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At the turn of the millennium we are all future-oriented. Design in all areas, from cars to sunglasses to furnishings, favors cool, sleek, clear colors, like this clear spirit. Environmentalism plays into this with an emphasis on purity: clear beverages and pure flavors are winning shelf space everywhere, including in the liquor store where purity is a large part of vodka's image.

According to figures released in January, vodka category growth in Massachusetts is a very healthy 11% (in the most common measure, 9 liter cases). Domestic vodka shows a 9% increase in the past year, and imported vodka continues its trend with a very bright 15% growth in this segment of the category. Massachusetts is moving in tandem with the rest of the country - and perhaps a bit ahead of the US trends in some areas. Lower- and mid-price vodkas are loosing market share, while premium and superpremiums are more than making up for this, for a total increase in sales. Incidentally, this also reflects similar growth in the white spirits category in general.

Why is this growth in the vodka market occurring? The reason is the economy. After the excesses of the 1980s, even the rich eschewed conspicuous consumption for while, in deference to those of us unfortunates who were suffering in the recession years. But all that is over now, especially in Massachusetts where the unemployment rate is at a historic low. In addition, many of the newly-rich are young enough not to have been in the workplace during the recent recession.

THE MARKET NOW In this country, total consumption of distilled spirits increased nearly 2% last year over the year before. Non-whiskeys led this march with a 3.3% increase. The vodka category led this increase with a total improvement in sales of 2.3%. Most significantly, imported vodkas grew at 9% last year, which was ten times the domestic improvement in the market.

US leaders in the growth category were Absolut (6.1%), Stolichnaya (8.8%) and Ketel One (41.7%). Domestic Smirnoff showed an increase of 5.4%, leading Gordon's (4.3%), McCormick (7.1%), Skyy (17.3%), followed by Burnett's (19.2%).

In Massachusetts, the leaders were Smirnoff, Gordon and Barton for domestic brands, followed by Popov, Wofschmidt, Fleischman, Relska, Old Mr. Boston and Kamchatka. Imports show leaders Absolut, Stolichnaya, Ketel One and Finlandia, in that order.

Massachusetts ranks ninth in the nation in terms of vodka share of distilled spirits. Currently there are about 200 vodkas in the marketplace in Massachusetts alone.

STORIES OF THIS DECADE If there was a story of the decade, looking back from the near-millennium vantage point, it would be the unprecedented skyrocketing market share of newly-introduced vodkas and vodka brand extensions, which has taken place during the 1990s.

The domestic product, Skyy vodka, is the prime example of a new brand ascending to prominence in consumer perception, as well as in sales during the past few years.

Today Skyy is growing at the rate of 20% per year. "In the past year Skyy has stepped up its investment and variety of activities around the brand," explains Brand Director Teresa Zepeda. The company is focusing on and supporting the film community because this reflects the target consumer's interests, and film is quite influential in this upscale, young market of 21-35 year olds.

Last summer Skyy debuted a new promotional campaign of images without copy entitled "Skyycinema" which shows alluring scenes resembling old movies. A new set of five images appears every 6 months, with the 3rd set of ads beginning in August 1999.

DOMESTIC TRENDS AND CAMPAIGNS For the rest of the domestic market, most of the major selling products are found under one roof: United Distillers and Vintners, North America. UDVNA's Northeast Director of Marketing for White Spirits is the often-quoted Steve Wallet, who explains that his territory, the Northeast, mirrors the rest of the country. "It's a highly developed market," he says. Superpremiums are up 4%-5%, like his imported Stolichnaya brand. Premiums such as Smirnoff are also up 4%-5%, while mid-low brands have been losing a couple of points. For these products, the category in his region shows a total of a 2% increase. In terms of products, Stolichnaya has been adding flavored vodkas. The core flavors are Orange, Raspberry, Vanil and Limonaya. The Vanil is currently showing a 30% growth in the market - consumers are mixing it with colas, for the most part. But Orange is still in first place, however. In the Northeast, the orange flavor is very popular - have you seen the "creamsicle" shelf tag? Flavored vodka is growing overall at a 13% rate.

Wallet is pleased with Smirnoff's growth as well. In the US, Stoli has 3% of the market and Smirnoff a very large 17%, according to Wallet. The company continues to support its current "Silhouettes" ad campaign, targeted to core users 25-40, in print and outdoor ads. Advertising focuses primarily on on-premise brands, both nationally and regionally. Smirnoff has a quality image, Wallet says, while Stolichnaya has more of a fashion image. Of these two products, Smirnoff is referred to as their on-premise brand, while Stoli is the favored off-premise brand. Mid-priced Gordon's is primarily an off-premise brand, as is Popov, but Gordon's is the larger seller in Massachusetts.

Though UDVNA finds the same trend in losing share in mid-low price brands, the company's mid-priced brands command an extremely respectable share of the total market: Popov has an 8% share of total vodka in the US, and Gordon's has a 6% share. Wallet asserts that "Consumers are trading up to superpremium and premium because of the health of the economy."

Anecdotally, a local retailer in an upscale Boston suburb remarks, "Even the Zhenka people are going to Gordon's. It doesn't happen often, but once in a while" - enough to get noticed. And this is at a store where they've also found sales consistent with market trends, with superpremium sales "slightly above average." However, in this retail establishment "flavored vodka sales are stagnant," is the report, perhaps reflecting an older clientele or other interests of the consumers, such as beer and wine, outside of the urban area. This store had 15 brands on the shelf early in the summer, with only one or two flavored vodkas at any given time.

