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| Wine & Spirits |
The New Luxury
Anthony Giglio
04/01/2004
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If we happen to find ourselves seated at a bar alongside Phillips,
we might hear him describe his drink as having an “aromatic, semisweet vanilla
nose and a creamy, semisweet lingering finish.” He will, of course, not be
sipping a glass of Corton-Charlemagne, but rather an ice-cold, straight-up
splash of Belvedere vodka. It was Phillips who figured out that, while very little upside can be had investing in vodka itself, since it does not
generally appreciate, much could be made by investing in vodka as a business—a luxury business.
| “I found, to my surprise, that there are stylistic differences in vodkas: their texture on the tongue or ‘mouthfeel,’ and their heat on the
palate—either hot, rough and raw, or, at the other extreme, smooth, round and finished.” |
“At that time,” Phillips recalls, “the segmentation of
luxury spirits had continued upward in every category: small-batch bourbons,
scotches, gins and even tequilas were available in super premium or luxury
brands and were commanding significantly higher price points and increasing
consumer interest and commitment.” But vodka, he says, which accounts for one
out of every four bottles of spirits purchased in this country, did not reflect
that migration. “My belief was that the old paradigm could not only be refuted
but also shattered. The industry was more than ready for a luxury vodka.”
This proved to be true. According to the Distilled Spirits Council of the
United States (DISCUS), current statistics show that while the entire vodka
market grew by 5.1 percent in 2003, super premium brands exploded by nearly 10
percent to 10.2 million 9-liter cases sold annually. How much of that was
Belvedere? Nearly 700,000 cases, notes Phillips. These figures seem fitting,
given that this year marks the 30th anniversary of vodka’s taking the lead as
America’s spirit of choice. But vodka’s transformation from “odorless,
colorless, flavorless” to “vanilla-creamy finish” is nothing short of a
Cinderella story.
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