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The American Mixologist Online® Newsletter Vol. 17, No. 15 All Rights Reserved
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The Business Side of Vodka

These are the best of times for vodka enthusiasts. The finest examples of the spirit are readily available and waves of new, high quality brands continue to cross our shores, providing operators and consumers alike the opportunity to enjoy the hunt for the next hot new vodka.

The vodka category continues to grow unabated, and according to Impact, it is expected to maintain this upward spiral through 2007. Vodka dominates consumption figures, accounting for a quarter of all distilled spirits sold in the U.S. While interest in tequila and rum are also on the rise, vodka clearly remains America’s spirit of choice—something that won’t likely change for the foreseeable future.

In a country that loves throaty V-8s and bone-crunching sports, how did something so pristine and subtle grab the limelight?

One explanation behind vodka’s market dominance is its mixability. The spirit is featured in more recipes than any other type. Armed with a top-shelf vodka even time-strapped professionals can become capable mixologists.

“High-end vodkas have been the driving force behind the decade-long resurgence of the cocktail,” says Loren Dunsworth, owner and operator of Lola’s in Hollywood, birthplace of the Appletini and nightclub of the stars “There would be no Martini renaissance without the current roster of super-premium vodka brands. Kamikazes, White Russians, Lemon Drops and Bloody Marys all derive their personalities from vodka. The Cosmopolitan wouldn’t exist without Absolut Citron.”

Drinking great vodka is a one-of-a-kind experience, another thing that has captivated consumers. Its transparency and ethereal body often gives no indication of the wafting bouquet and payloads of flavors in the offing.

Today, vodka drinkers are savvier and more discerning. Judging by the rapidly expanding super-premium sector of the category, people have developed a taste for the good stuff. And as it turns out, the good stuff is just about the most intriguing spirit in the distiller’s repertoire.

To the uninitiated, vodka seems like an uncomplicated proposition. But that’s far off mark. They are the unique product of microclimate, technique and water. Their base commodities, be they grain, grapes or potatoes, are nurtured by the sun, rain and soil. Distillation then renders their essence into the lightest of all spirits, one unfettered by the weighty effects of barrel aging. The character of the water is a most telling ingredient, however. Water is what gives vodka its singular identity—a genetic fingerprint, if you will—which in respect to the top-end brands is why no two are alike.

Perhaps vodka’s ace in the hole is its perceived value. From top to bottom the category offers consumers a lot of bang for their buck.

 A Wall of Vodkas
One question persists, however, regarding the long-term prospects for the category; namely, is the steady stream of new vodka brands inundating the marketplace? While providing consumers with a huge selection from which to choose, when does it become overwhelming and ultimately send consumers scrambling to other spirits?

“To some extent, distributors, bartenders and consumers are a bit bewildered by the wall of vodkas brands—so, yes, the market is becoming somewhat saturated,” contends Tim Clarke, CEO of Shakers Vodka, the first ultra-premium American vodka. “On a business level, it’s tough for new brands to get mind share from distributors and shelf space in stores, restaurants and bars. However, there’s always room in the drinks market for new, innovative vodka brands that are compelling. With the proliferation of new brands, you must have a product that delivers, a package that drives trail and a brand that people can identify with, or you’ll never break through the clutter.”

Attempting to penetrate that clutter are producers Anistatia Miller and partner Jared Brown. After four years in development, they recently launched ultra-premium Heavy Water, a Swedish vodka distilled from winter wheat and spring water from an underground aquifer.

“Is the market being over-saturated with new brands? Definitely,” says Miller. “We knew going into this that we couldn’t compete with the major players and their huge marketing budgets, so we’re purposefully aiming at being a boutique brand. We anticipated that the market would shift from popular brands to boutique brands, which appears to be the trend. Ours is a vodka made by passionate cocktail drinkers for discerning cocktail drinkers.”

The torrent of new vodkas raises the question of how operators determine which brands to stock. Limited back bar space dictates that some means of culling through these new offerings be applied.

According to Lola’s Loren Dunsworth, deciding which brands to carry and which to say no to is a difficult proposition. “I rely on intuition and anticipating what new brands my clientele will find particularly engaging. For instance, there are several new ultra-luxury vodkas on the market that are too expensive. While price is often seen as a reflection of quality, they’d push drink prices well past what I think our guests are comfortable paying right now for vodka. That may change in the foreseeable future, and when it does, I’ll bring those brands in.”

Adam Seger is the general manager, sommelier and cocktail authority at Chicago’s Nacional 27, a classy Pan-Latin restaurant in the Lettuce Entertain You portfolio. His approach to stocking new brands is predicated on carefully delineated criteria.

“The first of those factors is whether the new brand fits into our restaurant’s concept and marketing position. Secondly, the product has to be of impeccable quality and taste. That’s a rather significant hurdle, one that eliminates a fair percentage of candidates. Next is whether the new product will generate more profit than a comparable brand. For example, I’d be favorably disposed to a brand that offers us a higher financial return than a similar product. Lastly, I consider the level of marketing support the supplier is bringing to the table. Four green lights and I’ll give the new brand a shot.”

In an image conscious society, what role does packaging play in the grand scheme of things? Anistatia Miller contends that consumers purchase a product for the first time based on its packaging. The second time they purchase the brand the decision is based on taste. “People ultimately know a good spirit from a bad one.”

Award-winning Shakers Vodka has carved out a sizeable niche in the marketplace. Taste and superior quality have sustained its rapid growth, but what impact has its singular bottle shape played in its success? “We believe packaging does make a difference, but at the end of the day it’s about what’s in the bottle that matters,” says CEO Tim Clarke. “Some packaging comes across as accessible, some are more elitist. We took a lot of time deciding on our packaging and researched perceptions nationwide before our launch.”

