With growth in FABs showing signs of a significant slowdown in 2003, industry analysts, Euromonitor, predict that the emergence of a new type of stronger vodka pre-mix may provide the spark for much needed growth over the next few years.
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Although FABs continue to show growth in most markets, manufacturers are realising that the boom is definitely nearing the end of its course, and are being forced to brace themselves for a slowdown in demand and fiercer competitive activity to maintain market share.
The world’s largest FABs markets, the US, Japan, Russia, Germany, Australia and the UK, are all expected to record weaker growth in 2003, mainly due to lower consumer interest combined with increased product overcrowding.
However, the emergence of a new type of vodka-based spirit, spearheaded by such brands as Ursus Roter, owned by Dutch company, Ursus Vodka Company NV, has taken a couple of European markets by storm. Indeed it may be heralded as the next hit product to create dynamism in the spirits market in the next few years.
Other brands marketed along similar lines include German company Berentzen’s Pusckin Red, a vodka-based drink containing blood orange juice, and Dutch company’s Hooghoudtstraat’s Royalty Red. These drinks, containing around 20% abv, are either consumed as a shot or mixed with energy drinks such as Red Bull.
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By GlobalDataVodka has already proved to be one of the market’s best performing sectors, with growth in countries such as the US and UK outstripping that of whiskey, brandy and gin in 2003. This is due largely to its versatility and stylish image, underpinned by brand support from some of the world’s largest players.
Taking advantage of this vodka trend, the very fact that the new vodka-based product falls between two stools, being neither a FAB nor a standard spirit, has been beneficial to its positioning. Take Ursus Roter which is a variant of the Ursus vodka brand but contains only 21% alcohol, half the content of standard vodka. It is mixed with a fusion of sloe berries, which gives it a distinctive sweet and fruity taste, a characteristic which has appealed strongly to the younger generation of drinkers.
Initially introduced in the Netherlands in 1998, and then in Greece in 1999, the brand was launched as a “red vodka”. This generated a certain degree of criticism from other vodka players, who claim that the product cannot be classified as vodka as it does not contain 40% alcohol.
However, it is this clever positioning as “vodka”, as opposed to just another FAB alternative, that has helped create a potentially more successful and secure market. Most notably, in aligning itself with vodka, it appeals to male consumers. This is a significant consumer segment which FABs have continually failed to impress due to their feminine image and sweet taste.
Moreover, these products can be mixed with a variety of soft drinks, as well as being consumed neat, which also allows for a more adult male-orientated positioning.
The successful development of these products will no doubt spark the interest of large-scale companies. Just as global companies like Bacardi and Diageo were inspired by the success of FAB innovators like the Two Dogs brand, they may once again seek to capitalise from this potential boom by putting their own product onto the scene.
However, having seen the FABs boom reach maturity far sooner than they had hoped, larger players may be hesitant to cash in on the success of these vodka-based brands. As these young and fickle consumers, similar to the FABs consumer base, tend to require substantial marketing investment to both capture and maintain their interest, it is perhaps more likely that multinationals will leave this one to the niche companies.
Indeed, given the appeal of these products to groups such as students, it is the very lack of overt investment but rather word-of-mouth recommendation and the niche, rather than mainstream, positioning of the brand which has been the path to success thus far.
