Vodka Market in US and Canada

1

This consumer research report explores the nature of the vodka

market in North America. It examines current conditions, trends,

marketing tactics, and environmental aspects of the market.

Skills: research, analysis of research findings, critical thinking,

writing, proofreading and editing

Consumer Research Case: The

Vodka Market in the United States

and Canada

Sara Kelly

Christian Mazzilli

Anastasiia Reznichenko

Sarah Rodrigues

Vodka Market in US and Canada

2

Industry Overview

Market Size

Vodka is the most popular liquor in the United States, accounting for over 20% of bottles

of spirits sold1, and 32% of spirits by volume.2 In Canada, vodka ranked first in market

share, accounting for 27.9% of the Canadian spirits market in 2012.3

In 2012, 65.18 million cases were sold in the US, an increase of 6.1% from the previous

year. Sales in dollars was $5.47 billion, an increase of 5.1% from the previous year.1

Measured by volume, shipments of all varieties of vodka have increased, at a pace

greater than the spirits industry in general (Fig. 1). Measured by revenue, all vodka has

increased, at a pace greater than the spirits industry in general. Value-tier vodka

increased from $1.06 million to $1.08 million (+1.4%); the rest are measured in billions (Fig

2).

Figure 1: Cases sold by tier Figure 2: Revenue by tier

Market Segments

While the total market for vodka drinkers in North America could consist of everyone

over the legal drinking age, it would be ineffective to market that broadly.

Education

Vodka consumers can be segmented into those with university education and those

without. In Canada, those with at least some university education make up 47.2% of

vodka consumers, and in all categories are more likely to drink vodka than the average

index.

+1.7%

+5.7%

+3.5%

+10%

0.00

5.00

10.00

15.00

20.00

25.00

30.00

Value Premium High-end

premium

Super

premium

Cases sold by tier, 2011 to 20121

2011 sales

(millions)

+5.4% +4.0 +9.5%

$-

$0.5

$1.0

$1.5

$2.0

Premium High-end

premium

Super

premium

Revenue by tier,

excluding Value, 2011

to 20121

2011 Revenue (billions)

2012 Revenue (billions)

Vodka Market in US and Canada

3

28.7% of vodka consumers are high school graduates with no university education. If

you include those with trade certificates/diplomas, they make up 41% of vodka

consumers, and in both categories consumers are more likely to drink vodka than the

average index.

The final category, No Certificate or Diploma, is problematic. An unknown number of

the people in this category are not likely of legal drinking age, which explains low

penetration and index. This is not a segment: it is small, unreachable (due to legal

drinking age), and not profitable due to low consumption.

Education4 Total Vodka

Consumer Market

Composition Market

Penetration Index

Secondary/High School Graduate 7693 2066 28.7% 26.9% 113

University/Other Non-University Cert. 6489 1723 23.9% 26.6% 111

Bachelors Degree 4315 1120 15.6% 25.9% 109

Trade Certificate/Diploma 2956 885 12.3% 29.9% 125

No Certificate Or Diploma 6503 845 11.7% 13.0% 54

Post Graduate+ Degree 2185 556 7.7% 25.5% 107

Income

The largest market segment of vodka consumers by income is people who make less

than $20 000, with $50-$75 000 earners as the second-largest bracket. Income is an

important segmentation because vodka is broken into tiers; the low-income earners

should receive marketing on value-tier vodka, where higher-income earners should

receive premium-tier vodka marketing.

Personal Income4 Total Vodka Consumer Market Composition Market Penetration Index

<$20M 11821 2368 32.9% 20.0% 84

$50M-$74.9M 4305 1266 17.6% 29.4% 123

$35M-$49.9M 4531 1217 16.9% 26.9% 112

$75M + 3683 1019 14.2% 27.7% 116

$25M-$34.9M 3646 793 11.0% 21.7% 91

$20M-$24.9M 2156 534 7.4% 24.8% 104

Age

Age segmentation is important, particularly when determining marketing and

distribution channels. As Baby Boomers make up the highest market composition, they

are one segment (Baby Boomers includes most of the 45-54 year-olds, some of the 55-

64 year-olds, and a small number of 65+ year-olds).

Younger people (34 an under) make up another segment, as they are a large group

with similar characteristics. Though 18-24 is a small group in terms of composition, it

Vodka Market in US and Canada

4

should be included in the segment because of the extremely high index and market

penetration. This segment should start at the legal drinking age (18, 19, or 21) to age 34.

