VODKA – PROVENANCE: Local heroes

In an increasingly congested marketplace, vodka brands are placing a new emphasis on heritage and provenance in order to stand out from the crowd. Ben Grant reports

The heady ascent of vodka continues unabated. Sales are riding a steep upward curve that shows no sign of slowing. This phenomenon is fuelled in no small part by the relentless barrage of new products being brought to market; scarcely a week passes without a sleek and stylish new brand elbowing its way onto the back bar.

With such a mass of options to choose from, it’s easy to see why the category resonates with an audience accustomed to strolling down the street with a jukebox of 10,000 songs in their back pocket. But given the fact that this brand-promiscuous group has a concentration span only marginally longer than that of the average funfair goldfish, it’s not easy to make a lasting impact.

The growth of the sector – in terms of both sales and skus – makes it massively attractive but uniquely challenging for brand owners. In a category that is, by definition, “odourless, colourless and flavourless”, establishing a point of difference is no mean feat. Purity has been the buzzword of choice for some time (on one website the drinks business was delighted to discover a brand that is, apparently, “as pure as angel tears”), but for a premium product to stand a chance in today’s market this quality is a prerequisite, not a usp.

The target audience for the premium vodka brands is increasingly cynical about marketing bluster. Having been exposed to an unrelenting diet of brand messages, it’s hard to pull the wool over the eyes of these savvy, young, city-smart professionals. They can see through the slick marketing gimmicks and crave products that they perceive as genuine – with a background story born in the real world, not a marketing agency.

Place of origin appears to be an increasingly important factor for a growing legion of brands seeking to separate themselves from the crowd. By emphasising a strong relationship with a particular country, a vodka can implicitly draw an association with the values that consumers associate with the place.

The countries producing vodkas that emphasise their geographical roots can be divided into three distinct groups. First come the nations with a rich heritage, reputed for their long-standing tradition of distilling vodka – let’s call them The Historians. The second group, The Distillers, may not have much expertise in vodka, but their reputation for creating the world’s finest spirits infers an enviable message of quality. Meanwhile, the final group, The Puritans, are nations revered for just the kind of values that vodka brands aspire to: purity and unpolluted natural beauty.

The Historians
While nobody knows for sure where the first vodka was produced, it is widely recognised that either Russia or Poland distilled the first batch, and many of the top brands from both of these markets are keen to draw on this rich heritage in their communication. In fact, so valuable are the credentials associated with Russia that the two biggest premium brands distilled in the country are now slugging it out in the courts over the right to claim Russian-ness. The dispute between Russian Standard and Stolichnaya is as well documented as it is complex. Suffice to say, the lengths that both parties are going to in this protracted dispute clearly underline the marketing value that is associated with the country.

Stolichnaya was one of the first premium vodka brands to crack the magic formula and find favour in the lucrative US market. Ian Jamieson is president of the Stolichnaya Brand Organisation (a rather convoluted title that reflects the divided nature of the brand as a result of the dispute). “Country of origin is absolutely fundamental for Stoli,” he explains. “It is the bedrock of the brand platform. Russia is widely recognised as the homeland of vodka.”

The relevance of this association is not lost on Russian Standard, the relative newcomer bankrolled by flamboyant billionaire Roustam Tariko. “Consumers around the world associate vodka with Russia,” he says, so a strong association with the country “is like being the number one pasta brand in Italy”. For a growing number of consumers – in particular the very demographic that the premium vodka segment is targeting – authenticity is becoming an increasingly important factor in brand selection. Says Jamieson: “Our research has indicated that young consumers are looking for products with heritage as an antidote to the superficiality that they see in most brands.”

While the “homeland” association is firmly lodged in most consumers’ minds, Russia has traditionally failed to produce the sort of consistency that is required to be a globally successful brand (in fact, as Jamieson points out, the only truly global brand that Russia has produced in any category is Kalashnikov). In order to address this consistency issue, Russian Standard recently opened an enormous US$60 million distillery on the outskirts of St Petersburg that is now producing its entire inventory, and last month the company shelled out US$3m for the rights to www.vodka.com. Tariko is determined to “reclaim our territory”, and he has the bucks to back up its ambitions.

When Russian Standard first hit the US market it was backed up by a high-profile ad campaign bellowing, none too subtly, “Vodka is Russian”. Stoli is set to roll out its first globally consistent campaign in the coming months and it will be based on “boldly authentic Russian heritage”. With both heavyweights playing the heritage card, provenance will become an increasingly important factor. And while it seems unlikely that Jamieson and Tariko will sit down and share a friendly drink of either brand, the stiff competition is ultimately beneficial to both.

