Flavored Vodka Market Size was valued at USD 10.09 Billion in 2018. The Flavored Vodka market industry is projected to grow from USD 16.02 Billion in 2023 to USD 24.22 Billion by 2032, exhibiting a compound annual growth rate (CAGR) of 8.90% during the forecast period (2024 - 2032). The growing adoption of flavored beverages and the rising demand for craft cocktails and mixology are the key market drivers enhancing the market growth.
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
In recent years, the food and beverage sector has witnessed a shift in customer demand toward more "premium" items. Premiumization, defined by a greater emphasis on flavor, premium ingredients, and more enticing packaging, has greatly influenced the items consumers seek. In the beverage business, premiumization has played a particularly important role. The emergence of low-cost alternatives has increased customer demand for premium products and made them seem more worthwhile.
A survey conducted in 2022 by the Distilled Spirits Council of the United States (DISCUS) found that 33 percent of all spirits sold in the country were premium spirits. There are multiple explanations for this ongoing expansion. Younger drinkers, or millennials, are the main forces behind premiumization. The demand for vodka is expected to rise shortly due to millennials' growing spending power and increased desire for genuine, premium, and ethical items. This rise is also greatly influenced by globalization, as well-established Western trends, such as the desire for luxury alcohol, spread to new regions. Offering fresh tastes was shown to be the main factor in American consumers' view of RTD alcoholic beverages as premium, according to an IWSR survey. As a result, players concentrate on introducing new tastes to meet consumer demand. For example, one of the world's leading spirits companies, Pernod Ricard, introduced 'Absolut Mini' in three flavors: Mandarin, Citron, and Raspberry under the Absolut name.
Furthermore, flavored vodkas can be enhanced with exotic fruits such as dragon fruit, lychee, guava, and passion fruit, which offer a delightful and tropical taste. Adding the spiciness of jalapeños or other chili peppers to vodka can attract customers who like their drinks a little spicy. Special plant and herb pairings, like rosemary, basil, lavender, and thyme, can provide a refined and fragrant profile. Flavored vodkas can benefit from the aromatic and sophisticated addition of floral notes such as violet, elderflower, or hibiscus. Citrus fruits can produce a bright and zesty flavor when combined with exotic spices like cardamom, ginger, or lemongrass. For those seeking a more sophisticated and gastronomic experience, unconventional savory flavors like cucumber dill, roasted garlic, or truffle may be appealing. Thus, driving the Flavored Vodka market revenue.
The Flavored Vodka market segmentation, based on type, includes flavored and non-flavored. In 2023, the non-flavored segment dominated the market. Flavorless vodkas go through multiple distillation stages to improve their overall appearance and functionality, making them stand apart from other cocktails. They can frequently combine customized botanical infusions and premium components to create a delicious flavor. Furthermore, the rise in health concerns promotes the use of alcohol that is sugar-free, low in calories, and manufactured with natural components. To satisfy the growing consumer needs, businesses in the sector offer a selection of unflavored vodkas.
The flavored category is anticipated to be the fastest growing. The industry's growth is mostly driven by the millennial generation's constant demand for premium flavored vodka. Strong economic growth in many nations has increased customer demand for upscale flavored vodka cocktails due to their willingness to spend money on high-quality products. To meet the growing demand, spirits producers worldwide are concentrating on introducing high-quality flavored vodka goods onto the market. For example, in March 2022, BACARDI, a well-known spirit brand, introduced TAILS COCKTAILS, a line of products for mixing cocktails at home that make serving high-quality drinks simple, fast, and reliable.
Figure 1: Flavored Vodka Market, by Type, 2023 & 2032 (USD Billion)
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
Based on distribution channels, the Flavored Vodka market segmentation includes off-trade and on-trade. In 2023, the on-trade category generated the most income. This is because hotels, lounges, bars, nightclubs, and quick service restaurants are all included in the on-trade distribution channel section. Worldwide, the number of pubs is increasing, and the hospitality industry is developing, leading to significant demand for premium vodka goods such as RTD and mixes. Hotels, bars, and restaurants have greatly enhanced the cocktail experience that appeals to millennials. By trying out local flavors and purchasing from artisan distilleries, millennials demonstrate their desire for uniqueness and authenticity in flavor. An increasing number of millennials are attempting to engage with their chosen manufacturers through direct-to-consumer sales.