Age4 Total Vodka Consumer Market Composition Market Penetration Index

Baby Boomers (born in 1945-1965) 10149 2240 31.1% 22.1% 92

25-34 years 4789 1473 20.5% 30.8% 129

45-54 years 5268 1264 17.6% 24.0% 100

35-44 years 4696 1185 16.5% 25.2% 106

18-24 years 3333 1181 16.4% 35.4% 148

55-64 years 4604 993 13.8% 21.6% 90

65+ 5004 865 12.0% 17.3% 72

Pricing Trends

The price of vodka is rising at a rate faster than inflation.5 In just 8 months, the US

average price rose 4.7%:

Food and Unit US city

average, July

20116

US city average,

March 20127

Increase

($)

Increase

(%)

Vodka, all types, all sizes,

any origin, per 1 litre (33.8

oz)

$14.511 $15.204 $0.683 4.707%

Product Trends

As discussed above, sales of vodka are increasing. There are some specific trends in

vodka sales in Canada and the US:

Flavoured Vodka

In Canada, flavoured vodka sales grew almost 30 percent between 2012 and 2013.3

The LCBO reported an increase of 11.5% in this category in summer 2013, with cherry

being a particular favourite.8

In the US, flavoured vodka experienced a 23.3% gain in total US vodka volume in 2011;

flavoured vodka accounted for more than 25% of all US vodka sales in that period. It is

the fastest-growing trend in the spirits industry. 17 flavoured vodka products were

released in 2011, and 12 between January and September 2012. Pinnacle‟s Whipped

Cream vodka was the most popular; it grew 324.5% in 2011.9

Vodka Market in US and Canada

5

Light Vodka

Another trend in vodka is light or low calorie vodka, such as Smirnoff Sorbet Light (which

is also flavoured) and Voli Vodka.8 Low calorie and light vodkas are becoming popular

as a “healthier” alternative to traditional alcohol.10

Innovative Packaging

Bold and unique packaging is becoming increasingly important for differentiating

products, especially in the vodka industry. Companies that are taking advantage of this

trend, such as Svedka and Pinnacle, are gaining market share. New products are

attracting more attention and older brands are encouraged to innovate and

redesign.11

Sales Projections

Vodka will continue to grow and extend its leading market share in North America. It is

expected to increase its share of the North American spirits market from 33.7% to 37% by

2017.12

Forecast for Canada13

By the end of 2014, the vodka category will be worth $1 067.4 million (CAD)

o Expected compound annual growth rate of 2.9% from 2009-2014

By the end of 2014, the vodka market will total 41.9 million litres

o Expected compound annual growth rate of 2.7% from 2009-2014

Forecast for North America14

By the end of 2014, the vodka category will be worth $14 835.2 million (USD)

o Expected compound annual growth rate of 5% from 2009-2014

By the end of 2014, the vodka market will total 656.5 million litres

o Expected compound annual growth rate of 4.6% from 2009-2014

Distribution

Vodka goes from producer to consumer via the importer, wholesaler, and retailer. The

consumer makes the final purchase either at restaurants and bars, or at liquor stores.

Arrangements differ from market to market. In Ontario, for example, the LCBO controls

distribution of liquor, including what brands are available and at what locations. In

other provinces and the United States, bars, restaurants, and stores purchase their own

stock, or rely on distribution agencies to handle stock.15

Market Profitability

Profitability varies from market to market. It can be costly to get restaurants, bars, and

liquor control boards to carry particular brands, particularly with the strict regulations on

Vodka Market in US and Canada

6

advertising in some markets.16 There is a lot of competition in the vodka market, and

value-tier vodkas are only profitable through high volume sales.17

However, once a brand is recognizable and its sales are high, vodka can be extremely

profitable. Unlike wine or aged spirits, vodka is ready to consume immediately after

distillation, so there is no high capital investment. Premium and super-premium vodkas

in particular have a large profit margin.18

Vodka Market in US and Canada

7

Competitive Environment

Nature of Competition

The alcohol industry is capitalist, as competition is

vast and barriers to entry are fairly low. There are

infinite choices available in beer, wine, and spirits.

Within those three sections, the choices multiply;

this prohibits one brand or one form of alcohol to

be the only product sold.

In terms of how alcohol is sold, however, the

industry moves toward monopolistic in some

markets. In Canada you can only buy alcohol from designated liquor control boards

(LCBO in Ontario), and must be the minimum government-mandated drinking age.

In the United States, alcohol is distributed in more channels. Grocery stores,

convenience stores and many others sell alcohol, however people purchasing must be

21.

Current Competitors

In simplest terms, any beverage can be viewed as a competitor to vodka. For the

purposes of this study, competitors will focus on alcohol (beer, wine, and spirits).

In Canada, beer has been the leading category of alcoholic sales from 2000-2011.

However, wine has gained significant market share, overtaking spirits by 2011.19

Key Competitors

Vodka is a very diverse market in itself, with many competing brands. There are clear

consumer preferences for these brands, however.