Polish vodkas have an equal right to emphasise their country’s rich vodka-producing history, and Nordic brands too can point to a tradition that goes back many centuries. However, while heritage is a factor within the marketing message of some brands from these markets, it seems to be less of a priority than it is for the two Russian giants.

The Distillers
While nations with a heritage of vodka production can emphasise this message, there are, of course, no rules that specify where it can be made. So it was a logical decision to create a vodka in a country revered for the quality of its spirit production. This was the theory behind Grey Goose – and the stellar performance of the brand since its inception a decade ago suggests it was a seriously shrewd move.

“People often ask me ‘why a French vodka?’,” says global brand ambassador Dimitri Lezinska, “but if you think about it, it makes perfect sense. As long as we make consumers aware the brand is from France… it denotes a certain level of quality.”

While the French may be newcomers to the world of vodka, there can be no denying their place at the top table of alcohol-producing nations: from Cognac to Champagne, when the average consumer thinks drinks, you can be assured that French quality springs to mind. “It’s not what we know about vodka,” Lezinska says, “but the fact that we have a long culture of distilling and producing fine wines. France has an extraordinary heritage, gaining the expertise to create the most luxurious spirit in the world.” It was a natural step to translate this experience – and, more importantly, this reputation – to the fast-growing premium vodka segment.

But the positive country associations don’t end there. The French connection also encompasses a reputation for fine jewellery, fragrance and cosmetics, haute couture and cuisine (including, of course, French pastry produced from the same wheat that is used in Grey Goose). As the centre of the global luxury goods industry, the decision to create a vodka with “Produced in France” on the label was a stroke of genius. However, the brand has been careful to get the message across delicately rather than shouting it too aggressively – with a relatively subtle tricoleur featuring on the label. This ensures that marketing-weary consumers are able to “discover” the brand truths for themselves, rather than being force-fed information.

One of the latest new vodka launches to hit the market also emphasises its link with a homeland that is revered for producing one of the world’s finest spirits: Valt, a “single malt Scottish vodka”. It’s the brainchild of drinks industry veteran Ricky Christie, who explains: “Scotland is renowned for distilling. We produce the best whisky in the world, so if we can produce a quality vodka, people will naturally draw conclusions from that.” Indeed, with over 500 years’ experience and a well-deserved worldwide reputation for producing exceptional whiskies, Scotland must surely rank as the number two nation for the quality of its liquor production.

In an overcrowded category Christie knows that a point of difference is crucial. He has thus been careful to ensure that the associations with Scotland and whisky are consistently applied – through the name, the bottle design, marketing and even the fact that the first batch was distilled on St Andrew’s Day. With so many brands built around “flimsy” credentials, Christie is confident that the target consumers will be attracted to a brand that has a genuine story to back it up.

Interestingly, after hitting Scotland, the initial export roll-out will be to Russia and other selected Eastern European markets. The theory goes that these markets have a tremendous thirst for credible Western brands, while the US market is “so saturated with brands” that it is simply not a priority at this stage.

The Puritans

To describe the word “purity” as overused in the context of marketing vodka would be a gross understatement. You lose count of the number of brands that shout about using water of unparalleled quality or distilling and filtering the product to kingdom come. So relentless are these claims – and so frequently erroneous – that they have lost any real credibility among smart consumers.

Rather than merely claiming to be the ultimate expression of purity, a growing number of newcomers to the vodka market are inferring this trait in their product by aligning themselves with a country of origin that is renowned for such qualities.

The William Grant brand Reyka is a prime example, making much of its Icelandic provenance in the marketing message. As brand development manager Elwyn Gladstone points out, even the name of the country has a certain resonance with the cold, fresh values to which premium vodkas aspire. Consumers may know very little about Iceland, but it’s a safe bet that their perception of the country is as an unsullied natural wilderness. And while many vodkas may shout about the purity of their water source, Reyka has more reason than most. Sourced from the local Grabrok spring, Reyka water contains fewer impurities than virtually all mineral waters on the market – in fact it does not even require any treatment
prior to use.

But it’s not just Iceland’s reputation for pristine landscape that lends itself well to the brand: the country also has a cultural cachet that is a neat fit for a premium vodka. As Gladstone points out, people think of Iceland as a very “hip” destination – irrespective of whether or not they have actually been there. The capital, Reykjavik, enjoys a reputation for its lively nightlife, a factor that has obvious positive associations for the brand (not least because of the similarity in names).

