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VODKA – DEBATE: Making your mark

31 January 2007 By db staff writer

How can you convince consumers to know and love your vodka? The second in our series of debates sponsored by Sputnik vodka looks at ways to achieve that elusive brand call.

In the last few years, vodka has indeed been living in interesting times, with seemingly endless launches of new premium offerings and recent clashes within the EU over the definition of the spirit. Meanwhile sales have continued to soar, fuelled by cocktails and consumers’ consistent willingness to trade up. This has all resulted in a number of issues that the category has yet to address. Sputnik vodka is tackling these issues head-on, by initiating debate in the trade, to stimulate greater understanding of vodka’s current place in the market.

In a market that is so fiercely competitive, consumer loyalty is important, and the elusive brand call can mean the difference between failure and success. Aside from direct communication with consumers, there are a number of ways to encourage this, such as branded cocktail listings. The support of bar staff is undoubtedly an advantage for a brand. These are obviously more pressing concerns for premium brands than for others. More mainstream vodkas rely on other means to ensure profitability, such as listings as pouring brands.

Is it possible, and worthwhile, to challenge major players in the vodka market? How is this best achieved, and how can it be maintained? How can profitability be ensured within the vodka market? How does this vary according to the size and positioning of a brand? Is a big marketing budget the only way to succeed as a new premium vodka brand?

There are no illusions for consultant Alex Kammerling when it comes to the challenges of launching a vodka brand. “New vodkas are certainly faced with an uphill struggle to compete with the likes of Stolichnaya, Absolut and Smirnoff, as these brands have been around for 40 or 50 years,” he said.

Stuart Ekins of Inspirit Group, which distributes Ketel One Vodka, believed “challenging vodka market leaders can
only really be attempted by other large brand companies who have a similar bullish outlook. Brands within small- and medium-sized companies can no longer compete with the huge marketing spends that the big boys have access to.” For Alex Claos, director of Jewel of Russia, the answer is to “fight the big boys only in certain markets, in those markets willing to listen and change.”

One solution could be to provide a brand that appeals to particular consumers. “As a small producer, we want to
pick a niche and make it ours,” explained Tara Benson of Blackwood Distillers. “For us it’s the most glamourous vodka and the Scottish vodka. Then consumers know why to choose your brand over another.”

As Tom Armstrong, brand manager of Xellent Vodka, pointed out, this requires brand owners to be very clear about the profile of their typical consumer. “Association with lifestyle expectations are also important,” he added.

Kammerling agreed. “A personalised approach makes consumers feel synergy with the brand and makes them feel
part of the club.” Continuing this theme, Benson added that “if a brand can make a consumer say, ‘This brand helps define me’, the job is done.”

Ekins confirmed that people need to buy into a lifestyle and feel they are part of the brand. According to Benson, if all elements such as packaging and branding “add up to something that fits the consumer’s personal zeitgeist then success is at hand for the vodka brand.”

In addition, brands need to grow with their audience. “People’s tastes change and their lifestyle constantly shifts,” said Kammerling. “If brands are unaware of who their audience is and how their lives change, they will lose loyalty.” Ekins agreed: “The brand needs to grow with the consumer and constantly evolve to incorporate changing fashion and trends.”

Claos pointed out that to achieve this consumer loyalty in the first place, you need to build brand loyalty in the trade. “The bartender is the person that talks to the consumer, not the brand manager.” Armstrong argued that, while “the support of bar staff is undoubtedly valuable, securing their support can often prove expensive”.

As for big budgets, Benson believed that Diva would have been “ludicrously expensive and time consuming” to develop within a corporate environment. “It isn’t expensive to build a coveted brand if it’s created in the right place,” she added.

According to Kammerling, “you either need a huge budget or a very creative alternative marketing strategy to succeed as a new premium vodka brand.” Ekins added that big marketing budgets in the wrong hands will have little or no effect in helping a new premium brand succeed. “However, in the right hands it certainly gives a brand a head start over its competitors.”

In addition to these factors, Kammerling pointed out that obviously “an excellent product and a well-designed bottle” were essential to a new vodka’s success. For Ekins “market knowledge, a bit of luck, and a generous brand owner” are also key elements.

Claos added that increasing consumer interest in a vodka’s origin and production provide an opportunity for smaller players. While operating at a premium level was essential for Armstrong. “Development of a brand can only be achieved if the perception of quality is perpetuated,” he said.

Benson commented on the benefits enjoyed by small drinks companies. “The big hitters don’t have the structure to deliver ideas rapidly, the ability to spot consumer trends and build on them quickly and intuitively, or the confidence to test product in the marketplace and react rapidly to feedback,” she concluded.

Sputnik Vodka is offering UK-based readers a chance to win a mixed three-bottle case of new Sputnik flavours: horseradish, basil and rose petal.

To enter, send the answer to the question below to info@thedrinksbusiness.com with “Sputnik” as the subject before 28 February.

What’s the ratio of spirit to water molecules when blending genuine Russian vodka?

     a.) 1 spirit molecule to 3 water
     b.) 3:1
     c.) 2:2
     d.) 4:3