Super-premium spirits have revolutionized the beverage industry. One or two sentimental consumers out there might long for the return of the days of the $2 cocktail, but few if any bar and club owners — or bartenders and cocktail waitresses for that matter —  ever would  want to give up the revenue-rich modern gig inherent in $10 signature cocktails and umpteen-dollar Martinis.     No doubt, a huge chunk of that extra change now in the house was earned through the sales of high-end vodkas –– from premium brands such as Absolut and Stoli and Smirnoff, to super-premiums Grey Goose, Belvedere and Vox. Not to mention the luxury subcategory of spirits such as Ultimat and RU Vodka, that is driving even more lucrative bottle sales.
    But for all the effort that goes into giving the  venues new vodkas with which to trade up customers, flavored vodkas continue to capture a larger percentage of overall vodka sales each year. The Distilled Spirits Council of the United States (DISCUS), reports that flavored vodka represented 12.57 percent of the category in 2004, up from 11.82 percent in 2003 and 10.12 percent in 2002.
    “Flavored and super premium vodkas are leading the growth in the category and have been for the last several years,” says Shawn Kelley, director of public relations for DISCUS. “Mixologists love the flexibility with the flavored vodka for creating new cocktails.”

Pot of Gold
    For the typical operator, it just doesn’t get any better than that. It’s like wishing on a rainbow. Or so it would seem by the numbers alone.
    But while spiking up volume sales, the flood of new flavored vodkas has driven down the average price point until it now is running counter to the pure variety.  In 1998, based on a market analysis conducted by Moët-Hennessey, 80 percent of flavored vodkas sold above $16.99. Yet by 2003, 60 percent of flavored vodka brands sold below $11.99 at retail.
    A lesson to draw from this is that patrons are trading down in price because they can’t distinguish a $10 flavored vodka brand and a $20 bottle.
    Even so, there are nuggets of pure gold yet to be mined by entrepreneurs who appreciate the sales bonanza of flavored vodka in all of its nuanced complexity. Another insight that should not be missed is the fact that the public has bought in to the flavored vodka/cocktail craze in a big way.
    If pure, pedigreed vodka tends to stratify establishments and customers, flavored vodkas are the great equalizers. Everyone, from the quaint neighborhood bar to the uptown ultra-lounge can be a player. And the remaining 40 percent of flavored vodkas commanding higher prices leaves plenty of room for the category to grow upon.

Buyers’ Market
    With new flavors in every price range being launched on a routine basis and mega-marketing dollars feeding an insatiable demand, the flavored vodka category is a buyers’ market to be sure.
    Smirnoff’s growing line of flavored vodkas is fueling sales, posting a 4.7 percent increase for Diageo in the period ending last October. Top sellers include Smirnoff Raspberry, Smirnoff Vanilla, Smirnoff Citrus and Smirnoff Green Apple.
    The newest flavor –– launched in January –– is LIME, described as a refreshing, smooth flavor that mixes well with cola or tonic.
    Skyy Vodka is cashing in with a portfolio that includes Skyy Citrus, Skyy Berry, Skyy Vanilla, Skyy Orange, and Skyy Melon. Currently, Skyy is ranked as the No. 1 growth spirit among Adams’ Fast Track Brands, with 1,880,000 9-liter case sales in 2004.
    Absolut, with flavors such as Peppar, Citron, Kurant, Mandrin and Vanilia, is as bullish as ever about flavored vodka, recently adding two new flavors with its launch of Absolut Apeach and Absolut Raspberri. The company won’t reveal figures for its new Absolut Apeach, yet the new flavor launch is currently the buzz of the industry.
    And the recent launch of Wild Berries vodka by Finlandia, complete with a refreshing new cocktail all its own, styled the Wild Berries Splash, adds to a flavor family that already features Mango, launched last August with its own corresponding Mango Mojito libation, as well as Lime and Cranberry.
    “Finlandia Wild Berries has the flavor consumers are looking for,” says Jennie Meador, Finlandia brand director. “Our research shows that trends in food, fashion and cosmetics point to a positive appeal of the Wild Berries flavor.”
    Today, spirits companies cannot afford to be without flavored vodkas in their portfolios. The growing popularity of Boru vodka and its flavors, Citrus, Orange and Crazzberry, has helped build Castle Brands into an spirits contender. And Infinium Spirits (formerly Wilson Daniels) is looking to do the same with its line of Seagram’s flavored vodkas.
    Indeed, the rising tide of flavored vodka sales is lifting all boats.
    “Often I hear, ‘I don’t like vodka, but I love to drink Orange V on the rocks,’” says Dave Schmier, president of Dynamic Beverages, which owns and distributes Orange V.
    Solid sales are driving innovations such as Millennium Import’s Belvedere Cytrus (pronounced Sit-troos) and Belvedere Pomarancza (pronounced Poe-ma-rahn-cha), two noble spirits out to reclaim the higher profit ground for the flavored vodka category.
    “The new Belvedere flavors will give you an opportunity to trade your consumers up to luxury price points in the flavored vodka category,” reads a brochure for the two flavors that were created by Millennium Import Co. LLC at a cost of $2 million.
    This forward momentum also is apparent in on-premise fusion programs such as the one created by Frïs vodka. At Atlanta’s Django Gypsy Kitchen & Saloon, Co-Owner Brendan Brennan keeps four Frïs infusion displays at the ready on the back bar at all times.
    “I keep a pineapple and a mixed berry, made with blueberry, blackberry and raspberry. I also do a mango and strawberry, and I do a pomegranate in season that I change to peach.” Brennan says the infusions create interest among customers.      
    “It opens them up, so that the bartender can suggest the infusion and what is good. Customers want to experience something new. I think they want to be taken outside of what is already there.” NCB