Vodka in the age of the celebrity brand
Lawsuits come in thick and fast when you’re among the world’s top 25 alcoholic drinks suppliers and have a higher turnover than many small countries.
Gallo has tangled with murderers and drug dealers — who sued the brand after blaming their crimes on drunkenness — as well as consumers who bought fake Pinot Noir and several snarling lawyers during bitter trademark disputes.
But even the seasoned combatants at Gallo must have baulked at the news they were in the firing line of Cuban-American rapper Pitbull.
The firm created a cocktail called Pit Bull, which uses its New Amsterdam vodka as a base, mixed with lime, grapefruit juice and soda, but the cue-ball-headed rapper — who has his own brand of vodka called Voli — is now demanding Gallo drops the name and compensates him.
He may have looked far from menacing while prancing around the World Cup opening ceremony in a vintage Brazil shirt and ultra-tight, blindingly white trousers, but he has previously said he chose his moniker because pit bulls “bite to lock”.
“The dog is too stupid to lose,” he said. “And they’re outlawed in Dade County. They’re basically everything that I am. It’s been a constant fight.”
Terrifying stuff. The story gained several column inches in the international media and illustrates the stranglehold celebrities are slowly gaining on the spirits industry: Pitbull’s brand lines up alongside rival vodkas from the likes of Dan Aykroyd, Donald Trump and P Diddy.
“We find the strongest performers are always the bling, celebrity-endorsed vodkas,” says Dawn Davies, category manager at Selfridges. “If it is bling enough and looks exciting then it actually sells itself in this category.”
Just like Pitbull, vodka is top dog in the spirits market. It accounts for a third of all sales — dwarfing its rivals — and is growing in popularity, up 0.3% in volume and 4.7% in value (Nielsen, year to May 24). But categories like gin are starting to nip at its heels.
“Vodka always performs strongly for us but we are seeing slower growth than in categories such as gin,” says Davies.
Vodka is essentially a tasteless, neutral grain spirit, leaving gin, rum and others far more scope to experiment with flavours, ingredients, ageing and all the other things that create differentiation in an exciting category.
The saving grace for vodka could be the emergence of flavoured vodka.
“It is a key trend and growing well ahead of the category, with very strong value growth suggesting true premiumisation,” says Nielsen analyst Natasha Kendall. “The trend for flavour innovation has been critical in driving growth for total spirits over the past 12 to 18 months.”
But while flavoured vodka is up 10% in value, it is only worth £32.9 million — a fraction of the £1.1 billion vodka category (Nielsen).
The bulk of the market is made up of neutral grain spirits, so producers have to resort to measures like blinging bottles and celebrity endorsements to help their brands stand out.
Others talk up the elaborate filtering system and the purity of water used to make the spirit as clean as possible.
Leanne Davidson, brand manager for Beluga vodka at Mangrove, says: “Water is taken from 300m deep artesian wells in the bedrock of Siberia and is combined with a malt spirit that utilises barley grown in western Siberia, which is known for its environmental purity.
“These carefully selected natural components pass through a triple-filtering system, after which the vodka is rested for a minimum of 30 days to mellow the spirit and enhance the flavour.”
Jessica Lace, senior brand manager at Smirnoff, which is by far the UK’s biggest spirits brand, says: “The base spirit is distilled three times through a continuous production method, which is then filtered 10 times through activated charcoal to remove all and any remaining impurities.
“Every single drop takes eight hours to filter through 12 tonnes of northern European hardwood charcoal. The advantage of a 10-stage filtration is that it produces an incredibly smooth spirit with none of the sharpness you typically get from other vodkas. The result is a pure, clean and ultra-smooth vodka, the perfect base for mixed drinks.
“Smirnoff was judged the hands-down favourite in the 2005 New York Times blind taste test of the world’s best vodkas. And as recently as last year the Huffington Post conducted the same test, with Smirnoff again coming out on top.”
Gin’s soaring status has been driven by a range of small-batch creations from exciting micro-distilleries, but Davies at Selfridges says boutique vodka brands are starting to catch on. “We are slowly seeing smaller boutique vodkas driving more interest which is great to see,” she says. “Smaller brands that we love that do well are ones like Konik’s Tail, Black Cow and Element 29.”
She adds: “Well-known premium vodka is easy to sell as consumers are very brand loyal in this category and are driven to purchase in a very visual manner.
“Large-format bottles are surprisingly popular. The difficulty is trying to get consumers to buy smaller brands, but we have found that tastings really drive these sales.
“The packaging is key but brands like Grey Goose and Crystal Head are doing some great things with limited editions and, of course, the most famous are Absolut’s yearly editions, which sell very well for us and give value by offering something different to the regular bottle.”
Suppliers and analysts are convinced vodka has a healthy future as consumers seek premium brands.
“We have seen premium vodka performing very well, up 12.1% value and 9.4% volume, which is another key trend we have seen in spirits,” says Nielsen’s Kendall.
Davidson at Beluga says retailers shouldn’t worry about vodka’s lack of complexity compared with rivals and should hone in on its clean, plain credentials.
“The beauty of vodka is in its simplicity,” she says. “Ensuring you use only the finest raw ingredients and expert craftsmanship will mean only the most refined vodka will be created and appreciated.
“We have seen so many exciting developments within the vodka category of late, with quality brands from the UK, Netherlands, Kazakhstan and USA to name but a few, including of course Russia and Poland. This can only be seen as healthy for the category as a whole as it encourages producers to stay innovative and to never rest on their laurels.
“Without the flexibility the sector enjoys, this diversity would not be possible and we believe this should be celebrated.”