V2O

Graham Holter of Wine and Spirit Magazine (it's the UK one, not the US one with an "s") asks, "What's the difference between vodka and water?"

What's the difference between luxury vodka and premium mineral water? One is a flavourless, colourless liquid that relies on clever marketing to sustain an inflated price point, and the other is - oh. Right.

Really it's a story about the similarities in marketing between the two, with some funny notes at the end.

Vodka is the new wine

I've been having a great time reading Lawrence Osbourne's The Accidental Connoisseur, a book about the wine world. It's been stimulating some thoughts in my small brain on spirits industry innovation and marketing based on what happened in the wine world. Around page 84, he's talking with winemaker Bill Cadman, who says:

"The sick thing is," he said, "that people want to spend more money. It makes them feel reassured."

The point he was making is that the price is the best indicator of quality to most people. (Heck, I still buy wine on price, lacking any real knowledge of it, but you know, the cheap price.) Thus, if you want your brand to stand as the highest-quality product in a crowded market, you need to charge the most. "Well, duh!" I said to myself on the elliptical trainer at the gym where I do all of my best reading. It was more of a "Duh me" than a "No duh." Absolut vodka set a high price point early on and was the standard of high-quality vodka until other brands caught up on price. Then Grey Goose took the next big leap in price and that's how people "knew" it was the best. And now we have a slew of vodkas priced at over 60 bucks for 750 ml, so those are now the best. I have in the recent past blamed the marketing departments for inflated vodka and other spirits prices, and would now like to issue a partial apology. It's consumers' fault too for needing to be told what is best. And it's also the many spirit tasting competitions' fault for telling us a new batch of spirits are the best each year, making the terms "best tasting" and "award-winning" nearly useless. Anyway, just some thoughts.

Oi Vodka

I read an industry report on Just-Drinks.com (registration required) describing what we know: that the super- and ultra-premium categories of vodka are the fastest growing. It also predicts that the vodka industry will follow trends in the tequila industry on how to market even more expensive products. The problem with this trend and prediction is that it doesn't address what's actually inside the bottle. With tequila there is at least the perceived notion that the raw ingredients are expensive and aging further ups the price. With vodka, consumers have been hearing for years that every brand is the most pure, distilled the most times, and tastes the best. It's become meaningless, so now marketers are turning to expensive designer bottles and rap star endorsements, furthering the distance between what's inside and outside the bottle. Vodka brand development is about setting a price point, then creating a marketing package to justify it. This isn't new- Grey Goose was designed to be made in France just because France sounded better- but now the once-expensive premium brands like Absolut and Stoli are developing their own ultra-premium offshoots just to be competitively priced with newer more expensive brands. And it's not like the vodka is getting much better. What I am starting to find interesting is the backlash: Because all marketing is focussed onward and upward without changing what's inward, there is now room for clever brands to sneak into the cracks with different approaches. Already, the Sobieski brand is counter-marketing with their "Truth in Vodka" campaign advertising that $12 vodka is just as good as as $30 brands. I would guess that additional backlash campaigns will advertise vodkas that have "flavor, not just style" (you can pay me for that later), as well as focusing more on ingredients. I think the brand Karlsson's is smart for advertising seven kinds of "virgin" potatoes, though I haven't tried the product yet. It's strange that vodka is such a huge seller and incredibly popular, but most everybody spends more time discussing the marketing of the product rather than the product itself.