Based on data from the Print Measurment Bureau (Appendix B), Smirnoff Vodka is the

brand that consumers buy most often in Canada.20 Smirnoff is a value-priced vodka.

Many other brands – such as Absolut, Skyy, Polar Ice, and Iceberg – also represent

value pricing. Across Canada the individual prices per bottle differ based on provincial

laws, but are all similarly priced.

Other brands, such as Grey Goose, are premium-priced vodka. Based on prices across

the provinces, Grey Goose is double the price of previously mentioned value-priced

vodka.

Vodka Market in US and Canada

8

Brand Price/750mL21 Brand Price/750mL21

Smirnoff $25.45 Skyy Vodka $26.45

Absolut $26.95 Skinnygirl Bare Naked

Vodka

$29.10

Grey Goose $48.95 Iceberg Vodka $25.45

Polar Ice $24.45

Despite the price, Grey Goose is one of the top five vodkas. Research indicates that,

during 2011, consumers took to premium-priced vodkas due to the recession, rather

than going out to bars and restaurants. Grey Goose advertisements focus on a luxurious

lifestyle that is assumed to be achieved through consuming their product (image, left).

Smirnoff, which uses the value pricing approach, uses simplistic advertising to sell their

product. Advertisements such as the one below (image, right) show that by consuming

Smirnoff, your life will become stress free and simple. Advertising for vodka is rarely seen

on television and generally focuses on magazine advertisements that can directly

impact their target markets.

These competing yet different brands make it clear that segmentation is key in the

vodka market. Premium-priced vodka has a different segment than value-priced

vodka, and marketing communications, product, and packaging all need to reflect

that segment‟s preferences.

Vodka Market in US and Canada

9

Relevant Partnerships/Alliances/Distributors

In Canada, vodka is distributed in all 13 provinces and territories; each province and

territory has different regulations regarding sales and partnerships.22

In Ontario, liquor companies are partnered with the LCBO, Ontario‟s sole liquor

distributor. The LCBO, run by the government on Ontario, focuses on social responsibility.

To prevent consumers from improper consumption – e.g. drinking and driving, over-

consumption – the LCBO created a series of advertisements which address the

„elephant in the room.‟ By partnering with iTunes, they were able to create Speak Up!,

an app to assist party hosts to plan safe parties and prevent drinking and driving.23

In Alberta, the AGLC created posters and brochures to promote responsible use of

alcoholic products. One campaign, „Cage Your Rage,‟ encourages responsible

drinking by displaying someone who got into a situation way over their head.24

Many liquor companies also partner with not-for-profit organizations that combat

problems of substance abuse and impaired driving.25

Vodka Market in US and Canada

10

Recent News

In recent months, the LCBO of Ontario has been promoting Ontario Wines, which could

explain the increase in market share of wine 2000-2011. Kathleen Wynne, a Toronto

government official, wants to change liquor laws to boost Ontario Wines. Most Ontario

Wines are sold privately through the individual businesses rather than through the LCBO.

Wynne wants to create a new liquor store that is solely dedicated to the sale of wine,

which would allow small Ontario wine companies to reach the mass market.26

In other news, the LCBO has discussed opening ten express stores across Ontario in

super markets. Based on research by the LCBO, consumers want convenience. Having

alcohol for sale in grocery stores is a way to address the convenience issue. However,

these express stores will not have the full selection that traditional LCBO stores currently

have. Companies that are ranked high in customer sales would see their products on

the shelves of these express stores, while companies that rank in the middle of

consumer sales would miss out on this opportunity.27

Relevant Financial Information

In 2011, the United States and Canada were in an economic downturn. In most cases,

consumers limited their spending to the necessities. However, in 2011, sales of liquor

increased 4%. Consumers were switching to super premium brands, such as Grey

Goose. The sale of super premium vodkas rose 15.9%.28 During a recession, consumers

purchase premium brands in order to have the feeling of luxury they would normally get

from a bar or restaurant cocktail, with a lower price tag.

