Vodka - Slow yet Steady

According to IWSR Drinks Market Analysis, the overall beverage alcohol market in the United States rose 2.3 percent in the first half of 2021 compared to the first half of 2020. Spirits performed even better, increasing by 3.8 percent, according to Brandy Rand, COO of the Americas at the IWSR.

The vodka category grew through 2021, but it did not outperform the total alcohol category. According to IWSR data, vodka sales increased by 1.7 percent in the first half of 2021 compared to the first half of 2020, owing mostly to high-volume formats from off-premise merchants.

In 2019, vodka grabbed a 30 percent part of the liquor category's sales, while it will have a 23.5 percent stake in 2020.

These apparently slow figures may indicate that vodka already accounts for a sizable part of total liquor sales. "You can't expect vodka to expand at the same rate as categories far smaller than vodka," explains Daniella Vizzari, Crystal Head Vodka's associate marketing manager.

Some of the current slowing growth in vodka may be due to the premiumization trend that has taken root in other categories. According to the IWSR, premium wine and spirits sales are predicted to climb 25.6 percent in volume from 2020 to 2025, while non-premium wine and spirits sales are expected to grow 0.8 percent.

However, unlike many other categories, vodka has not suffered premiumization. Since 2017, the average unit price for vodka on Drizly has been between $21 and $23, and it is now at $21.60.

Then there's the emergence of other categories, such as ready-to-drink (RTD) cocktails, hard seltzer, and tequila, which are eating into vodka's total market share. These categories are likely eroding vodka's market share, particularly within the liquor category.