Vodka Market is predicted to reach USD 70,487.25 million at a CAGR of 5.78% during the forecast period 2023-2032

Market Research Future (MRFR) has published on the “Global Vodka Market”.

Vodka Market Hightlights

Vodka is a clear distilled alcoholic beverage that is colorless and without definite aroma or taste, ranging in alcoholic content from about 40 to 55 percent. Usually, vodka is distilled using grains such as corn, rice, or wheat, but potato vodka is also popular. Vodka’s neutral flavor makes it a versatile base for cocktails. The growth of the global vodka market is attributed to the high demand for alcoholic beverages and the influence of social media and blogging sites. However, the consumers adopting non-alcoholic beverages and stringent government regulations are anticipated to hamper the market growth.

The global Vodka market is projected to witness significant growth during the forecast period, exhibiting a CAGR of 5.78% during the forecast period. The vodka market is a dynamic and evolving segment within the spirits industry, characterized by its diverse range of products, global appeal, and competitive dynamics. Vodka, which has become a household and bar favorite all over the world, circumvents its regional origins in Eastern Europe and is an easily adaptable distilled drink. The neutral taste characteristics, which contribute to its widespread appeal, make it the perfect base for a broad range of cocktails. The proliferation of premium and craft vodkas in response to the consumer demand for uniqueness and quality is one of the main trends on the market. Flavored vodkas, offering an innovative taste and appealing to the younger generation, have also gained popularity. Sustainability and organic production methods have become increasingly important issues influencing consumers' decisions, leading to the introduction of more environmentally friendly approaches by producers. In addition, as brands use social media and immersive experiences to reach out to consumers, the vodka market has seen a shift in its focus towards experiential marketing and digital engagement. The players in the vodka market are constantly adapting, innovatively and redefining their strategies for taking on consumers' ever changing preferences worldwide as competition intensifies.

Market Synopsis

According to the MRFR analysis, the global Vodka market size is projected to reach USD  70,487.25  million by 2032 at a CAGR of 5.78%.

Consumers across the world have more refined tastes than they did five years ago. They are constantly on the lookout for new and premium alcoholic beverages, which frequently comprise a combination of quality components and personalized botanical infusions to provide a satisfying taste. Furthermore, premium vodkas are exposed to various distillation steps to improve their functionality as well as overall attractiveness, distinguishing them from regular types. In addition, the development in health consciousness encourages the consumption of healthier alcoholic beverages that have a blend of natural ingredients, low calorie content, and sugar-free formulation. As a result of the increased consumer interest in a sustainable and healthy lifestyle, the premium vodka collection has larger prospects, particularly in the foreign market.

Additionally, premium vodka companies are launching new products in the RTD (Ready-to-Drink) beverage category, which is experiencing a major increase in consumer demand across the worldwide market. For instance, high-end vodka firms are producing canned products with a focus on spritz serves. Ketel One launched its first canned Botanical Vodka Spritz line in September 2020. Spritz has changed during the last few years. It used to refer to a combination of soda or sparkling water and wine or vodka, but more recent companies, such as Aperol, have embraced it for its well-known soda water, prosecco, and bitter aperitif serve. Because of its recent success, other businesses and even bars have begun to use the term for wine, water, and alcohol pours.

 COVID-19 Impact on Vodka Market

The COVID-19 pandemic and its associated government mobility restrictions influenced alcohol consumption patterns and places. The impact of COVID-19 on on-trade and off-trade was different. For instance, off-trade sales, which include online and offline distribution channels, have abruptly increased, and the impact was positive during the pandemic, as people were not allowed to go outside and meet people, so the demand for vodka from online and offline stores was high. As per the Organization for Economic Cooperation and Development (OECD), online sales had increased by up to 234% in the US in 2020. Additionally, according to the European Alcohol Policy Alliance, there has been an increase in the sales of supermarkets by up to 10 to 15% in Belgium, and in Britain, the alcohol sales of groceries jumped to up to 22%.

Furthermore, the COVID-19 impact on on-trade sales was negative due to social distancing, as bar, club, and restaurant sales abruptly plummeted. For instance, as per the UK Parliament, the hospitality industry, which includes hotels & resorts, restaurants & catering, and nightclubs & bars, had been lower up to 42% in 2020 than in 2019 and 21% lower in 2021 than in 2019. Additionally, the on-trade also seemed to recover with the increasing number of vaccinations and decrease in COVID-19 infection. Therefore, the COVID-19 impact was positive on off-trade and negative on on-trade.