A study done by the Economist (Appendix C) shows consumer trends based on

individual countries and specific types of liquor. In the five spirits examined (vodka, rum,

Scotch whisky, gin and tequila), the United States ranked in the top 2 for each

category. The study related each spirit consumed to the number of people in a given

country. In the vodka category, 1.9 litres of vodka are consumed by every person in the

US each year. This number includes men, women (including pregnant women), and

children, so actual consumption per alcohol consumer is significantly higher.29

Vodka Market in US and Canada

11

Consumer Behaviour

Vodka consumers are adventurous, and are very willing to try new flavours and

innovations.30 Flavoured vodka sales are increasing each year, and more and more

flavours are being added. Vodka producers are making large investments in marketing

and innovation to draw these adventurous consumers to their brands.31

Somewhat conversely, vodka consumers are also fairly brand loyal. In a study of the

highest brand loyalty, Ketel One ranked at #17, and Grey Goose at #15. Two other

vodka brands appeared in the top 50.32

These two behaviours, when combined, suggest that vodka brands should be

extremely innovative, particularly with flavoured vodkas, in order to keep brand-loyal

consumers. Otherwise, consumers may shift to brands that offer more interesting or

unique flavours. There is strong competition for the attention of the consumer in

alcoholic drinks, and it is hard to maintain that attention.

Vodka consumers are also shifting from “on-premise” consumption (that is, in

restaurants and bars) to “off-premise” or in-home consumption, in order to save money.

These consumers also divide into two distinct segments: one segment is saving further

by purchasing value-brand vodka, the other segment is compensating for the loss of

on-premise luxury by purchasing premium vodka.33

This shift in consumption behaviour indicates that vodka brands should redistribute their

marketing funds from on-premise marketing (business-to-business) to off-premise (direct

to consumer).

Consumers are becoming more health-conscious, and the market for low-carb, low-

calorie, and light vodkas is increasingly accordingly.34 Innovation in this category can

also help brands establish themselves in a highly-competitive market. For example, the

Skinnygirl brand grew 388% in volume from 2010-2011.35

Vodka Market in US and Canada

12

Marketing Tactics

Pure unflavoured vodka comes in a variety of brands and bottle sizes (from 1.5 oz

testers to 1.75L bottles). It ranges in price from value to super premium; pricing varies by

province/state depending on taxation levels. Many brands also make flavoured

vodkas, in everything from lemon and orange to bacon and root beer.

The marketing and advertising of alcohol in both Canada and the US is strictly

regulated by federal and provincial/state legislation. This limits what vodka brands can

do to increase brand awareness and sales. For example, marketing to youth, promoting

underage consumption, promoting over-consumption, or associate alcohol with

social/personal achievement.36 Some networks ban alcohol advertising altogether, and

at the very least it is limited to certain times of day.

Traditional alcohol advertising tends to use sexual appeals, humour, music, and popular

culture icons. Alcohol advertisers are often criticized for these tactics, as opponents

claim these things appeal to underage drinkers especially. Feminist criticism argues that

alcohol ads hyper-sexualize women and create unrealistic expectations in young

audiences.34

Vodka Market in US and Canada

13

Vodka advertising largely focuses on qualitative or abstract aspects of a brand – such

as smooth, superior, or refreshing – as there are very few discernible differences

between brands of vodka.

To get around legislation limiting traditional advertising, vodka brands are turning to

non-traditional channels, such as social media, mobile marketing, and promotional

events. A 2012 event tour by Smirnoff entitled “Midnight Circus” involved guests wearing

digital bracelets and having their movements tracked. The event included 2 400 guests,

and inspired 4 000 Facebook likes and reached 800 000 friends.35

Smirnoff‟s Facebook page has over 10 000 000 likes,

Absolut has over 4 000 000, and both have huge

Twitter followings as well. This is a huge audience for

advertising, with little regulation. Neither Facebook

nor Twitter requires age verification to like/follow

these companies.

Mobile technology is also being utilized by the major

vodka brands to more actively engage their

audiences. For example, Absolut Vodka has an app

that allows users to search for cocktails and drink

recipes, with step-by-step mixology instructions.35

Vodka Market in US and Canada

14

Many vodka brands are advertising responsible consumption, largely to curb criticism of

the alcohol industry‟s culpability in impaired driving and substance abuse problems.

Promotional events and sponsorship have always been popular marketing tactics for

alcohol companies. SKYY Vodka was recently named the official sponsor of the

Treasure Island Music Festival in San Francisco.37 This festival is very popular, and there is

no minimum age to attend; instead, alcohol is sold in specific areas.38

For new brands or flavours entering the market, it is imperative to attract the most

attention possible; this means that new brands require large marketing outlay at the

beginning to cut through the competitive clutter. Large promotional events, such as

dance parties and competitions, combined with extensive social media campaigns,

will attract the most attention.35

As vodka users are willing to try new flavours, promotional tastings inside liquor stores will

help to stimulate initial sales.

Vodka Market in US and Canada

15

Environmental Factors

Legal Considerations

Alcohol is highly regulated in both Canada and the US. Its marketing, sale, and

consumption are all rigorously legislated.40

The major concerns surrounding alcohol involve the exposure of underage youth to the

advertising, the glorification of alcohol consumption in advertising, the impact of the

legal drinking age, the availability and distribution of alcohol, and the problem of over-

consumption.

