Vodka is still a strong category in Australia
By John McDonnell
If you look at industry forecasts for vodka in Australia, it is not surprising that there is a very positive outlook for the category in the country. Though other spirits categories certainly have their respective moments of popularity, Aussie vodka drinkers are unfalteringly loyal. And it’s one of the reasons why Australia is such an important market for brands like Tito’s Handmade Vodka.
According to the experts at IWSR Drinks Market Analysis, total vodka volume in Australia is forecasted to grow by 2.8 per cent compound annual growth rate 2019-2024. Compare that to whisky which is projected to grow less than one per cent CAGR. Total spirits volume in Australia is estimated at under plus-two per cent CAGR to 2024.
But while vodka growth is nicely outpacing total spirits in the country, the real story here is what’s happening Down Under with premium-and-above vodkas (those categorised at AUD$47.50 or more). Vodka brands in this tier are forecasted to grow by 4.8 per cent CAGR 2019-2024.
Given the growth – and continued potential – of top-end vodka in Australia, we’ve been searching for several years for the right distributor to represent Tito’s Handmade Vodka in the market.
Early last year we appointed Brisbane-based ICONIC Beverages to take on our brand, and I’m enormously pleased with the success they’ve achieved in such a short time (we’ve secured more listings for Tito’s in Australia in the past year than we did in the five years prior.) I asked Dean Terranova, ICONIC Beverage’s Founder and Managing Director, why vodka – particularly premium vodka brands – continue to perform so well in Australia.
“Vodka has long since been a staple product of the liquor industry and while some other spirits experience peaks in popularity, vodka is forever,” Dean says. “Vodka is generally less expensive than other spirits, even at the premium tiers, and it’s accessible. Vodka drinkers stick with the category and they’re fiercely devoted to their favorite brand. Tito’s is a category leader globally, and we are now seeing consumer recognition of this through our ongoing success with the brand in Australia.”
Vodka in Australia is also following a trend I see in other markets around the world, younger consumers aren’t interested in what their parents and grandparents drink, they’re moving away from dark spirits opting instead for spirits that lend themselves to lighter, fresher cocktails.
Versatile spirits like vodka have also significantly benefitted from the shift to at-home consumption, and the need for products and brands that make it easy to create cocktails. Tito’s Handmade Vodka is up double digits in volume growth in retail across Australia, growing well ahead of the category, and we’ve also seen very swift uptake on our recently launched one-litre bottle in the off-trade. Our goal now, of course, is to help the on-premise continue to get back, and get more people drinking vodka (preferably our vodka!) in bars and restaurants.
Looking again at IWSR data, over the next five years premium-and-above vodka is projected to grow faster in Australia than in several other major markets, including New Zealand, Singapore, the U.S., the UK, France, and Russia. The vodka category continues to have a very positive future of growth in Australia.
John McDonnell is Managing Director, International, at Austin, Texas-based Fifth Generation, Inc., the maker of Tito’s Handmade Vodka. Over John’s decades-long career in beverage alcohol, he has launched and marketed a number of successful global brands and is highly regarded as leader in the industry.