Competitive Landscape

The key players operating in the global Vodka market include Brown-Forman (U.S.), Constellation Brands, Inc (US), Distell Group Limited (South Africa), Bacardi (Bermuda), Henkell Freixenet Holding (Germany), Diageo (UK), Pernod Ricard (France), Davide Campari-Milano N.V. (Italy), Proximo Spirits, Inc (US), and Canadian Iceberg Vodka Corporation (Canda) are dominating the market through constant product innovation and launches that are inline with the increasing demand in the global market along with strategic merger and acquisitions with. Further, in order to acquire a strong customer base in the global market, key manufacturers are expected to increase their investments in research & development and innovate their distribution strategies.

Segmentation

By Product Type

• Flavored: Flavored vodka is a type of alcoholic beverage produced by infusion or maceration and contains flavors like vanillin, caramel, and sugar. It has different tastes depending on the ingredients used in its production process such as orange, lemon, etc. It is typically sweetened to balance the added flavors.


• Unflavored: Unflavored vodka is a type of vodka with the absence of any flavorings, spices, or sugars added to it. It has little if no taste aside from pure alcohol and water. The production process for nonflavored vodkas typically involves filtering. The final step is the addition of water to reduce alcohol concentration.

By Category

• Mass: Mass-category vodka has a low price and compromised quality that is used during the fermentation process, such as potatoes and sugar beet rather than higher quality grains that are found in premium vodka. It is also targeted at the low-income population.


• Premium: Premium vodka refers to a category of vodka that is positioned at a higher quality and price point within the market. It is often characterized by its superior ingredients, meticulous production methods, and distinctively refined taste. Premium vodka brands typically prioritize using high-quality, often locally sourced, ingredients like premium grains or fruits, which are distilled and filtered through advanced techniques to achieve a smoother and purer spirit.

By Distribution Channel

• On-Trade: On-trade refers to the segment of the hospitality and beverage industry where alcoholic beverages, including spirits like vodka, are sold and consumed within specific establishments. This channel encompasses a wide range of venues such as bars, restaurants, nightclubs, hotels, pubs, and other similar hospitality establishments.


• Off-Trade: Off-Trade refers to the segment of the beverage industry where alcoholic beverages, including spirits like vodka, are sold for consumption outside of specific hospitality establishments. This channel includes retail outlets such as liquor stores, supermarkets, convenience stores, and online platforms where consumers can purchase alcoholic beverages to consume at home or other locations. In the off-trade distribution channel, customers buy bottled or packaged spirits to take away and consume at their own convenience.

By Region

• North America: In terms of market value, North America held a share of 28.79% in 2021, which is USD 11,140.96 million. North America is attributed to the presence of major manufacturers, increasing popularity of flavored vodkas, and increasing demand for Heritage 176 vodka in the US and Canada. 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 propel the market's expansion.


• Europe: Europe is the major markets for Vodka. It held a market share of 36.87% in terms of value in 2021 in the global Vodka market. Moreover, the rising demand for premium vodka and the growing cocktail culture are the major drivers for the growth in Germany, France, and other countries. Europe’s unconventional affection toward alcohol has provided a fairground for the vodka market to flourish throughout the continent.


• Asia-Pacific: Asia-Pacific is anticipated to register the highest growth rate over the forecast period. This is due to the enlarging Western influence. Asian nations have imported many things from European culture including culinary habits, way of dressing, and many more. In addition to that, ameliorating infrastructure and disposable incomes due to budding affluence have their fair share in the growth of the vodka market throughout the Asian continent. Moreover, increasing demand for agave-based non-flavored vodka products from emerging economies such as China and India to accomplish the demand for white spirits. Also, the emerging trend in China to consume vodka flavored with mint with a bright blend of lemonade is propelling the market growth.


• Rest of the World: South America, The Middle East & Africa are the prominent countries of the rest of the world. The vodka market in the above-mentioned regions is likely to witness growth due to the increasing number of companies and subsidiaries, the increasing consumption of alcoholic beverages, and the shifting consumer inclination towards premium and ultra-premium drinks represent some of the key factors driving the market toward growth. Moreover, rapid urbanization is likely to favor market growth. Middle East countries such as the UAE and Kuwait are anticipated to strengthen the regional market due to their economic stability.