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The Vodka Vogue

The nation's thirst for premium liquor in cool cocktails is making vodka the clear leader in the spirits market
Jack Bettridge
From the Print Edition:
Camilo Villegas, July/August 2006

Define vodka.

It's a tasteless, odorless spirit? That would be true except that now it comes in an array of flavors. It's the spirit that leaves you breathless after a three-Martini lunch or a breakfast with Bloody Marys and Screwdrivers? Not quite. Today, vodka is poured into a myriad of cocktails that are served any time of day.

The drink of the Russians? Yes, but vodka also comes from Finland, Sweden, France, Germany, the Netherlands, England, Ireland and even New Zealand, and most of what the United States drinks is made here.

A distillate made from potatoes—no, make that grains? Again, not quite; some of today's hottest brands are made from grapes.

So what is vodka? It's the leading category in the spirits market, the drink that's driving the cocktail culture and redefining levels of luxury and fashion at the bar.

No matter how you describe it, vodka easily outperforms any other hard liquor. At an estimated 48 million cases, its U.S. sales were more than double the closest contender—rum—in 2005. Moreover, growth has been constant since 1995 and Impact International (a beverage alcohol trade publication owned by Cigar Aficionado's parent company, M. Shanken Communications, Inc.) estimates that sales will reach 60 million cases by 2010. Much of that growth is coming at superpremium levels and higher, in packaging meant to rival the liquid in the bottle.

Perhaps the most telling figure is the $2 billion that Bacardi forked over to Sidney Franks Importing to buy the ultra-premium Grey Goose brand in 2004. It is among hottest brands in the spirits world, but still the pricey purchase was a high compliment to pay a French vodka that had been on the U.S. market for only seven years. Vice president group director Monsell Darville considers the price entirely justified. "It is one of the greatest investments a spirits company has made in the history of acquisitions," he insists. "Few brands if any react like this. Grey Goose has no psychological, geographic or demographic limits."

The industry's confidence in top of the market as category leader is borne out by Russian Standard's decision last September to barge into the U.S. market with its ultra-premium Imperia, instead of testing the waters with one of two lesser-quality brands. Jose Aragon, head of U.S. operations for Russian Standard says, "You have to establish a value proposition at the high end first."

It wasn't always like that. Obscure are the origins of vodka, amorphous are its guidelines and inauspicious was its introduction to America.

It is thought that around the twelfth century, people from the region that encompassed what is now western Russia, Poland, Latvia, Estonia and Lithuania used crude distillation to turn their excess grains into spirit. While different countries may lay claim to its origin, it is its Russian name—vodka, or "dear little water"—that stuck.

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