While vodka has been America’s spirit of choice for three decades, its rise
to the top shelf on America’s back bars in the last few years has been nothing
short of meteoric. This success has been made all the more impressive by the
fact that spirit makers over the past 30 years have faced an overall decline in
consumption of alcohol in the United States. Still, what Americans do drink is
of much greater quality than heretofore, which explains why entrepreneurs have
become so enamored of vodka, while every other spirit category has seen its
fortunes diminish or flatten. For those whom the spirit has moved, premium vodka
has proven a winning investment opportunity year after year.
| Vodka’s transformation from “odorless, colorless, flavorless” to
“vanilla-creamy finish” is nothing short of a Cinderella story. |
In part, this
trend has been social. Consider the martini. No longer confined to the classic
kiss of vermouth and any-old vodka concoction, it has fanned out in a peacock’s
tail of colors and flavors. In the current lexicon, practically anything served
in a triangular glass can be called a martini, and the vodka distillers have
accommodated this diversity with a wide range of flavors from lemon to
chocolate. Moreover, vodka’s profile within the cocktail spectrum has expanded
far beyond the martini—and so has its market share.
A Premium on Price
Only a decade ago, few producers foresaw vodka’s
potential as a luxury spirit: Absolut remained the only high-end offering on
retailer’s shelves. Then, in 1996, Edward Phillips, CEO of Millennium Import,
the sole U.S. importer of Belvedere vodka from Poland, introduced Belvedere to
the U.S. market at a price 75 percent higher than Absolut, creating an entirely
new category: the super premium vodka. The eight years since have been
tumultuous, with independent boutique producers going up against larger,
established companies, all of them attempting to differentiate themselves in a
product the Bureau of Alcohol, Tobacco, Firearms and Explosives defines as
“without distinctive character, aroma, taste or color.” And many have
succeeded.
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