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Flavor: The New ‘Tipping Point: Bourbon vs. Vodka Smackdown?

Posted on  | March 30, 2012   Bookmark and Share
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Malcolm Gladwell’s bestselling book The Tipping Point suggests in its subtitle “How little things can make a big difference.” Well, something similar may be happening in the spirits realm—it involves chocolate cupcakes and black cherries. A recent stock report suggests whiskey marketers are wooing flavor-obsessed vodka consumers as never before.  

That’s the “tippling point” thesis of two stock analysts from Citibank about the possible—and in their view positive—growth prospects of Brown-Forman stock. Now, this article is in no way an endorsement of any stock, but the rationale of the Wall Street analysts does provide interesting food (and drink) for thought, so to speak. What’s their logic? Despite growing numbers of exotic vodka launches inspired by flavors from chocolate cake and toasted marshmallows to gummy bears and PB & J, Citibank analysts Vivien Azer and Geoffrey Small contend flavor-fatigue is setting in with vodka consumers. In an audacious scenario, the Citi analysts argue that bourbon brands—and especially flavored bourbons—could be prime beneficiaries, as their sales were extremely robust in 2011.

But before anyone gets carried away with the “bourbon smacking down vodka” scenario, according to Beverage Information Group, U.S. sales of vodka in 2011 increased at a faster rate than American straight whiskey (which includes bourbon, but excludes blended whiskey): +7.1% versus +2.7%. On a volume basis, vodka’s increase was 10 times larger than straight whiskey’s: a 4.5 million-case gain versus a 400,000 case increase.

Bottom line: Vodka—domestic and imported, kitschy and straight—still rules. However, there’s no denying bourbon and flavored whiskey sales are surging. Rob Mason, director U.S. bourbons at Beam Global, says, “We see innovation as a strong driver of bourbon category growth. We are ‘bullish’ on 2012.”  His optimism is buoyed no doubt by Beam’s latest Red Stag flavors: Honey Tea and Spiced.  
 
Signals at the Bar

Noting a shift in consumer bar calls, Jeff Boyle, a beverage consultant to momofuku ssäm, a trendy bar in Manhattan’s Lower East Side, observes, “Probably the most major contribution to the increase in whiskey and bourbon sales is the resurgence of the craft cocktail.”

Curtis Hancock, mixologist at Panzur, a Spanish restaurant and bar in Tivoli, New York, agrees: “Many of our regulars who were at one time ordering drinks like kangaroos [the correct name of the so-called vodka martini, originally showing up in cocktail books in the early 1950s] or cosmopolitans, are now happily sitting down at the bar and ordering Sazeracs, Aviations and even martinis made with the traditional 2:1 gin to vermouth ratio.”

Jim Shpall, president and CEO of Applejack Wine & Spirits, Colorado’s leading retailer, says, “I have never really seen vodka flavors take off as a sub-category….it’s more a matter of suppliers getting more facings.” He adds, “The rapid growth in artisanal bourbons is a natural extension of our consumers’ interest in craft beers. Colorado is at the forefront of the craft brewing and micro-distilling trends.”

Beam Global’s Mason also notes that “women are becoming more interested in whiskey. In fact, 45% of Red Stag consumers are female. Flavored whiskies, such as Red Stag, are bringing in new consumers who previously only drank white spirits.”

Maxime Kouchnir, VP of marketing for vodkas at Pernod Ricard USA, Absolut’s marketer, counters, “Consumer demand for new flavors remains strong. Our leadership in flavors dates back to 1986, when the brand released its first flavored vodka, Absolut Peppar, to capitalize on the growing Bloody Mary trend.” Absolut has extended—some might say elevated—the flavored vodka category with its limited-edition “City” series, starting with Absolut New Orleans back in 2007 and most recently featuring Miami. “Flavored vodkas and line extensions represent roughly 25% of our business, and we will continue to introduce more leading-edge flavors and line extensions in 2012.”

Where will it end? To paraphrase the classic cliché, one could predict that American cocktail enthusiasts will have their “cake” (as in Cupcake Vodka) and eat it too, with a black cherry on top (as in Red Stag Black Cherry). Cupcakes and black cherries, then, could turn out to be at the fulcrum of the most flavorful “tippling point” in U.S. drinks history.  


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