Malcom Gladwell’s best-seller “Tipping Point” posits, as his sub-title suggests, “How little things can make a big difference.” Well, something similar may be happening in the vodka and Bourbon categories – it involves chocolate cupcakes and black cherries. A recent stock report suggests American whiskey marketers are wooing flavor-obsessed vodka consumers as never before.
That’s the “tippling point” thesis of two stock analysts from Citibank about the possible – and in their view positive – growth prospects of Brown-Forman stock. (Editor’s Note: Neither Beverage Media, nor the author endorse or take a position on any drinks industry stock or its prospects.) What’s their argument? Despite growing numbers of exotic vodka launches inspired by chocolate cake and toasted marshmallows, Citibank analysts Vivien Azer and Geoffrey Small contend flavor-fatigue is setting in with vodka consumers. In an audacious scenario, the Citi analysts argue that Bourbon brands, and especially flavored Bourbons, of all things, are the beneficiaries, as their sales were extremely robust in 2011.
But before anyone gets carried away with this “Bourbon smacking down Vodka” argument, according to Adam Rogers, Beverage Researcher at Beverage Information Group (BIG), U.S. sales of vodka in 2011 increased at a faster percentage rate than American straight whiskey (which includes Bourbon, but excludes blended whiskey): +7.1% versus +2.7%. On a volume basis, vodka’s increase was 10 times larger than straight whiskey’s: a 4.5 million-case gain to a record 66.5 million nine liter cases versus a 400,000 case increase to 15.7 million cases.
Bottom line: Vodka, domestic and imported, still rules. However, there’s no denying Bourbon and flavored whiskey sales are surging.
Rob Mason, Director U.S. Bourbons, Beam Global, says, “We see innovation as a strong driver of bourbon category growth. As the world’s largest bourbon producer, Beam is leading the charge in innovation, blazing trails with revolutionary offerings such as Red stag, Devil’s Cut, Maker’s 46, and Knob Creek Single Barrel Reserve. We have also seen our iconic brands grow – Jim Beam continues gaining market share as the world’s leading Bourbon; Knob Creek remains the world’s leading super-premium Bourbon; and Maker’s Mark is continuing to blaze trails. We are “bullish” on….2012.”
Noting a shift in consumer bar calls, Jeff Boyle, a beverage consultant to momofuku ssäm, a trendy bar in Manhattan’s Lower East Side, observes, “Probably the most major contribution to the increase in whiskey and bourbon sales is the resurgence of the craft cocktail.”
Curtis Hancock, Mixologist at Panzur, a Spanish restaurant and bar in Tivoli, New York, agrees: “Many of our regulars who were at one time ordering drinks like kangaroos (the correct name of the so called “vodka martini,” originally showing up in cocktail books in the early 1950’s, a time when vodkas relative newness to the states had bartenders who were unfamiliar with the spirit using it in the stead of gin) or cosmopolitans, are now happily sitting down at the bar and ordering sazeracs, aviations, and even martinis made with the traditional 2:1 gin:vermouth ratio.”
Jim Shpall, President and CEO, Applejack Wine & Spirits, which is Colorado’s leading retailer based in Wheatridge, says, “I have never really seem vodka flavors take off as a sub-category….it’s more a matter of suppliers getting more facings.” He adds, “The rapid growth in artisanal bourbons is a natural extension of our consumers’ interest in craft beers; Colorado is a forefront of these craft brewing and micro-distilling trends, with Breckenridge Bourbon, Stranahan’s Colorado Whiskey.”
Beam Global’s Mason also notes that “Women are becoming more interested in whiskey – in fact, 45% of Red Stag consumers are female. Flavored whiskies, such as Red Stag, are having huge appeal and bringing in new consumers who previously only drank white spirits.”
Maxime Kouchnir, Vice President, Marketing — Vodkas, Pernod Ricard USA, Absolut’s marketer, says, “Consumer demand for new flavors remains strong….Our leadership in flavors dates back to 1986, when the brand released its first flavored vodka – Absolut Peppar – to capitalize on the growing Bloody Mary cocktail trend. Our next flavor – Absolut Citron – became a main ingredient in the Cosmopolitan.”Noting the latest Absolut flavor iterations, Kouchnir adds, “Our newest flavor, Absolut Grapevine, was introduced this month. We’ve also translated our flavor innovation into our limited-edition “City” series – starting with Absolut New Orleans back in 2007. That flavor was a mango/black pepper blend. Since then, we’ve released flavor blends for Absolut Los Angeles, Absolut Boston, Absolut Brooklyn, Absolut SF and now Absolut Miami. Flavored vodkas and line extensions represent roughly 25% of our business, and we will continue to introduce more leading-edge flavors and line extensions in 2012.
Where will it end? To paraphrase the classic cliché, one could predict that American cocktail enthusiasts will have their “cake” (as in a Cupcake vodka) and eat it too, with a black cherry on top (as Red Stag Black Cherry). Cupcakes and black cherries, then, could turn out to be one of the most flavorful “tippling points” in U.S. drinks history.
Contributing Editor David Lincoln Ross enjoys his signature Mapleleaf cocktail, a New England-inspired variation on the Whiskey Sour, which substitutes Grade B Maple Syrup for Simple Syrup. Enjoy! Visit www.davidlincolnross.com
A version of this article appears in the April 2012 issue of Beverage Media – http://bit.ly/HiSZ4S