Adam Seger of Nacional 27 suggests that packaging is a huge selection factor. “By their very nature vodkas are clean and hover close to neutral, thus image and packaging is often the principal distinction between brands.”

Loren Dunsworth heartily agrees. “I see it on nightly basis. People are attracted to intriguing bottles on the back bar. Packaging gets brands noticed. A superior vodka in a plain bottle will face significant challenges in this market.”

Marketing America’s Spirit of Choice
The rapid growth in ultra-premium vodkas has presented beverage operators with something of a marketing challenge. Vodka drinkers tend to have entrenched loyalties, convinced that their favorite brand of vodka is the purest and therefore the best. Enticing guests to sample other brands is often like getting them to switch political parties. You have to pique their curiosity. If not you may wind up with a shelf full of great vodkas collecting dust.

“By far the most effective approach to marketing vodka I’ve found is server education,” says Greg Den Herder, managing partner of 33 Restaurant and Lounge in Boston. “A few well chosen words from a bartender or server is often all it takes to entice our guests to try a new vodka. Considering how many vodkas we stock and the relatively slight differences between them, professional recommendations often make a huge difference in driving sales.”

Education is an essential step in debunking the often-held misconception that all vodkas are created equal. Impress upon servers the fine and subtle differences between the brands and what makes them worth their enhanced price. Conduct tastings so servers can distinguish for themselves which vodkas have discernible taste from those that are neutral. This will enable them to make appropriate recommendations to the clientele.

When approaching guests about a specific vodka, servers should concentrate on stressing four important characteristics. First and foremost is the nature of the water used in production. Water is the unsung hero of vodka’s surging popularity and arguably the most significant variable. Today’s generation of super-premium vodkas feature spring waters, artesian waters, peat-filtered water and water harvested from glaciers. It’s a major point of differentiation between the brands.

Secondly, they need to concentrate on what the vodka is distilled from, such as wheat, potatoes, corn, rye, or barley malt. Each commodity will produce a distinctively different spirit. Next, mention how the vodka is distilled. Most are made in continuous stills, but a growing number of brands are crafted in small batch alembic stills. Finally, super-premium vodkas are distinctive representatives of their homelands, and as such, deserve to have their origins highlighted.

Even the best selling category of spirits in the country can use a boost now and again.


 Twenty Hot New Vodkas
A seemingly endless stream of new vodkas is crossing our borders. Every month, dozens of labels enjoy their first taste of life in the United States. We’ve culled through the huddled masses and selected the finest of these new arrivals. As it turns out, the twenty that we’ve chosen are exemplary spirits worthy of work visas on your top-shelf.

  • Blue Ice — A light, flavorful spirit made in Idaho from Russet Burbank potatoes and Rocky Mountain spring water.

  • Boru — Crafted in Ireland, Boru is quadruple-distilled in small batches from grain and spring water, and then filtered through ten feet of Atlantic oak charcoal.

  • Cîroc — This top-shelf entry is made from grapes cultivated in the South of France. The grapes are left on the vines until the first frost and distilled five times in small, alembic stills.

  • Domaine Charbay — Handmade in Napa Valley, Domaine Charbay Vodkas are alembic distilled entirely from American Midwest grain. In addition to Charbay Dry/Clear Vodka, the distillery makes a range of super-premium flavors.

  • Hangar One — Produced in conjunction with Germain-Robin, Hangar One Vodka is a small batch, pot distilled grain vodka. Hangar One flavors are equally tantalizing.

  • Heavy Water — A Swedish vodka distilled from hearty winter wheat and spring water drawn from a subterranean lake.

  • Iceberg — Imported from Newfoundland, Iceberg Vodka is distilled using sweet corn grown in Ontario and water harvested from 12,000-year old Arctic icebergs.

  • Jean-Marc XO — This French newcomer is distilled nine times in an alembic still from four different varieties of wheat and limestone-filtered spring water.

  • Jewel of Russia Ultra — An ultra-luxury Russian vodka made in small batches from a blend of premium rye, winter wheat and artesian spring water.

  • Level by Absolut — A super-premium, 100% wheat vodka from Sweden made by continuous and small batch distillation. Blending the two types of spirits creates a light vodka with texture and a complex flavor.

  • Liquid Ice — Made in Idaho, Liquid Ice Vodka is quadruple-distilled from Rocky Mountain spring water and a blend of organic wheat, oats, barley, corn and rye.

  • Magadanskaya — Made in Magadan, Siberia, Magadanskaya is a continuous-distilled vodka made from grain, potatoes and pure mineral water from the Tal’skaya springs.

  • Shakers — This sleek spirit from Minnesota is the first ultra-premium American vodka. Shakers is made from wheat and spring water and distilled in a six-column continuous still.

  • Stolichnaya Elit — This ultra-luxury brand is crafted using small batch distillation from glacier water and winter wheat. Its twist is an innovation called “freeze filtration.”

  • Ultimat — Made in Bielsko-Biala, Poland, Ultimat is crafted from separately distilled ingredients, an innovative blend of potato, wheat and rye.

  • Wyborowa Single Estate — A Polish, 100% rye vodka made entirely on the Wyborowa estate. The distillers not only grow the grain, they also distill using spring water found on their estate.

  • Xellent — The first Swiss vodka to cross our shores, Xellent is a small batch vodka made from high-altitude rye and glacier water.

  • Zubrowka — A traditional Polish vodka triple-distilled from potatoes and flavored with indigenous bison grass.

  • Zyr —Russian born Zyr Vodka is distilled five times from premium rye, winter wheat and spring water drawn from 460 feet below the ground.

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