A number of vodka brands will likely be watching the escalating Ukraine conflict closely, as calls to boycott Russian-made products gain momentum, GlobalData has said.
The US government has put sanctions on state-run liquor stores to stop selling Russian-made vodka and distilled spirits, while a number of retailers and private businesses are also undertaking similar measures.
'Damage Brand Recognition'
According to GlobalData, these sanctions will both damage brand recognition of Russian suppliers while offering a spotlight to other producers.
“Governments have been implementing sanctions however, it is interesting to see similar moves from the wider public and independent businesses," commented Carmen Bryan, consumer analyst at GlobalData.
"GlobalData’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.”
The global vodka market was valued at $75.7 billion (€68.3 billion) in 2020, representing an 11.3% share of global spirits value, making it the third largest category after rum and whiskey.
While the market is expected to grow over the period 2020 to 2025, this will take place at a slower pace than other categories, due to limited innovation, GlobalData said.
Boycott A Brand
A separate GlobalData study found that two in five (41%) of consumers either 'completely' or 'somewhat' agree that they will boycott a brand that 'does not align with their personal beliefs or values', which could present issues for Russian vodka makers.
“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," said Bryan.
"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.”
GlobalData added that a potential long-term implication of this conflict could see vodka supply chains overhauled, with more localised production in Russia and the rest of Europe, as well as increased trade to Asia.
© 2022 European Supermarket Magazine – your source for the latest Drinks news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.
