Vodka is an alcoholic beverage, which is made through distillation process. The raw material used for preparation of vodka include starches or sugar plants, such as wheat and vegetables such as potatoes. Vodka is a clear beverage with indistinguishable taste, which was originated in Russia and Poland and got its name from the Russian word ‘voda’ (water). Vodka is commonly used in cocktails as it’s colourless and has a clean taste which pairs well with any flavour. The market is expected to witness significant growth, owing to the increase in varieties of Vodka available out for consumers. Today, consumers prefer low-calorie products and superior ingredients due to the rise in health consciousness especially in the younger generation. Therefore, food & beverage industry is facing a challenge to continuously align itself to consumer preferences.

Market Outlook

Global vodka market is driven by the rising interest in cocktails culture among millennial consumers. Companies are now experimenting with innovative flavours for vodka cocktails which is drawing consumers towards exploring more expensive alcoholic beverages. Key players are launching new products to align with these rapid changes in consumer preferences. For instance, in 2019 Pernod Ricard launched, a Caviar-infused vodka called L’Orbe. Moreover, Hilton Head Distillery also launched ‘Aermoor’, a vodka that tastes like birthday cake.
In 2018, Asia-Pacific accounted for the largest growth, in terms of the revenue, owing to rising population, rapid urbanization, and rising per capita income in the region. According to the World Bank, India’s per capita income increased by 10% in 2019. Moreover, restaurants and bars in the region have benefited from the rising alcohol consumption and demand for premium vodka. For instance, in 2019 Pernod Ricard, a France-based company that produces alcoholic beverages had 12%rise in alcohol sales in Asia Pacific, owing to success of its vodka brand ‘Absolut’ and expansion of local whiskey brand ‘Seagram’ in the region. Especially in China and India their alcohol sales observed 20% rise in 2019.
Among Europe, Russia leads in per capita vodka consumption in the world. However, Russia is currently facing a drop in alcohol consumption. For instance, according to WHO, alcohol consumption in Russia has gone down by 43% from 2003 to 2016, owing to growing trend towards healthier living and government enforcement on minimum pricing. For instance, in 2011, Russia government restricted the availability of retail alcohol and instituted strict regulationsabout media advertising of alcohol.
Key players in this market are focusing on launching new products, owing to rising trend of Ready-to-drink vodka cocktails. For instance, in 2016, Diageo launched, canned premix cocktail versions of its vodka brand, Smirnoff & Cola. Moreover, Bacardi Limited also restored its existing brand Breezer in 2019 with Ready-To-Drink vodka mixes. Ready-To-Drink cocktails are specifically packed in brightly-patterned decorated cans and bottles which makes them more attractive and shareable on social media platforms. The major challenge for key players is to maintain taste, quality ingredients, and authenticity.
Among distribution channel, specialty stores segment held a dominant position in the global vodka market in 2018. Whereas, online stores are expected to have fastest growth attributing to rising internet penetration rate and consumers using e-commerce to buy groceries and other items. For instance, according to the International Telecommunications Union, internet usage has increased around 4% in 2019. Alcohol e-commerce leader Drizly experienced a high growth in online alcohol delivery revenue in 2018. Furthermore, according to the IMF’s report, global retail e-commerce sales reached around US$2.3 trillion in 2017. For instance, China’s online alcohol market is on rapid growth, owing to the rising demand of local wines among Chinese population.

Key Players

Key players operating in the global vodka market include Belvedere, Brown-Forman, Diageo, Gruppo Campari, Pernod Ricard, Russian Standard, Bacardi, Central European Distribution, Constellation Spirits, Tito’s Handmade, Grand Teton, and Deep Eddy.

Market Taxonomy

On the basis of flavor type, the global vodka market is segmented into: