[WSJ] What's tasteless but expensive? Super-premium vodkas...

I Find Karma (adam@cs.caltech.edu)
Wed, 13 May 1998 18:46:19 -0700

I always thought vodkas had no taste to them, so sometimes I buy the
generic brand and use a funnel to pour it into an "Absolut" bottle. My
guests never know the difference. And every year during Yom Kippur I
repent for tricking them.

Rohit says that's what's REALLY tasteless about my vodkas.

By the way, does anyone know what the difference between tastes in gins
is? I've been told that Boodles martinis are the best, but I've never
tried one. Any martini drinkers in the house? I usually use Bombay
Sapphire but I've been told that's the cheap junk.

Anyhow, here's what the Wall Street Journal has to say about the new
vodkas. Feel free to play the song "Skin" (track 5 off the new Madonna
album) for mood music...

> What's Tasteless but Expensive?
> The New 'Super-Premium' Vodkas
> Staff Reporters of THE WALL STREET JOURNAL
> May 12, 1998
> Can you sell more vodka, the liquor that's generally considered
> tasteless, if you put it in a fancy bottle and charge a higher price?
> After watching rivals woo away its customers with new "super-premium"
> vodkas, spirits giant Seagram Co., which markets Absolut in the U.S., is
> about to start selling a pricey vodka dubbed Sundsvall. Named for the
> city of stone in northern Sweden, Sundsvall will be pitched as a
> higher-end vodka "to be savored by people with discerning palates,"
> according to a Seagram spokeswoman. The price: $25 to $30, compared with
> about $20 for Absolut.
> Crowded Market
> Seagram is only the latest liquor company to crowd into the high-end
> vodka market. The vodka push comes as companies struggle to find
> lucrative segments in the stagnant liquor industry, which grew only
> slightly last year after more than a decade of declining sales. As
> Americans down more upscale drinks, such as single-malt Scotch whiskys
> and single-batch bourbons, a growing number of marketers are discovering
> that vodka, one of the cheapest liquors to produce, can be a highly
> profitable niche.
> The emergence of more ultrapremium vodkas reflects the success of a
> slick marketing gambit. The idea is to reposition vodka, a simple spirit
> officially described in U.S. government regulations as "without
> distinctive character, aroma, taste or color," as a fashion icon with a
> complex taste. Seagram says Sundsvall is blended by hand in small
> numbered batches to create "unparalleled mellowness" and a "full-bodied
> character."
> High-brow packaging is also key: The Sundsvall bottle bears a dragon
> crest, the symbol of its namesake city, and is capped with a golden
> amber cork.
> Contrarian View
> Not everyone is jumping on the bandwagon. One of the best-known names in
> vodka, Diageo PLC's Smirnoff, which retails for $12 to $15, won't go
> up-market with an ultrapremium. To the contrary, it has launched an ad
> campaign that mocks the newcomers. "This vodka comes in a bottle
> designed by albino monks from Tibet," says one cartoon character to
> another. "All vodka. No pretense" is the tagline.
> The ultrapremium market has until recently been dominated by small but
> fast-growing imports such as France's Grey Goose and Poland's Belvedere
> and Chopin. Though Absolut hasn't lost market share yet, these tiny
> players have been growing fast. In its first year, for instance, Grey
> Goose sold 65,000 cases, compared with about 3.5 million cases for
> Absolut.
> In hopes of giving their vodkas the requisite upscale image, most
> companies go out of their way to design distinctive bottles. Grey Goose
> vodka features a label with snow-capped mountains and fluttering geese,
> and seductive advertising that touts the brand's origins in "the lush
> farmlands of France." Its $30 price tag is about double the price of
> many brands.
> "The bottle is the most important part of the product," argues Krzysztof
> Obloj, director of Warsaw University's International Postgraduate
> Management Center, who has studied the Polish vodka phenomenon. At
> Pravda, a tony New York vodka bar, the fancy bottles on display have
> helped Belvedere become a "top-seller," at $9 a shot, according to Ana
> Optiz, Pravda's co-owner.
> 'Almost Silken'
> But equally important is a program to "educate" drinkers on the vodka's
> better quality, and trendy bars are willing cohosts for such events.
> "You can definitely taste the difference with super-premiums," says
> Pravda's Ms. Optiz. Among her favorites is Belvedere, which she
> describes as "very smooth, almost silken," and Stolichnaya Crystal
> Signature, with its "stronger" flavor.
> Even with their lure of "hand-crafted" quality, "traditional" recipes,
> distinctive bottles and unique sources, like iceberg water or Polish
> rye, ultrapremiums could fade as fickle consumers seek the next new
> discovery. What's more, ultrapremiums are likely to be big hits only in
> the U.S. -- the world's second-largest vodka market outside Eastern
> Europe -- because Europeans have never been know to splurge on vodka.
> Ultrapremium vodkas also face an uphill battle against premium vodkas,
> which have increased their own marketing and branding efforts lately.
> Among them are Canadian Iceberg, Teton Glacier and Skyy, all in the $15
> to $18 range. Brown-Forman Corp., the Louisville, Ky., purveyor of Jack
> Daniel's Tennessee Whiskey, recently acquired the Finnish vodka
> Finlandia, which had sold in that range, and plans to raise its price to
> $18 to $20. The company hopes to reverse years of disappointing sales by
> relaunching it this month in a new, snazzier bottle. Just last night,
> Finlandia invited 100 of the hottest bartenders in Los Angeles to view
> the new, sleeker bottle at a bash held at the Creative Artists Agency's
> atrium and screening room. It hosted similar events at bars in New York
> last month.
> And Seagram, which secured the marketing rights to Absolut with much
> fanfare in late 1993, could risk turning drinkers away from that much
> bigger brand. The company has spent heavily to establish Absolut as the
> gold standard for the vodka cognoscenti with its distinctive, hip ads
> using the Absolut name paired with everything from hot locales to rock
> stars to fashion designers.
> A Seagram spokeswoman contends that Sundsvall won't cannibalize the
> demand for Absolut because the new vodka will be "specifically marketed
> to the connoisseur," the person who tends to sample unique wines and
> spirits at home and in restaurants. Rather than spend money on a splashy
> ad campaign, Seagram intends to create marketing material with tasting
> tips for appreciating the brand, she says.
> With so many brands flooding the market and chasing too few drinkers, a
> shakeout is inevitable. "Exclusiveness and premium pricing do work, but
> the days of single brand loyalty are over," believes Mac Cato, chairman
> of Cato Consulting Group, a marketing consultancy in London. "There is
> only so much room for ultrapremiums, and some won't survive."
> --Daniel Michaels contributed to this article.


All those vodka tonics make it *mighty* damn difficult to focus on the
-- Top 5