Alcohol advertising and marketing is very limited. In Canada, legislation prohibits any

form of alcohol advertising that:

encourages the general consumption of alcohol,

promotes the irresponsible or illegal use of alcohol,

associates alcohol with personal or social achievement,

is directed to those under the legal drinking age, and/or

includes alcohol in the operation of a motor vehicle, or any other activity that

requires skill or care.38

In the US, the legislation is similar; alcohol cannot be advertised on most television

networks at all, and alcohol companies cannot advertise at events where the

audience is likely to be less than 70% over the legal drinking age.39

To combat these concerns, alcohol companies are going beyond the minimum

required legislation – often, the cursory “Please Drink Responsibly” at the end of an ad –

in order to promote safe and responsible consumption. For example, Diageo, the

parent company of Ketel One, Smirnoff, and Ciroc vodkas, has an entire website,

http://www.drinkiq.com, devoted to responsible drinking and alcohol education. Other

companies sponsor safe-ride programs and run advertising that discourages impaired

driving and alcohol abuse. The liquor control boards in Canada donate portions of their

proceeds to organizations like MADD (Mothers Against Drunk Driving) as well.41

Occasionally new legislation regarding alcohol is proposed. For example, in 2010 in

Ontario, young drivers were prohibited by law from having any alcohol in their system

under the age of 21.42

Alcohol companies occasionally oppose stricter legislation through government

lobbying if they feel it will have a negative impact on their business. They must tread

Vodka Market in US and Canada

16

cautiously, however, so as not to appear to be encouraging underage drinking, over-

consumption, or alcohol dependence.

Economic Conditions

As previously discussed, the recent recession had an impact on vodka sales. Alcohol

companies must remain aware of economic conditions to ensure that funds are being

distributed appropriately. For example, more money should be spent marketing off-

premise/in-home consumption during a recession; in favourable economic conditions

more money can be spent marketing on-premise consumption to restaurants and bars.

Recessions also affect the varieties of alcohol being purchased. Vodka purchases in

particular split between value-priced and premium-tier vodkas; segmented and

differentiated marketing will be the most effective in these conditions.

Social Trends

Corporate and social responsibility remains an important trend in the alcohol industry.

Beyond the legal responsibilities, above, companies are expected to promote a certain

set of values and improve the planet.

The objectification of women in alcohol

advertising is a fairly standard practice – as

the old adage goes, sex sells. However,

inspired by the movement against hyper-

sexualization and objectification of

women, some ads are being heavily

criticized. For example, this advertisement

for Belvedere Vodka immediately

provoked backlash from its social media

audience. The ad had to be removed, and

Belvedere has issued many apologies to

date for the ad, which critics say appears

to make light of sexual assault.43

Vodka Market in US and Canada

17

Recommendations

Product Offering

Brands that are not currently considering a line of flavoured vodkas or light/low-

calorie/low-carb vodkas should do so, as these are the biggest trends in the vodka

industry today.

Brands that find their sales are stagnant in this growing industry may want to consider a

packaging redesign in order to revitalize the product or target it to a particular market.

Packaging designs that have not been updated may seem „stale‟ to consumers

looking for an exciting vodka to try; they risk being so familiar that they become

invisible.

Marketing and Advertising

Marketing should be segmented, as described above, and any advertising should be

targeted at those segments to ensure efficiency. Advertising must, of course, conform

to all necessary legislation, but should also promote the company‟s social responsibility

efforts.

For new flavoured vodkas, promotional tastings in liquor stores are recommended, as

consumers are more willing to make the purchase once they know they like the

product. Alternatively, new flavours should be available in inexpensive sample sizes (the

1.5oz tasters) for consumers to try.

New brands of vodka may have difficulty entering this very competitive market. In order

to be successful, new brands must generate a lot of buzz around their product, with

event sponsorship, promotions, and/or celebrity endorsements. Innovative packaging

may also attract consumer interest.

Brands may need to advertise more. Where liquor distribution is monopolistic (such as

under the LCBO), customers cannot simply choose any vodka; they can only choose

what the retailer carries. It is important for brands to lobby the retailers to carry their

brand, but also to encourage customers to ask for it in those retailers. In the case of the

LCBO, the bulk of their advertising is for Ontario wines, so vodka brands must advertise

aggressively to keep their customers loyal.

Social Responsibility

Companies must continue to promote responsible drinking, discourage impaired driving

and overconsumption, and fund education particularly for young people. The greater

Vodka Market in US and Canada

18

a company is seen to be socially responsible, the greater its brand reputation and

loyalty.