The flavored vodka off-trade segment is anticipated to grow fastest during the forecast period, of 2024–2032. The off-trade section includes all retail establishments, including wine and spirit shops, hypermarkets, small markets, liquor specialty stores, and supermarkets. Because these stores have a wide range of discounts and promotions, customers favor them. These establishments provide not only simple access to many types of alcohol but also discounts and promotional offers.
By region, the study provides market insights into North America, Europe, Asia-Pacific, and the Rest of the World. The North American flavored vodka market will dominate this market, owing to the epidemic that has caused changes in consumer behavior that continue to impact the demand for and consumption of vodka in North America. These developments will have a long-term impact on the alcoholic beverage industry, especially the craft spirits market, even after the COVID-19 lockdowns and limitations are lifted. Due to consumers' growing desire for high-end, real drinks with distinctive flavors, vodka is growing. One of the most widely consumed artisanal spirits in the area is vodka. Throughout the projected period, rising vodka consumption is expected to increase demand for the beverage in the region.
Further, the major countries studied in the market report are the US, Canada, Germany, France, the UK, Italy, Spain, China, Japan, India, Australia, and South Korea.
Figure 2: Flavored Vodka Market Share By Region 2023 (USD Billion)
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
Europe's Flavored Vodka market accounts for the second-largest market share because the region's per capita consumption of alcoholic beverages has increased significantly over the years. According to data from the Swedish Board of Agriculture, Sweden consumed 32.3 million liters of spirits annually in 2021, a 21 percent rise from the previous year. This is a major reason for the region's vodka market's sustained growth. Further, the German Flavored Vodka market held the largest market share, and the UK Flavored Vodka market was the fastest-growing market in the European region.
The Asia-Pacific Flavored Vodka Market is expected to grow at the fastest CAGR from 2024 to 2032. It is due to China, Japan, and India are among the Asia-Pacific nations that have emerged as vodka's main markets. Tito's International claims that because 60% of the world's millennials, the company's target market, reside in Asia, the region is significant for the business. As the cocktail culture expands throughout the Asia-Pacific region, vodka quickly becomes the liquor of choice for consumers in other categories. Moreover, China’s Flavored Vodka market held the largest market share, and the Indian Flavored Vodka market was the fastest-growing market in the Asia-Pacific region.
Leading industry participants are making significant R&D investments to broaden their product offerings, contributing to the further expansion of the Flavored Vodka market. In addition, market players are engaging in various strategic endeavors to broaden their worldwide reach. Significant developments in the market include introducing new products, agreements under contracts, mergers and acquisitions, increased investment, and cooperation with other entities. It must provide affordable products for the Flavored Vodka sector to grow and thrive in an increasingly competitive and rising market environment.
Manufacturing locally to reduce operating costs is one of the primary business strategies manufacturers use in the worldwide Flavored Vodka industry to assist customers and expand the market sector. The Flavored Vodka sector has provided some of the biggest medical benefits in recent years. Major players in the Flavored Vodka market, including Brown-Forman Corporation, Belvedere Vodka, Bacardi Limited, Diageo, Pernod Ricard, Stoli Group, Proximo Spirits, Inc., Distell Limited, Constellation Brands, Inc., Iceberg Vodka Corporation., and others, are attempting to increase market demand by investing in research and development operations.
