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Vodka category risks ‘innovation fatigue’: Euromonitor analyst

By Ben Bouckley+

27-Nov-2012
Last updated on 27-Nov-2012 at 21:12 GMT

After a rash of ‘new launches, gimmicky stunts and outrageous incarnations’, culminating in bubble gum-based vodka, Euromonitor International is warning of potential category ‘boom and bust’.

Euromonitor International alcoholic drinks analyst Spiros Malandrakis is a wizard of the written word in English, always entertaining and often prescient on trends. In a new company blog post, he does not mince his words when it comes to vodka, which he said could suffer the same fate as alcopops.

“Saturation takes hold gradually at first, then all at once. Vodka’s red star still shines, but its message is getting lost behind a cacophony of flavored noise and designer gimmicks. It’s time to get back to basics,” Malandrakis wrote.

A “tsunami of innovation” risked devaluing the category – and hinted to rapid world growth in the category – Malandrakis said, but he noted that Euromonitor data showed that global sales were set to register flat volume growth in 2012.

“Over the past year, the now ubiquitous, versatile and essentially neutral spirit has branched into offerings that are either flirting with the absurd or crossing into the ludicrous” he added.

Smoked salmon flavored vodka…

Flavor variants have spanned Van Gogh’s Peanut Butter and Jelly, Pinnacle’s Pumpkin Pie, Chocolate Cake and Whipped Cream, smoked salmon and even Mary Jane’s Hemp Vodka, which Malandrakis said, “took gimmicks to, well, new heights”.

“There was – a swiftly withdrawn – Allah’s Vodka in Kazakhstan, a perplexing luxury rum-flavored vodka in the UK, and a sauvignon blanc-based concoction that somehow ended up in Absolut’s ever-expanding stable.”

The crowning glory was Master of Malt’s self-styled ‘world’s hottest’, Naga Chilli Vodka, Malandrakis said, “which would have been amusingly interesting if it was actually adding much to last year’s practically undrinkable 100,000 Scovilles variant”.

“Fittingly, and like its predecessor, it came with a skull-and-crossbones-embossed lead security seal,” the analyst added.

But this symbolism could be applied to this innovation tsunami, which risked confusing drinkers and drowning brand equity “under consecutive and conflicting waves of innovation”, Malandrakis said.

Nonetheless, the analyst said that category dynamics were more bullish that figures suggested, and primarily made for grim reading due to tumbling consumption rates in Eastern Europe and Russia.

What’s puncturing vodka’s global spirits?

Eastern Europe accounted for 2.4bn of the 3.8bn liters sold globally in 2012, Malandrakis said, so it was “easy to locate the major puncture in the category’s highly inflated global volumes”.

“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.”

That said, beyond western Europe, emerging markets seemed to be embracing premium vodka, Malandrakis added, while the key US market remained “infatuated” with the category, with 2% growth in 2012.

“The problem then, is not current dynamics or even medium-term prospects. The problem lies with the longer term repercussions of pushing innovation to such extremes that the end product is more reminiscent of an RTD hybrid than of a heritage-steeped spirit,” the analyst concluded.

(*Register here for free access to the first ever online event devoted to Operational Efficiency in food and beverage processing on November 29, organized by our sister site FoodProductionDaily.com and William Reed Business Media.)

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