Success Factors

Market leaders in the vodka industry have several traits in common:

1. Product differentiation: The four market leaders in Canada – Smirnoff, Absolut,

Grey Goose, and Polar Ice – all offer at least two different flavours.

2. Brand loyalty: The leaders in the vodka market also have loyal customers. This

loyalty is inspired by consistency of quality, but also innovation. Brands maintain

their loyalty by effectively targeting their advertising, researching their market,

and innovating both in terms of product and packaging.

3. Social responsibility: The vodka brands with the highest revenues are also the

ones giving the most money to not-for-profits, running the most “drink

responsibly” ads, and funding the most education.

Vodka Market in US and Canada

19

Bibliography

Parentheses indicate the path taken to find the source.

Section I: Industry Overview

1. Miller, R. K., & Washington, K. (2013). DISTILLED SPIRITS. Restaurant, Food &

Beverage Market Research Handbook, 418-431. (Conestoga Library search for

„spirits market‟, narrowed to US and Canada, 2010-2013)

2. Distilled Spirits Council 2012 Industry Review. New York City. (Conestoga Library

search for „spirits market‟, narrowed to US and Canada, 2010-2013)

3. Douloff, D. (2013). Canada's CLEAR choice. Food In Canada, 73(7), 60-62.

(Conestoga Library search for „spirits market‟, narrowed to Canada only, 2010-

2013)

4. Print Measurement Bureau (2013): Vodka, Personally Drank in the Past Six Months.

(See Appendix A)

5. US Inflation Rate Calculator (2013):

http://www.usinflationcalculator.com/inflation/current-inflation-rates. (Google

search for US Inflation Rate 2011)

6. CPI Detailed Report: Data for July 2011. (2011). CPI Detailed Report, 37(7), 1-158.

(Conestoga Library search for „vodka average price‟, narrowed to US and

Canada 2010-2013)

7. CPI Detailed Report: Data for March 2012. (2012). CPI Detailed Report.

(Conestoga Library search for „vodka average price‟, narrowed to US and

Canada 2010-2013)

8. Newswire.ca: “LCBO Top 10 Trends for Summer 2013.”

http://www.newswire.ca/fr/story/1180161/lcbo-top-10-trends-for-summer-2013

(Google search for „Canada alcohol trends AND Vodka‟, narrowed to 2013)

9. Acobsen, J. (2012). Flavorful options for spirits. Beverage Industry, 103(11), 6.

(Google search for „flavoured vodka trends‟, narrowed to US and Canada, 2010-

2013)

10. Cocktail Hunter: “New Smirnoff Sorbet Light Vodka” (2013).

http://www.cocktailhunter.com/trends-culture/new-smirnoff-sorbet-light-vodka

(Google search for „vodka trends‟, narrowed to 2010-2013)

11. FoodManufacturing.com: “Consumer Trends: Design Important in Vodka

Industry” (2013). http://www.foodmanufacturing.com/news/2013/09/consumer-

trends-design-important-vodka-industry (Google search for „vodka trends‟,

narrowed to 2010-2013)

12. International Wine and Spirit Research: “Key Findings: The IWSR Forecast Report

2012-2017” (2012).

http://www20.gencat.cat/docs/DAR/DE_Departament/DE02_Estadistiques_obse

rvatoris/27_Butlletins/02_Butlletins_ND/Fitxers_estatics_ND/2013_fitxers_estatics/011

Vodka Market in US and Canada

20

3_2013_iWSR_resultats_clau_informe.pdf (Google search for „vodka North

America projections‟ narrowed to 2010-2013)

13. Research and Markets: “Vodka in Canada to 2014” (2011).

http://www.researchandmarkets.com/reports/1539678/vodka_in_canada_to_20

14_spirits (Google search for „vodka Canada projections‟ narrowed to 2010-

2013)

14. Research and Markets: “Vodka in North America to 2014” (2011).

http://www.researchandmarkets.com/reports/1539623/vodka_in_north_america

_to_2014_spirits (Google search for „vodka North America projections‟ narrowed

to 2010-2013)

15. Bacardi: About Bacardi Ltd. http://www.bacardilimited.com/corporate-

responsibility/about-bacardi-limited (Google search for „vodka distribution‟)

16. Financial Post: “High competition, low marfings keeps Stoked vodka from

finalizaing deal with Dragons” (2013).

http://business.financialpost.com/2013/01/21/high-competition-low-margins-

keeps-stoked-vodka-from-finalizing-deal-with-dragons/ (Google search for

„vodka profitability Canada‟)

17. Financial Times: “Vodka market nears bubble territory” (2012).

http://www.ft.com/cms/s/0/9411ec74-9512-11e1-ad38-

00144feab49a.html#axzz2hikcTmdO (Google search for „vodka profitability‟)

