Let Them Drink Cake: Americans Like Small-Batch Liquor, But Love the Magic of Flavored Vodka

Artisanal Movement Spurs Popularity in Authentic Whiskeys; Tech Craze Inspires Sweet-Drink Trend

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Last year's rise in liquor sales was largely heralded as an indicator of a recovering economy, as more consumers shelled out for premium alcohol. But upon closer inspection, the story is a bit more convoluted.

Turns out that the growth comes from sales of two very different products that represent two very different tastes and segments of liquor lovers: artificially flavored drinks (ahem, cheesecake vodka) and small batch, authentic browns—primarily Irish whiskey and single-malt scotch.

Could these two groups be any further apart? What's going on here, and what's driving each trend?

Let's take a look. Across almost all product categories, the last two years have pointed toward "authentic," "natural" and "from the Earth." Consumers have strived to reconnect with the basics, and as Melanie Howard of the Future Foundation says, consumers want to "get in touch with what they believe to be a more real world."

When it comes to proving trend- worthiness, the proof is in the pudding—the rapid rise of slow food, food traceability, D-I-Y life, and most broadly, the appreciation for everything artisanal. So for those looking to get back to their roots, it makes good sense that older, more traditional forms of spirits are accelerating the quickest. The fastest-growing spirits category in 2012 was Irish whiskey, whose brands include Jameson, Bushmills and Kilbeggan, with volume up 22.5%. Single-malt scotch, such as Laphroaig, Macallan and Glenlivet, rose 13%. And it also makes sense to see the explosion of small-batch distilleries all over the world, and the big companies swooping them up.

But dig a little deeper. Look at the big numbers and product development. More than 40% of all products in the U.S. market have a flavored version beyond the traditional product. In vodka, which accounts for a third of all liquor sold in the U.S., 177 products launched in 2012 and 122 of those were flavored, accounting for nearly 1 million cases. According to Technomic's recently released Special Trends in Adult Beverages Report, nearly a quarter of all vodka consumed in 2011 was flavored.

Want some anecdotal evidence to back up the numbers? Go to Smirnoff.com and click the products tab. I'd bet you've never heard of at least 10 of their vodka variants.

To your health?
What's driving the consumption of flavored vodkas? Some say it's tied to health and wellness trends in a country largely struggling to wiggle out of obesity.

With the recent diet fads, people are trying to cut sugar-loaded sodas and juices out of their drinks," says Matt Daniels, bar manager at Wall at the W in South Beach. Using flavored vodka is a way to cut calories out of your favorite cocktail. Adding flavors to essentially flavorless vodka eliminates the need for sugary mixers.

Perhaps there's something besides a health trend driving this consumption of chocolate-cake shots. Consider the organoleptic experience behind these chemical wonders. It is downright mystical, a magic trick my friends and I must see again to try and solve. According to the numbers, we aren't the only ones to whom the artificial, the chemical and the inexplicable appeal.

Americans believe deeply in scientific advancement, and it is for that reason, I think, that spirits are thrilling consumers in the same way some of our favorite technology does. Science-driven magic is happening everywhere, and we can't get enough. "How does the TV see the content on my phone?" isn't that much different from "How does this vodka taste like a watermelon?" Despite the popular challenges science faces, it's fundamentally American to embrace it and the experience it delivers.

More than most other cultures, we like flash-bang innovation and great leaps of progress. These are almost always experienced through surprise and thrill.

Let's face it: Fads have a shelf life. As a nation, we have grown to expect big sensations from the next big thing.

Of course, you could argue that we've just grown big—and an addiction to sweet flavors has something to do with it.

Either way, let's raise a glass to having our cake and drinking it, too. Sure, it's a chemical compound likely more complex than most insect repellents, but is a liquid that tastes like cookies or candy or watermelon … and that's magic. According to the numbers, the rest of America is just as compelled as we are.

Nate Dwyer is a planner at Red Peak Branding, a strategic branding and design agency and unit of Red Peak Group.
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