New Zealand is another country that is renowned for its natural beauty, and which also enjoys a “cool” reputation – a fact that has been capitalised on by 42 Below. “Brand New Zealand and 42 Below fit incredibly well,” explains UK manager Justin Bade. “The country has a great clean, green image – it hasn’t had the chance to be ruined yet.” It is also immensely desirable for travellers, having been named as the number one global destination for the last three years by backpacker’s bible The Lonely Planet. “Awareness of New Zealand is very high and it has great meaning for consumers – either they’ve been and they loved it, or they aspire to go.”

Place of origin is therefore an absolutely critical element of the brand’s identity – so much so, in fact, that the name is a reference to New Zealand’s geographical point of latitude. This fact is pointed out on the bottle, though Bade acknowledges there is a slight lack of clarity. As a result the brand is in the process of being repackaged: the new design will see the map of the country promoted to the front of the bottle, with the latitude lines connecting to the logo. “This reinforces how important this usp is for the brand in an overcrowded category – 42 Below is New Zealand in a bottle.”

Of the Western European nations, Switzerland, with its evocative sense of fresh Alpine beauty, enjoys the best reputation for natural credentials. This status – combined with centuries of experience in kirsch and schnapps distilling – makes the country a credible source for a vodka brand. The added benefits of the Swiss connection, according to Xellent distributor Tom Armstrong, are the reliability factor as “people know what they’re getting with a Swiss product”, as well as a reputation for “quality, prestige and expensive taste”.

The strong country credentials are the raison d’être of the brand – so the challenge was to develop an identity that established this connection beyond simply scribbling “Swiss vodka” on the label. And here the team behind Xellent have been particularly cunning: the bottle itself is reminiscent of the country’s most iconic export (cuckoo clocks aside), the Swiss army knife, complete with a logo that closely resembles the famous Victorinox cross.

Finlandia is another brand that benefits from a number of positive associations with its home country (possibly the motivation behind its none-too-subtle name). As with Iceland, it’s not likely that the average international vodka drinker will have journeyed to Helsinki or beyond but, says brand manager Andrew Coles, they still “associate the country with natural purity – it’s seen as ecological, fresh, healthy living”. Elsewhere in Scandinavia, Svedka stands out as another brand that makes much of its place of origin.

The additional factor that works in Finlandia’s favour – bringing us rather neatly back to whence we began – is the rich heritage of vodka production in Finland. While it has not been around for quite as long as it has in Russia and Poland, the history of distillation still dates back to the 15th century. “There’s a growing number of consumers who want to understand more about what they’re drinking,” says Coles. “They are looking to buy into brands with heritage, not just fancy marketing and packaging.”

There are a number of factors behind the increasing interest in provenance – from surging traveller numbers and interest in far-flung destinations to a growing dissatisfaction with products and brands that are seen as artificial and meaningless. Whatever the reason, it’s clear that a growing number of consumers are yearning for products that can honestly point to having a genuine home. And in a category where it is so incredibly difficult to make a meaningful statement, aligning the brand to the values of a country that is already held in high regard is a neat trick that is reaping rich rewards for some savvy suppliers.

Home is where the heart is

When a brand sells itself based on country credentials, it appears that a strong following in the home territory is important. For the international market to take the brand seriously, “it must be popular in the home market”, says 42 Below’s Bade, who goes on to assert that Kiwis are “very proud of their vodka”. The team behind Russian Standard would certainly agree. The brand invested heavily in developing itself as the premium vodka of choice for the Moscow and St Petersburg elite prior to focusing on the international roll-out, and it seems safe to assume that the company will emphasise this popularity “at home” in future communications. Reyka was rolled out in its home market first, and Gladstone emphasises that being seen as popular among Icelanders is an important factor in driving export success. In particular, the company has focused on getting prime positioning at Reykjavik Airport to reinforce the brand credibility among departing travellers.

However, it is not of course about the home market alone. Finlandia enjoys a strong reputation in its native country, where it is seen as a highly premium product enjoyed on special occasions rather than for everyday drinking. But the biggest market for the brand – representing more than 500,000 nine-litre cases – is Poland. “Finlandia has a very good perception among Poles, and they really know their vodka,” says Coles. It is certainly a glowing endorsement for the brand.

© db February 2007