Vodka Trends in 2024
Unlike tequila, bourbon, or gin, vodka hasn't been generating much buzz lately. However, it remains a staple in bars and restaurants, thanks to its strong sales and favorable profit margins, making it a consistent seller for retailers.
Despite the rise of ready-to-drink (RTD) beverages, vodka still holds a significant portion of the alcohol beverage sector. According to Zachary Poelma, senior vice president of strategy & insights for Southern Glazer’s Wine & Spirits, vodka accounts for about 25% of the total spirits category volume and is expected to maintain this share as its growth aligns with the overall spirits market, excluding RTDs.
In 2023, vodka category volume fell by about 4% in terms of depletions from industry wholesalers. However, retail data from Nielsen indicated a smaller decline of approximately 1.5%. Retailer inventory destocking played a role in these trends, with consumer demand outpacing distributor sales. The premium price tier, which constitutes almost half of the vodka category, led the growth in 2023.
Innovation with Ingredients
Most vodka is traditionally made from fermented grains like corn, wheat, or rye, but innovation is driving the use of new and unique bases. For example, Hali’imaile Distilling Co. produces Pau Maui vodka from Maui Gold pineapple, and British vodka Pod is made from peas, imparting sweet vegetal notes. Fierce & Kind uses corn, giving its vodka botanical notes, while Zakuska vodka remains unfiltered to retain flavors from its red winter wheat and corn mash.
Vodka Cocktails
Vodka remains popular in cocktail menus, with classics like Vodka and Soda, Dirty Shirley, and Cosmopolitan leading the way. The Espresso Martini has surged in popularity, with 25% of people reporting they enjoy it, a significant increase from 2022. Félix in Charleston, SC, and Silver Lining Lounge in New York serve unique variations of this drink, contributing to its enduring appeal.
Other vodka-based cocktails like the Pornstar Martini and its variations, along with savory options like the Bloody Mary and Dirty Martini, continue to attract consumers. Creative concoctions such as the Caprese Martini and The Herbalist showcase the versatility of vodka in mixology.
Premiumization vs. Price Sensitivity
The vodka category is likely to see modest premiumization, driven by consumers trading up from value to premium tiers. However, price sensitivity remains a factor, influencing future innovations. Mat Dinsmore from Wilbur’s Total Beverage notes a trend of consumers opting for cheaper vodka options, with Tito’s being the only top brand showing significant growth.
The Future of Vodka
Looking ahead, there is optimism for increased vodka consumption and a spotlight on smaller, boutique brands that offer creative and unique products. Industry experts like Arthur Revechki and Basem Harb foresee a resurgence of vodka, both at home and in restaurants, over the next few years. Justin Stiefel of Heritage Distilling Co. highlights the importance of vodka brands connecting with consumers on a deeper level, aligning quality, price, value, and mission to resonate with the next generation of vodka enthusiasts.