18. Forbes: “Vodka Rocks!” (2004).

www.forbes.com/2004/07/28/cx_np_0728feat.html (Google search for „vodka

profitability‟)

Section II: Competitive Environment

19. StatsCan: “Control and sale of alcoholic beverages” (2011).

http://www.statcan.gc.ca/daily-quotidien/120326/dq120326a-eng.htm (Google

search for „alcohol market share in Canada‟)

20. Print Measurement Bureau: Vodka, Any Consumption, sorted by Brand (2013).

(See Appendix B)

21. Pricing obtained from the LCBO website, www.lcbo.ca.

22. Members of the Canadian Association of Liquor Jurisdictions (2013).

http://www.calj.org/CALJMembers.aspx (Google search for „Canadian alcohol

distributors‟)

23. LCBO: Advertising and Social Responsibility (2013).

http://www.lcbo.com/socialresponsibility/advertising.shtml (LCBO website ->

advertising)

24. ALGC: Responsible Liquor Service (2013).

http://www.aglc.ca/responsibleliquorservice/postersandbrochures.asp (CALJ

website (#22) -> ALGC -> Being Responsible -> Responsible Liquor Service)

Vodka Market in US and Canada

21

25. The Century Council: Members http://www.centurycouncil.org/members

(Google search for „impaired driving vodka donation‟)

26. Toronto Star: “Kathleen Wynne hints at liberalizing booze laws to boost Ontario

wine industry” (2013).

http://www.thestar.com/news/queenspark/2013/09/25/kathleen_wynne_hints_at

_liberalizing_booze_laws_to_boost_ontarios_wine_industry.html (search Toronto

Star website for „alcohol sales‟)

27. Toronto Star: “Ontario liquor sales: LCBO prepare for big changes” (2013).

http://www.thestar.com/news/queenspark/2013/09/18/ontario_liquor_sales_lcbo

_preparing_for_big_changes.html (from previous entry, Google search for

„Ontario LBCO in grocery stores‟)

28. Time: “Cheers! Increase in Liquor Sales Bodes Well for Economic Recovery”

(2012). http://business.time.com/2012/01/31/cheers-increase-in-liquor-sales-

bodes-well-for-economic-recovery/ (Google search for „hard liquor sales charts‟)

29. Economist: “High spirits” (2013).

http://www.economist.com/blogs/graphicdetail/2013/06/daily-chart-9 (Google

search or „hard liquor sales charts) (See Appendix C)

Section III: Consumer Behaviour

30. Euromonitor: “Spirits in the US” (2013). http://www.euromonitor.com/spirits-in-the-

us/report (Google search for „spirits consumer trends‟)

31. Euromonitor: “Spirits in Canada” (2013). http://www.euromonitor.com/spirits-in-

canada/report (Google search for „spirits consumer trends Canada‟)

32. Business Insider: “Top 20 Brands with the Most Loyal Customers” (2011).

http://www.businessinsider.com/brand-loyalty-customers-2011-9# (Google

search for „vodka brand loyalty‟)

33. StateWays: “A clear winner: Vodka, the largest spirits category in the U.S.,

continues to increase its market share, and, despite the recession, shows few

signs of slowing down” (2010).

http://www.thefreelibrary.com/A+clear+winner%3A+Vodka,+the+largest+spirits+

category+in+the+U.S.,...-a0228910322 (Google search for „vodka brand loyalty‟)

34. Novak, J.A. “Alcohol Promotion and the Marketing Industry: Trends, Tactics, and

Public Health”

http://www.apolnet.ca/resources/pubs/respapers/AlcoholMarketingPaperSept3

0.pdf (Google search for „spirits promotion advertising‟)

35. “Drinking to the Future: Trends in the Spirit Industry” (2013).

http://www.ipsos.com/sites/ipsos.com/files/Drinking-to-the-Future-Trends-in-the-

Spirits-Industry.pdf (Google search for „spirits industry trends‟)

Section IV: Marketing Trends

Vodka Market in US and Canada

22

36. ASCA Alcoholic Beverage Advertising Clearance Guide (2013).

http://www.adstandards.com/en/clearance/alcoholicBeverages/ASCAlcoholic

BeverageAdvertisingClearanceGuide.pdf (Google search for „alcohol

advertising legislation‟)

37. Treasure Island Music Festival: http://www.treasureislandfestival.com/2013/

Section V: Environmental Factors

38. ASC Alcoholic Beverage Advertising Clearance Guide:

http://www.adstandards.com/en/clearance/alcoholicBeverages/ASCAlcoholic

BeverageAdvertisingClearanceGuide.pdf (Google search for „Canada alcohol

advertising regulations‟)

39. Wikipedia: Alcohol Advertising.

http://en.wikipedia.org/wiki/Alcohol_advertising#United_States

40. Alcohol Regulations in Canada:

http://www.ccsa.ca/Eng/Topics/Legislation/LegislationAndRegulations/Pages/d

efault.aspx (Google search for „Canada alcohol regulations).

