Russian vodka is in a “precarious position” as brands face widespread boycotting because of the war in Ukraine.
According to Global Data’s Q3 2021 consumer survey, two in five (41%) people around the world completely or somewhat agree that they will boycott a brand that does not align with their personal beliefs or values.
Furthermore, 51% of people are more loyal to brands that support social causes and human rights.
Following Russia’s invasion of Ukraine, there have been calls to boycott Russian brands – meaning Russian vodka has become a target.
The US government, for example, has put sanctions on state-run liquor stores to stop selling Russian-made vodka and spirits. Private establishments are also choosing similar courses of action.
In the UK, for example, a number of leading bars have declared they will stop pouring Russian spirits in solidarity with Ukraine.
Carmen Bryan, consumer analyst at Global Data, said: “Government have been implementing sanctions however, it is interesting to see similar moves from the wider public and independent businesses.
“Global Data’s survey reveals that brand loyalty is heavily influenced by alignment to one’s values.
“This puts Russian vodka brands in a precarious position, as prolonged conflict will not only damage immediate sales, but may also cause permanent disillusionment against Russian commodities in the long term.”
Opportunity for non-Russian vodkas
Global Data highlighted how sanctions have the power to damage brand recognition, but also allow room to spotlight other producers.
The global vodka market was valued at US$75.7 billion in 2020, accounting for 11.3% of total global spirits value, according to Global Data’s Intelligence Centre.
The vodka market’s value is expected to continue to grow from 2020 to 2025, but at a slower pace compared with other categories. This is attributed to a ‘lack of innovation’ and ‘limited premium positioning’ when compared with other spirits.
Bryan added: “Boycotting essential goods can be a difficult and drastic step. However, this becomes a lot more likely in a saturated, non-essential market such as vodka, where there is an array of competitor brands to choose from.
“As the situation in Ukraine continues, we may see people in Western Europe and North America opt for alternative brands such as the Swedish-made Absolut, France’s Grey Goose or the US-made Skyy.”
This week, The Spirits Business interviewed the CEO of Ukrainian vodka brand Nemiroff, who discussed the difficulties now facing the war-torn country.
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Author: Melita Kiely