Vodka Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Vodka Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The vodka market is projected to register a CAGR of 3.90% during the forecast period, 2022-2027.

Government regulation regarding trade and mobility during the COVID-19 pandemic has significantly altered the places and patterns of vodka consumption across the worldwide market. As consumers were avoiding on-premise venues as a preventive measure, businesses witnessed a strong demand across off-premise channels such as convenience stores and liquor shops. For instance, Constellations Brands saw a 10% increase in sales volume of their vodka in the US off-premise channel in February 2020. One of the driving forces behind the market's ability to survive the epidemic has been domestic consumption, together with brand stocking.

The market is most likely to be pushed in the medium term by the rising global young adult population, high disposable income, and consumer desire for premium/super-premium alcoholic beverages.

The recent trend impacting the largest vodka market i.e. North America includes the Russia-Ukraine war. Even though not much vodka made in Russia is exported to overseas markets, the governors of North American states banned the sale of Russian vodka as a symbolic move to boycott Russia against its invasion of Ukraine. For instance, in February 2022, the governors of Utah, New Hampshire, and Ohio ordered state-owned liquor shops to discontinue the sales of Russian-made and branded vodkas.

Key Market TrendsRise in Popularity of Premium Vodka

Consumers around the world have more discerning tastes now than they had five years ago. They have a constant need to try out novel and premium alcoholic drinks, which often feature a mix of quality ingredients and personalized botanical infusions to produce a pleasing taste. Additionally, premium vodkas are subjected to multiple distilling stages to improve their functionality as well as overall appeal which set them apart from the conventional varieties. Further, the rise in health consciousness is promoting the consumption of healthier alcoholic beverages characterized by the blend of natural ingredients, low-calories, and sugar-free formulation. Therefore, the premium vodka range has greater prospects, especially in the international market owing to the growing consumer interest in a sustainable and healthy lifestyle.

Moreover, premium vodka brands are introducing new products in the RTD (Ready-to-drink) beverage category as the segment is witnessing a significant surge in consumer demand across the global market. For instance, high-end vodka brands are introducing canned products with a focus on spritz serves. In September 2020, Ketel One released its first line of canned Botanical Vodka Spritzes. Spritz itself has evolved during the past few years. It used to refer to a mixture of soda or sparkling water with wine or vodka, but more contemporary brands like Aperol have embraced it for its well-known soda water, prosecco, and bitter aperitif serve. Due to its recent success, other companies and even bars have started using the term for their wine, water, and alcohol pours.

RTD vodka innovation is accelerating in the developing countries as customers continue to call for flavorful, light drinks like hard seltzers, which in turn is expected to drive the growth in the vodka market during the forecast period.

North America is the Largest Market

The increasing popularity of flavored vodkas such as Texas Grapefruit, Blood Orange, Bartlett Pear, and Sun-Ripened Watermelon is driving sales in the United States. Further, the growing popularity of tart cherry and limeade vodka flavors combined with sweet citrus flavors in Canada will support the sector's expansion. Alcoholic drinks including Pyat Ozar, Svedka, and Hlibny Dar are also expected to aid in the market's expansion. Additionally, the Canadian government's assistance in enhancing the premium white spirits' distribution system is anticipated to spur market expansion. Marie-Claude Bibeau, Minister of Agriculture and Agri-Food, announced in 2019-2020 that Canada's vodka compositional standard has been modified to encourage greater innovation, increase consumer choice, and promote trade in the nation's expanding spirits sector.

Potatoes and cereal grains are no longer the only agricultural products that Canadian distillers can utilize to make vodka. By allowing the use of novel ingredients like honey, apples, or dairy in the manufacturing of vodka, Canada will be better able to compete internationally and provide customers with additional options.

Competitive Landscape

The global Vodka market is highly fragmented owing to the presence of multiple regional and multinational companies offering a wide range of vodka variants with innovative flavors and trying to maintain their leadership position in the market studied.

Some of the major players in the market include Diageo Plc, Brown Forman, LVMH Moët Hennessy Louis Vuitton, Pernod Ricard, and Constellation Brands Inc., among others embarking on business strategies including product innovations, partnerships, expansion of online and offline distribution networks to enhance brand visibility and portfolio of offerings, thus, augmenting the growth of the market. For instance, In July 2020, Bacardi lined up the release of a three-strong range of low-alcohol vodkas in the United States.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

Please note: This publisher does offer titles that are created upon receipt of order. If you are purchasing a PDF Email Delivery option above, the report will take approximately 2 business days to prepare and deliver.