IWSR has reported positive market trends in the vodka category as producers tap into contemporary trends such as flavour-led expressions, sustainability and RTDs.
Despite its low performance in recent years when compared with other spirits categories, the drinks market analysis firm has identified a shift in the global market for vodka.
Within the vodka category, IWSR reported a trend towards flavoured expressions with additional ingredients. Particularly, the use of distilled botanicals has become a popular way of extracting flavours, as opposed to artificially flavoured vodkas.
Karu Distillery, for example, has received global recognition for its Morita Chipotle Vodka, named the World’s Best Infused/Botanical Vodka at the 2023 World Vodka Awards. The vodka features the botanicals of Australian limes, Mexican chipotles and agave syrup to produce its signature flavour, balancing sweetness and smokiness.
The contemporary trend of flavour driven spirit innovation has started to represent an overlap between vodka and other spirits categories. Consumers who are already familiar with botanical spirits, such as gin, are resonating with the use of similar flavours and ingredients that are quickly becoming associated with vodka. Manly Spirits Co.’s Marine Botanical Vodka is an example of this overlap, distilled like a gin using Australian native botanicals, but without the use of any Juniper.
Rye has long been the basis of many American whiskeys, a market segment that Australian-made Idle Hour has now tapped into with its Rye Vodka, a full-bodied vodka with distinct flavour.
According to IWSR, vodka is well placed to capitalise on the growing demand for RTDs and RTSs while the demand for convenience grows. In the US, vodka-based RTDs command the largest share of the market, a trend that is predicted to expand globally.
Vodka-based seltzer Hard Fizz recently signed a new distribution deal with SouthTrade International to facilitate the rollout of new product lines and strengthen its RTD offering. Having sold more than 4.5 million cans worth more than $19 million, Hard Fizz has become Australia’s highest ranked independently owned seltzer by value.
Sustainability at the core
Data from IWSR shows that sustainability has been a growing trend in the spirits category for some time now, with vodka brands currently leaning into their place of origin. As well as heritage cues, brands are demonstrating transparency around ingredients and distillation.
80 Proof Australia’s Ugly Vodka is an example of an environmentally conscious product, made locally in Victoria using rejected apples to reduce food waste and greenhouse gas emissions. The innovative vodka brand presents consumers with an eco friendly option by turning imperfect apples into a sustainable spirit.
As is the trend across most spirits categories, consumers are leaning into premium vodka products. IWSR identified an expansion in volume consumption by six per cent in the global premium-and-above vodka segment in 2022.
According to IWSR, the move towards premium has also been noticeable in the growing markets for flavoured vodka and vodka RTDs and RTSs. Idle Hour have quickly expanded into the market for premium RTDs, launching a native-inspired premium RTD with a blend of its award-winning Rye Vodka and soda water.