41. MADD Canada: Sponsor Profiles (2013).

http://madd.ca/madd2/en/giving/giving_sponsors_and_donors_corporate_spon

sor_profiles.html (Google search for „MADD sponsors‟)

42. Toronto Star: “Zero-alcohol limit for drivers 21 and under” (2010).

http://www.thestar.com/news/ontario/2010/07/26/zeroalcohol_limit_for_drivers_2

1_and_under.html

43. HLNTV.com: “Belvedere sorry for decidedly un-smooth ad” (2012).

http://www.hlntv.com/article/2012/03/26/belvedere-vodka-advertisement-

apology (Google search for „vodka ad‟)

Vodka Market in US and Canada

23

Appendix A: PMB Vodka Demographics

01 PMB 2013 Spring - 2 YR DATABASE (DE) Kantar Media 2013

Total Vodka Personally Drank In Past 6 Mos.: Yes

'(000) '(000) % vert % horz index

Total Canada M&F age 12+ 30142 7195 100% 23.9% 100

Gender: Male 14872 3443 47.8% 23.1% 97

Female 15270 3752 52.2% 24.6% 103

Age: 12-17 years 2447 234 3.3% 9.6% 40

18-24 years 3333 1181 16.4% 35.4% 148

25-34 years 4789 1473 20.5% 30.8% 129

35-44 years 4696 1185 16.5% 25.2% 106

45-54 years 5268 1264 17.6% 24.0% 100

55-64 years 4604 993 13.8% 21.6% 90

65+ 5004 865 12.0% 17.3% 72

Baby Boomers (born in 1945-1965) 10149 2240 31.1% 22.1% 92

Education: No Certificate Or Diploma 6503 845 11.7% 13.0% 54

Secondary/High School Graduate 7693 2066 28.7% 26.9% 113

Trade Certificate/Diploma 2956 885 12.3% 29.9% 125

University/Other Non-University Cert. 6489 1723 23.9% 26.6% 111

Bachelors Degree 4315 1120 15.6% 25.9% 109

Post Graduate+ Degree 2185 556 7.7% 25.5% 107

Household Income: $100M + 9229 2592 36.0% 28.1% 118

$75M-$99.9M 4696 1161 16.1% 24.7% 104

$50M-$74.9M 6036 1313 18.2% 21.7% 91

$35M-$49.9M 4083 877 12.2% 21.5% 90

$25M-$34.9M 2348 479 6.7% 20.4% 85

$20M-$24.9M 1100 227 3.2% 20.7% 87

<$20M 2650 546 7.6% 20.6% 86

Vodka Market in US and Canada

24

Personal Income: $75M + 3683 1019 14.2% 27.7% 116

$50M-$74.9M 4305 1266 17.6% 29.4% 123

$35M-$49.9M 4531 1217 16.9% 26.9% 112

$25M-$34.9M 3646 793 11.0% 21.7% 91

$20M-$24.9M 2156 534 7.4% 24.8% 104

<$20M 11821 2368 32.9% 20.0% 84

HH Size: 1 3701 762 10.6% 20.6% 86

2 9147 2327 32.3% 25.4% 107

3+ 17293 4106 57.1% 23.7% 99

Hhld. Structure: Couple With Children Living at Home 13837 3129 43.5% 22.6% 95

Couple - No Children Living At Home 7319 1806 25.1% 24.7% 103

Adult With Children Living At Home 2443 597 8.3% 24.4% 102

Adult Living Alone 3688 761 10.6% 20.6% 86

Adult Sharing Accommodation 2351 790 11.0% 33.6% 141

Empty Nesters 3706 831 11.5% 22.4% 94

Other 504 113 1.6% 22.4% 94

Adult Child/Children in parents home: 18-24 years old 5454 1337 18.6% 24.5% 103

25+ 2740 531 7.4% 19.4% 81

HH With Children: Under 3 2586 619 8.6% 23.9% 100

3-11 years 6308 1456 20.2% 23.1% 97

Under 12 7600 1776 24.7% 23.4% 98

12-17 years 6919 1348 18.7% 19.5% 82

Under 18 12062 2674 37.2% 22.2% 93

Vodka Market in US and Canada

25

Appendix B: Vodka consumption by brand, PMB

Vodka Market in US and Canada

26

Appendix C: Economist, Spirits Consumption by Country