The company Constellation Brands Inc. (CBI) manufactures and sells alcohol. Its product line consists of beer, spirits, and wine. The firm sells these goods under the brand names SVEDKA, SIMI, Kim Crawford, Robert Mondavi, High West, Cook's California Champagne, Corona Extra, Corona Light, Corona Premier, Corona Familiar, Corona Refresca, Mount Veeder, My Favorite Neighbor, Casa Noble, Mi CAMPO, and Mi CAMPO. In states where the government is the distributor, CBI distributes its products through state alcohol beverage control agencies, wholesale wholesalers, and retailers. The business runs and oversees vineyards, breweries, distilleries, and other establishments across the US, Canada, Mexico, Italy, and New Zealand. Constellation Brands introduced "Fresca Mixed," a new brand of high-end pre-mixed drinks in two varieties, Tequila Paloma and Vodka Spritz, in August 2022.
The Stoli Group innovates in creating, managing, and marketing extraordinary adult drinks. Stoli Group, founded in the late 1990s and formerly part of SPI Group, has an impressive collection of extremely premium wines, spirits, and non-alcoholic beverages. It is a leader in the creation, administration, and distribution of these brands. With its headquarters in Luxembourg, the company has a long history dating back to the early 20th century. It uses its production facilities and those linked with it in Argentina, Latvia, Spain, Mexico, the UK, and the US. The company, known for its main brand, Stoli® Vodka, caters to high-end, international clients. Iconic brands, including elit® Vodka, Bayou® Rum, Kentucky Owl®, Wiseman®, Cenote® Tequila, Se Busca® Mezcal, and Tulchan® Gin, are at the core of Stoli Group's product line. The Stoli Group operates in more than 176 markets globally and partners with a 300-strong distribution network. In addition, to help generate money for Ukrainian refugees, the World's Central Kitchen Ukrainian Relief would benefit from a limited-edition vodka Stoli Group announced in April 2022.
Flavored Vodka Industry Developments
February 2023: Diageo increased the size of its product line by introducing the Cherry Drop Smirnoff variety, a new product with a distinctive flavor and 37.5% ABV.
September 2022: One of the largest wine and spirits companies in the United States, Brown-Forman Corporation, announced that it would begin distributing its brands in Slovakia in September 2023. With an emphasis on the well-known Jack Daniel's Tennessee Whiskey and Finlandia Vodka brands, this calculated move seeks to support the portfolio's growth.
| Report Attribute/Metric | Details |
| Market Size 2018 | USD 10.09 Billion |
| Market Size 2023 | USD 16.02 Billion |
| Market Size 2032 | USD 24.22 Billion |
| Compound Annual Growth Rate (CAGR) | 8.90% (2024-2032) |
| Base Year | 2023 |
| Market Forecast Period | 2024-2032 |
| Historical Data | 2019- 2021 |
| Market Forecast Units | Value (USD Billion) |
| Report Coverage | Revenue Forecast, Market Competitive Landscape, Growth Factors, and Trends |
| Segments Covered | Type, Distribution Channel, and Region |
| Geographies Covered | North America, Europe, Asia Pacific, and the Rest of the World |
| Countries Covered | The US, Canada, Germany, France, UK, Italy, Spain, China, Japan, India, Australia, South Korea |
| Key Companies Profiled | Â Brown-Forman Corporation, Belvedere Vodka, Bacardi Limited, Diageo, Pernod Ricard, Stoli Group, Proximo Spirits, Inc., Distell Limited, Constellation Brands, Inc., and Iceberg Vodka Corporation |
| Key Market Opportunities | Growing emphasis on small batch & limited edition vodkas and natural ingredients. |
| Key Market Dynamics | Growing adoption of flavored beverages and the rising demand for craft cocktails and mixology |
Frequently Asked Questions (FAQ) :
The Flavored Vodka market size was valued at USD 10.09 Billion in 2018.
The market is projected to grow at a CAGR of 8.90% during the forecast period, 2024-2032.
North America had the largest share of the market.
The key players in the market are Brown-Forman Corporation, Belvedere Vodka, Bacardi Limited, Diageo, Pernod Ricard, Stoli Group, Proximo Spirits, Inc., Distell Limited, Constellation Brands, Inc., and Iceberg Vodka Corporation, among others.
The non-flavored category dominated the market in 2018.
On-trade had the largest share in the market.
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