

sees flavoreds as a permanent fixture inthe vodka category. “Because vodka iscompletely flavorless, you can’t continuethat forever. You’ve got to find somethingthat differentiates that,” he notes. “As wegrow and become part of a world marketand find more flavors we need new fla-vors to keep our palates interested. Aslong as there are interesting flavors toplay with it can be sustained.”

Absolut recently added a unique fla-vor to its extensive line of flavoreds:Ruby Red. And another recent, innova-tive addition from Pernod Ricard: StoliBlueberi, which features the essence offresh ripened blueberries.

Two new flavored vodkas with akick — and not a part of the fruit cate-gory — is Van Gogh Espresso andDouble Espresso Double Caffeinevodka. Dave Van de Velde of Van Goghvodka, says, “Espresso and DoubleEspresso Double Caffeine vodkas pro-vide consumers with a better flavorthan a real cup of Espresso. It took sev-eral years of research to develop this

perfect espresso flavor formula.” VanGogh currently has fifteen flavors

in its line. Van de Velde adds,“Our vodkas are unique in the

fact that they are all naturaland provide a high quality,bold taste; all of our flavorsare intermixable.”

“There is a glut of flavored vodkas, but amongst that glut,there are a lot of good ones.It takes a discerning palate tochoose the best.”

– Duggan McDonnell, Frisson, San Francisco

Lending Bartenders a HandWhile Karakasevic feels the move to flavoredsis coming from the consumer, he notes that italso helps the bartender. “If you can make apomegranate martini by putting Charbaypomegranate vodka in a shaker and not havingto do anything to it, that’s pretty exciting,” hesays. “When I talked to bartenders in Vegas andthey said, ‘Why are you doing this? It’s our job to mixflavors’, I told them, ‘I’m helping you out.’”

Georgi Vodka also has a pomegranate flavor in its line.And in addition to the current consumer enthusiasm for allthings pomegranate, CEO Silver feels there is an added benefitfor bartenders as well. “We came out with a pomegranate flavorlast year and we immediately found that it eliminates the need forbartenders to mix. In a crowded bar, when someone orders apomegranate martini, they use our vodka.” Silver also notes thatorange is Georgi’s best-selling flavor.

Creating CocktailsBartenders often make their own vodka infusions to create cer-tain flavors but are now turning to flavoreds to create specialtycocktails. Duggan McDonnell, a mixologist who most recentlyworked at Frisson in San Francisco, saw customer demand for theflavoreds. “People walk up to the bar and say ‘Stoli Raz and tonic’or ‘vanilla and soda.’ People will call ‘Effen Black Cherry Vanillaand soda’ again and again,” he says. When he’s deciding what tostock, McDonnell says it’s a matter of how the bar approaches thecocktail, and views citrus and orange flavors as staples of any bar.“At Frisson we have fewer [brands] but we emphasize quality,” hesays. “We have three orange vodkas, two lemon, and one vanillavodka. I chose not to carry peach because too many flavored vod-

kas become garnish on the back bar. They simplybecome baggage.”

McDonnell incorporates flavored vodkas intomany of his drinks and notes that creating a cock-tail with a flavored vodka has more to do with the

brand than the flavor. “It’s a give and take. Itdepends on how good the product is and whatthe consumer wants. If I have a good product

I will put it into a great drink,” he says. “Thereis a glut of flavored vodkas but amongst that glut

there are a lot of good ones and it takes a discerningpalate to choose the best.”

Colleen Duggan, manager of Honey Bistro in Los Angeles,sees her customers asking for specific brands. “People request fla-vored vodkas a lot; Stoli Vanilla is very popular,” she says. “Thepalate now is going a little sweeter but more of a purist.” Dugganuses flavoreds differently from the infused vodkas. “We are usingthem to accentuate a drink but we use infused vodkas on theirown; right now we have one by Modern Spirits.” Honey carriesten different flavors, including chocolate.

Boutique BrandsAs new flavored products arrive to off-premise outlets, retailerssee the category growth in the most direct way. Retailers point toboutique distillers, who are setting themselves apart from thecrowd with hand-crafted, all-natural flavors such as Hangar One’sBuddha’s Hand Citron and Charbay’s Blood Orange. “There is aflood of products,” says Mike Ulanday, a sales staff member at RedCarpet Wine & Spirits Merchants in Glendale, California, whocarries approximately 30 different flavored vodkas. But Ulandaydoesn’t see it lasting. “I think it’s a trend. Vodka is the most pop-ular spirit but quality is tough. Some of them are too sweet, vis-cous, or syrupy – one of the three,” he says. Ulanday points to the

quality of the flavored line as the differentiating factor. “I likethe local guys – Hangar One and Charbay. Everything they dois good. I would say there’s a lot out there but the basic differ-ence is between a small versus a larger guy,” he notes.

At Union Square Wines in New York City, spirits managerKenneth Posner is seeing strong sales in the smaller brands aswell. “Some of the better selling flavoreds are the boutique vod-kas,” he says. Ponser stocks approximately 25 different brands offlavored vodkas and notes that “the citrus stuff goes the quick-est and seems to appeal to a lot of people.”

For Janie Westla, a manager at Ansley Wines in Atlanta,the flavors she stocks is determined by her customers. “Westock flavors based on requests,” says Janie Westla, a managerat Ansley Wines in Atlanta. “But the next hot flavor is reallywhatever’s next. There are certain ones that stay, like citrusand orange,” remarks Westla. She also points out that whatcustomers will spend depends on how they plan to use thevodka, and she currently doesn’t price anything above theGrey Goose Citron and L’Orange. “It’s a matter of pricing,too. People who are purists and drink it straight up, they willspend more,” she says.

With palates tuned in to sweet and savory, expect to seemore flavors emerge in the next year. But don’t get too attachedto that melon-kiwi-berry; as Spillane notes, “You’re going to seea rotation of hot flavors faster than other spirits.” n

“We stock flavorsbased on requests.

But quite honestly, thenext hot flavor is... ...whatever’s next.

– Janie Westla, Ansley Wines, Atlanta