Premium and flavoured products driving category, firms say
PROMOTING premium brands as a trade-up can help operators boost sales of vodka, according to brand owners.
As bar visits have become less frequent amid the economic gloom, spirits producers and distributors say offering premium and flavoured vodkas is key to maximising sales as customers treat visits to bars as an ‘occasion’.
It’s a view that appears to be backed up by figures from CGA. Quoting the market analyst, Pernod Ricard, which owns the Absolut brand, said the volume of vodka sold in the UK’s bars and clubs was down 5.3% year on year, while the value of sales rose 1.3%.
Flavoured vodka offers an opportunity for outlets to drive vodka sales with new and exciting innovations.
The volume of standard vodka sold in the on-trade in the period is said to have fallen 6.5%, with sales down 0.6% in value terms; meanwhile premium brands saw volume growth of 0.9%, with sales up 10.2% in value terms.
Ian Peart, on-trade channel director for spirits at Pernod Ricard UK, said the growth in premium vodka sales highlights a willingness by consumers to “trade-up and treat themselves” when they are in the on-trade, making premium vodka a “must-stock” for licensees.
He urged operators and bar staff to adopt up-selling techniques to encourage consumers to switch to premium brands.
“The concept of up-selling is an integral part of the premium vodka opportunity,” he said.
“Our Premium Edge research found that 56% of vodka drinkers are willing to pay more for vodka if an up-sell offer is made.
“A key point to remember about up-selling is that consumers recognise the quality-to-price relationship; 62% of consumers view more expensive vodka brands as almost always being better quality and are willing to pay more to trade up.”
Flavoured vodka is another area that offers sales potential for bar operators, according to Andrew Leat, on-trade category manager at Smirnoff owner Diageo.
He reckons well-trained knowledgeable bar staff are key to maximising sales of flavoured variants.
“Flavoured vodka offers an opportunity for outlets to drive vodka sales with new and exciting innovations – by educating bar staff on which mixers go with each flavoured vodka and ensuring finished flavoured drinks are included on the bar menu,” said Leat.
Pleurat Shabani of Konik’s Tail vodka also highlighted the importance of staff who engage with consumers, saying that “training is key” to maximising sales.
“What operators stock in their bar and why they stock it makes for great conversation,” he said.
Whyte & Mackay, whose vodka portfolio includes Vladivar and Russian Standard, said visibility of brands can also impact on sales.
“Don’t clutter your bar with endless amounts of POS materials,” said John Bradbury, UK sales director at Whyte & Mackay.
“Use only those that are useful or necessary to promote the product or a specific piece of marketing activity. Use too much, the back-bar will look messy and cluttered.”
The ‘less is more approach’ suggested by Bradbury appears to correlate with research carried out by Pernod Ricard UK.
Brands which have a strong heritage will stay at the forefront as consumers seek brands they have confidence in.
According to its ‘Premium Edge’ research, drinks menus at the bar have the most influence over consumer choice with those on tables coming second; a quarter of purchases are influenced specifically by the back bar display, according to Pernod Ricard.
Going forward, the shift towards premium and flavoured brands looks set to continue.
“This year I think we will still see people going into bars but less often,” said Bradbury at Whyte & Mackay.
“When they do so they will look to trade-up and spend more money as going out is viewed as a special occurrence rather than a frequent one.
“Brands which have a strong heritage and resonance with consumers will stay in the forefront as consumers look to try or purchase brands that they are confident in.
“Flavoured vodka will also continue to grow.”
Image – More than half of vodka drinkers are said to be willing to pay more for vodka if an up-sell is made.