Flavoured variants offer further opportunities for operators to boost profits
VODKA has been the kingpin of the spirits scene in Scotland’s pubs and bars for some time now.
And it seems its popularity shows little sign of waning.
In fact, the category is in rude health north of the border, according to David McGowan, head of trade relations for Scotland at Smirnoff owner Diageo.
McGowan said the value of vodka sold in the Scottish on-trade is up 4.36% on a MAT basis – a figure which he said shows the spirit is performing “significantly ahead of the market” in Scotland’s pubs and bars; volume is up 1.65%; and distribution is also said to be growing, with 92.9% of outlets now stocking vodka, up from 88.75% a year ago. The average weighted price per 25ml measure has also climbed from £1.98 to £2.02.
“It’s a really nice picture, vodka is doing very well,” McGowan told SLTN.
“Distribution is growing, price per measure is growing and volume and value sales are up.
“Smirnoff is a very significant part of the vodka category in the on-trade; it’s growing at 9.4% which means it’s one of the strongest-performing brands in any category in Scotland.
“For the retailer, if their vodka business is performing, it’s likely that their overall spirits business is performing; and spirits is one of the most profitable parts of a business.”
Phil Keene, on-trade sales director at Whyte & Mackay, whose vodka brands include Vladivar and Russian Standard, agreed that vodka continues to be a dominant force in the Scottish on-trade, where he said volumes are up 1.6% compared to a 1.2% decline for the UK as a whole.
And although he concedes vodka and cola and vodka and lemonade remain among the most popular serves, he said there is growing consumer demand for high-end vodkas, like Russian Standard Platinum, served neat. Cocktails are also continuing to grow in popularity, according to Keene. And he said flavoured vodkas give operators a real opportunity to tap into this trend, without the need to offer complex drinks.
“Flavoured vodkas only account for a small segment of the Scottish on-trade; however, an increasing number of brands, such as Vladivar, are releasing flavoured varieties,” said Keene.
“This provides an opportunity for outlets to create a varied cocktail menu without having to buy in too many ingredients.”
The role flavoured vodkas can play in creating simple but effective long mixed drinks and cocktails was underlined by Ian Peart, on-trade channel director for spirits at Absolut owner Pernod Ricard.
The Absolut Flavours range is experiencing “strong growth”, he said, with volume up 7.8% and value sales up 14.8% – growth Peart said is partly due to their role in cocktails.
With so many new products vying for space on the back-bar, vodkas need to prove their place.
“Cocktails continue to present a significant profit opportunity for pubs, not only because 87% of consumers say they drink cocktails, but because, on average, mainstream cocktail stockists sell 36% more spirits than non-cocktail stocking equivalents,” he said.
“Using premium vodkas as a base for these will, therefore, help increase profit margins.
“As 64% of consumers’ favourite cocktails are based on rum and vodka, we expect brands like Absolut Flavours to carry on experiencing strong growth, particularly as they can be used to create very simple, quick and easy-to-make mixed drinks that don’t require complicated training or equipment.”
McGowan at Diageo also highlighted the opportunities presented by flavoured vodkas.
“Flavoured vodkas are a huge growth area for retailers,” he said.
“There’s a lot you can do with the different flavours; retailers should look at the ones that are right for their outlet and at the opportunity to extend consumer reach; with the backing of a brand like Smirnoff, that builds consumer trust.
“Retailers should take advantage of some of the new flavours on the market, like Smirnoff Espresso, Vanilla or Gold, and the different serves that go with those.”
Jonathan Cornthwaite, brand manager for Icelandic vodka Reyka at First Drinks, also pointed to a growing demand for cocktails and “unusual long drinks”, saying consumers are becoming “more experimental” with flavour profiles.
“Although it’s the more sophisticated cocktails that are driving interest in the vodka category, bars continue to provide drinkers with simple serves, choosing mixers such as ginger or soda with a fruit twist over simple mixers such as cola,” he said.
“Reyka is produced using raw, natural ingredients, giving the product a clean and smooth flavour profile, ideal for mixing in a cocktail or drinking in a more simple fashion, with a mixer such as soda or served neat over ice.”
In addition to becoming more experimental with flavours and serves, consumers are also seeking out “niche brands with strong heritage”, according to Cornthwaite, who advised operators to bear this in mind when choosing which vodkas to stock.
“With so many new products vying for space on the back-bar, vodkas need to prove their place and licensees should consolidate their selection to accommodate the trend for spirits with interesting stories to tell,” added Cornthwaite.
“It should also be remembered that the drinking experience includes not only the drink itself but how it is served, the theatre of the serve and the glassware in which it is delivered.”