Research indicates high-end vodka may vault to even higher price points

Nation's Restaurant News,  March 24, 2008  

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The next step for the vodka segment could be into the high end of the price stratosphere. According to the research group Just-drinks.com, ultrapremuim brands, as opposed to superpremium and premium brands, could be the next hot property, representing where vodka is headed over the course of the next several years.

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Just-drinks defines premium vodkas as those with retail prices more than $12 a bottle and superpremiums at more than $19.95 a bottle, while ultrapremiums are $40-$50 a bottle and higher. In its Global Market Review of Vodka, Just-drinks says vodka could be following the lead of tequila into the ultrapremium segment. The report cites sales trends, interviews with spirits company managers and recent movements in corporate brand purchases.

A significant trend driving current ultrapremium sales, says one spirits executive, is the growth of bottle service in night clubs, where entry to a VIP area is gained through the purchase of an entire bottle of spirits. Getting into these kinds of "right places," the executive states, is pivotal to ultrapremium-brand growth.

The report indicates that although the United States already accounts for 61 percent of the global premium-and-above vodka sales there is still plenty of room left for development of all three higher-end segments.

Another brand executive observed there is still to be carved out even in the ultrapremium segment: "We are not talking about hundreds of thousands of cases," the executive says, "but the potential is there."

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