The flavoured vodka category has been a growth engine of the spirits sector for some time, but new research from just-drinks suggests that the sub-category no longer represents the easy route to growth or the obvious 'go to' option for new product development that it did a few years ago.

The overall vodka category has remained flat over recent years with the flavoured sector providing the growth but, as just-drinks' "on-trend: vodka flavours review" points out, the growth in the flavours sector has been slowing down. "Flavoured has shown annual decent growth but this has consistently been declining year-on-year over the last three years," the report states.

"This would suggest flavour fatigue is becoming more pronounced, but overall, the size of the flavours market remains small."

The traditional vodka category rose slightly in 2010, contracted in 2011 and increased by 0.04% in 2012 to reach 470.7m nine-litre cases, according to IWSR figures. The flavoured sector, by contrast, rose by 5.56% in 2012 to 23.3m cases. However, this was lower than the growth achieved in 2011 (7.84%) and in 2010 (9.00%).

The fact that there is still growth to be had in flavoured vodkas and that the sector still only represents a fraction of the total vodka market is spurring suppliers to continue producing new flavoured variants. 

However, even though the growth rate is slowing, the number of new flavoured product launches per year has increased. According to the just-drinks Launchpad database, in 2011 some 21 new flavoured variants hit the market, in 2012 there were 44 new flavour launches, while 2013 saw some 50 launches. This could be attributed to manufacturers looking to eke out whatever growth there might be with more and more new offerings.

Another interpretation of this data is that manufacturers are simply reacting behind the growth curve, and some are coming a little late to the party.

However, it is clearly noticeable that, as growth becomes a little harder to come by, the flavour choices are becoming increasingly outlandish or esoteric. Among the flavours to hit the market in recent months are a Wild Honey vodka from Diageo's Smirnoff brand and the addition of Vanilla Bean and Georgia Peach flavours to Campari's Skyy Infusions range. Arguably the most bizarre introduction was the addition last October of a brandy-flavoured variant to Serge Imports' Exclusiv vodka range.

Serge Imports claims that its Exclusiv XO Napoleon Vodka, which is produced for the company in Moldova, is the world's first brandy-flavoured vodka, and few would doubt it. That the drinks sector already seemed to have a perfectly adequate spirit with a Napoleon brand flavour to it, namely Napoleon brandy, does not seem to have deterred the company. Indeed, the Serge Imports ten-product range already includes a Moscato wine version.

That the most novel offerings are being seen in the US is perhaps not a surprise. The US accounts for around 50% of the global flavoured vodka market and has led the way in the establishment of the sector. However, as a larger, more mature market for flavoured vodkas, the slowdown in growth in the US has been more pronounced. The US flavoured sector grew by 27.05% in 2011 to 13.84m cases, but growth declined to 17.87% in 2012. It should also be noted that even though the growth rate for flavoured vodkas fell in 2012, the overall vodka sector in the US still managed 6.03% growth.

In November 2013, market tracking firm Restaurant Services reported that sales of flavoured vodka in the US on-premise sector had fallen by 12% during the previous 12 months, in spite of continued new entries to the category. Restaurant Sciences said the flavoured vodka category lost around 1% of its on-trade spirits market share during the 12-month period, with other flavoured spirits, such as whisk(e)y, taking share.

The just-drinks Launchpad data also shows the number of new product launches increasing in the US. Some 17 were added in 2011, while 36 new flavoured variants hit the market in 2012. In 2013, 46 new flavoured vodkas were launched in the US.

The just-drinks review notes that most of the major international spirits producers are backing the flavoured sector to continue producing growth.

"Of the brand owners, Beam Inc, Diageo and Pernod Ricard were the most prolific regarding flavour variant launches in 2013," the report states. "Both Beam and Diageo continued to grow their flavours portfolios across 2012 and 2013. Only Pernod Ricard looks to be scaling back its flavours launches, in line with the fatigue trend."

The report also details the breakdown of the flavoured market across different flavour groups, namely Other fruit; Other; Dessert/candy; Apple/berry fruit; and Citrus fruit.

Other fruit, which includes cherry, coconut, peach and grape flavours, is the largest variant family and is still showing most activity, with 15 new product launches in 2013, compared with ten in 2012 and three in 2011.

The 'Other' flavour subsector, which includes variants such as chilli, cucumber and honey, saw ten new product launches in 2011 and 14 in 2013. Meanwhile, the dessert- and candy-based category has shown a consistent level of new product activity, with eight new introductions in 2011, eight in 2012, and nine new launches in 2013.

However, the just-drinks review notes that there were fewer apple, berry and citrus fruit flavour launches in 2013 than there had been in 2012.

Expert analysis

just-drinks on-trend: vodka flavours review

just-drinks on-trend: vodka flavours review

In the first of a new “on-trend” series, just-drinks dives a little deeper than usual into this trend-in-flux. In this mini-report, we look at recent vodka flavour consumption volume, focusing on the ...read more