Barton, Inc. remains solidly in the race in a different price range. Their Mr. Boston brand is a representative of the solid domestic mid-low range product. This is Barton's biggest seller. According to Barton, Inc.'s Marketing Manager Sharon Keld, this is where they position their biggest promotion - in price/value. Recently, they submitted Mr. Boston to the Beverage Testing Institute, where they received both "recommended" and "best buy" labels. They now have case cards and shelf talkers touting this status. This year's sales were up 15% in the first quarter - while last year, in keeping with trends in the industry, sales were flat.

Mr. Boston is a big seller in New England because of its name, of course. And because it is known through the Mr. Boston Bartender Guide, which Barton puts out in partnership with Warner Books. This brand was originally developed in Boston, and Barton acquired it about three years ago.

Barton's next biggest brand is Fleischmann. This has more marketing support, with a big summer pull topper which will turn into a winter pull topper. It's considered a value brand, and sales have been flat this year, but it "has been grabbing market share," says Keld, "because sales overall in this category are declining."

IMPORTED SUPERPREMIUMS In the imported superpremiums, as noted above, we see tremendous growth, and Absolut is the leader. Not only is it a major seller in the vodka category, but Absolut is the third largest brand of all distilled spirits in the US," according to Marketing Manager Drew DeSarno. This year, Absolut will mark its 20th anniversary in the US, and Boston was the first city where this Swedish import was introduced in 1979. "Boston was, and is, one of the key imported vodka markets," explains DeSarno. Apparently this was the correct way to introduce the product to the US: Absolut has maintained its growth, and last year was up 6.1% over the year before.

Absolut has only one line: vodka in various sizes. However, there is also a brand extension of flavored vodkas. This summer the company has introduced its first new flavor in seven years, Mandrin. The choice of a tangerine-orange flavor follows Kurant (black currant), introduced in 1992, and Citron and Peppar before that. "We've been looking at doing a new flavor for a while," says DeSarno cautiously. "Two of the most vital areas within vodka growth are superpremiums and flavors." For Mandrin, there were two-page national ads in books in July with "Absolut sighting" followed by the "Absolut arrival" page. "We're also converting the limited outdoor schedule we have to Mandrin," adds DeSarno. PR and event support are part of the package, along with more off-premise support and on-premise tasting in the states that allow it.

Nolet Spirits has an entirely different emphasis in its marketing campaign for superpremium import Ketel One: its history - distilled by the same family in Holland for over 300 years, since 1691. Currently, the company is run by a 10th generation Nolet, with his two sons already making sizeable contributions to the company.

Introduced to the US only in 1992, Ketel One quickly took off here, and also become a favorite of wine-drinkers. Indeed, Marketing VP Ron Lewos likens selling Ketel One to selling wines with its romance and history, and its secret family recipe. "Handmade in small batches" is the vodka's proud claim.

Growth in Massachusetts is a little ahead of the national trend in both restaurants and retail. This year, with imports up 6-8%, Ketel One has seen much more dramatic growth, with an astounding increase close to 40% so far.

Lewos says that bartenders nationally have been very supportive of the brand. Ketel One was one of the first to educate bartenders and waitstaff, with on-premise tastings and seminars.

Finally, we turn to Finlandia, the fourth largest imported premium in our market. Last summer Finlandia was repackaged which increased its positioning potential, relates Brown Forman's Brand General Manager of Finlandia Vodka, John Vidal. With this "renaissance plan," the brand grew an astonishing 30% in the first nine months. The company is "planning for 30%-40% growth in the next few years in our quest to double our market share," Vidal reveals. Currently Finlandia has 2% of the imported market share and aims to grown to 4% in the next couple years. He's pleased that in Massachusetts they have done an outstanding job in gaining retail support.

Finlandia was the first of the post-modern imported vodkas, before Stoli and Absolut, Vidal reminds us. It was introduced in 1972, at only a few dollars more than Smirnoff. Since then, Finlandia's pricing has increased to near parity with other superpremiums such as Absolut.

Finlandia is also reintroducing a flavored line extension of the brand - a newly formulated, naturally flavored cranberry vodka will go on the market September 1.

THE FUTURE? In an extremely informal survey of recent literature on white spirit sales, I've found that everyone sees more superpremium growth at the expense of mid-low range product in the near future, as the economy continues to be strong. However, there's an even spread in what people think will happen if the economy collapses. Some great minds believe superpremium sales will remain strong - as high-end luxuries do. Some believe these sales will be strong because once people have tasted the best they will insist on it. And some believe that trends will be reversed and mid-low range product will experience the greatest growth. When might this happen? No one can say.

And what about flavored vodkas? We are not yet in the position of the UK, where I understand city pubs are catering to younger patrons with a "candy store" of a drinks cabinet: chilled, glass-fronted refrigerators have started appearing, carrying all flavors of vodka, from the traditional fruit flavors such as black currant, to more extreme sweet experiences such as chocolate and creme de menthe. With the largest selling brands introducing flavored extensions of their lines, it seems this product is here to stay for a while. I'm sure everyone is monitoring the situation, but this summer, it's all about consumer enjoyment. Whatever the customer wants: that's the right product to stock.

"You can't sort anything out without vodka" allegedly an old Polish saying.

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