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MARKET SUMMARY

1.1 Definition and scope of the study

Vodka is a colourless alcoholic beverage traditionally produced from cereals (rye, wheat) and potatoes, although other agricultural products can be used (beets and fruits).

The vodka market is a sub-segment of the spirits market (drinks produced from distilled alcohol). The French Federation of Spirits (FFS) separates spirits into two categories:

  • "Simple" spirits which includes vodka, but also whisky, gin and rum, whose taste is linked to the distillation of the raw material.
  • "Compound" spirits such as aniseed aperitifs, or liqueurs whose taste is linked to the addition of aromatic substances to a neutral alcohol or brandy.

In this study we cover vodka only, but put data and trends in relation to the overall spirits market in France.

Globally, the market has remained stable in the latest years, with an expansion of a mere 0.9% since 2017. Vodka is still considered a complementary spirit in many parts of the world, and is less frequently consumed separately compared to for example whisky or cognac.

In France, vodka production is grouped under NAF code 11.01 Production of distilled alcoholic beverages which grew at a CAGR of 5.3% between 2012 and 2019. Although overall alcohol consumption in France is down, premium assortiments are growing in popularity, thus boosting turnover for the industry. Indeed, a shift is occuring from quantities to quality, which applies for vodka as well. Interestingly, French production plays a large role in this evolution not only domestically, but also internationally, with large export turnover through brands such as Grey Goose and Ciroc.

Still today, the most purchased vodka brands in France are low-cost and include Poliakov and Subieski. Most brands are owned by the four giants of the industry namely La Martiniquasie, Pernod Ricard, Diageo and Bacardi. However, parallel to this, we see a rise in local niched players with brands such as Blu Frog and Citadelle. These players push the fact that they offer product differentiation, a craftsman-like production process, and a "Made in France" label.

 

 

1.2 Positive momentum in the global market

Vodka global market size World, ****-****, in $US billion Source: thespiritsbusiness In ****, the global vodka market size amounted to $**.** billion. By ****, it is expected to have grown to $**.** billion, which represents a *.*% increase. Several factors contribute to this growth, including premiumization of products, higher demand from millennials, and more aggressive marketing ...

1.3 National market is increasing, but vodka's share remains small

Market size distilled alcoholic beverages (***) France, ****-*****, in € million Source: ****

The graph above depicts the French market size of distilled alcoholic beverages. The latter is defined as beverages obtained by distillation from wine or other fermented fruit or plant juice or from a starchy material (***) that has first been brewed, between ...

1.4 International Trade

This section analyses France's trade with spirits. Data is retrieved from UN Comtrade and in particular the code **********-Vodka is used.

Trade of vodka France, ****-****, in $US million and in % Source: ****

From the graph above it is clear that France exports more of vodka products than it imports. The coverage ...

DEMAND ANALYSIS

2.1 Profile analysis: The French vodka consumer

Consumption 

Number of people using vodka France, ****-****, in million users Source: ****

The graph above depicts the evolution of vodka users in France. Similar to that of spirits, France's overall consumption is decreasing, with some *.** million users in **** (***). This is equal to a decrease of around **%. 

Heavy users are the top ...

2.2 Demand cyclicality

Search interest "Vodka" France, ****-****, in index value Source: ****

The graph above represents the proportion of searches for a given keyword in a region and for a specific time period, compared to when the rate of use of that keyword was highest (***). Thus, a value of ** means that the keyword has ...

2.3 Vodka's role in cocktails and drinks

Cocktail consumption is indeed a catalysator for vodka demand. Globally, vodka's usage in drinks and cocktails is important; among the ** best selling-cocktails in the world, we find two which include vodka, namely Bloody Mary and Moscow Mule. [***] No vodka containing drink was included on the list.

Cocktail and spirits consumption, by ...

MARKET STRUCTURE

3.1 Actors on the vodka market

The vodka market in France is interesting to study; although only region in the nation (***) in **** in terms of exports. [***]

Domestically, vodka is mainly distributed in physical channels, whereas for foreign demand physical stores prevail although e-commerce is gaininig grounds as worldwide shipping becomes easier. Three types of distributors can further ...

3.2 Production

There are six steps to the production process for vodka:

Preparation of the mash Sterilization and inoculation Fermentation Distallation and modification Adding water Bottling

[***]

Below each step is further explained.

Raw material harvesting and processing

Today, most vodka is made from fermented grains such as sorghum, corn, rice, rye or ...

3.3 Distribution analysis

According to spiritueux white spirits (***) the figure for volume sales pertained **% to vodka in ****. In other words, vodka has a more pronounced stronghold in terms of distribution in environments where the consumer is not mixing the drink himself, but rather get it served. This can be devoted to the fact that ...

3.4 Entretien avec Frédéric Beigbeder et Guillaume Rappeneau, cofondateurs de Le Philtre

Aymar

Bonjour et bienvenue dans vue d'ensemble, le podcast qui vous permet de décrypter en ** minutes les enjeux d'un marché. Je m'appelle Aymar Monnoyeur et je suis fondateur de Businessscoot, une startup spécialisée dans les études de marché. Aujourd'hui, avec Cantiane nous recevons Frédéric et Guillaume, ...

ANALYSIS OF THE OFFER

4.1 Product analysis: vodka in France

Source: ****

4.2 Price and cost analysis

Brand Price range* Absolut Vodka €**.**-€**.**/**** mL Poliakov €**.**-€**.**/**** mL Sobieski €**.**-€**.**/**** mL Eristoff Original €**.**-€**.**/**** mL Zubrowka Bisson Grass Vodka Poland €**.**-€**.**/**** mL *The price comparison for the same brand sold by different distributors is presented by wine-searcher, and is correlated to proximity; this helps explain the large price range. ...

4.3 Supply trends: premiumization

In France the overall consumption of spirits continues to diminish. Meanwhile, there is an increase in the share of products which belong to the luxury beverage segment. According to larvf these trends are created in bars and restaurants, since it takes four to five years before premium brands reach supermarket shelves. ...

RULES AND REGULATIONS

5.1 Strict regulation around spirits

France is affected by regulation on a European level. In particular, the regulations below are central:

Regulation (***) No ***/**** of the European Parliament and of the Council of ** January **** on the definition, description, presentation, labelling and the protection of geographical indications of spirit drinks related to this regulation, we find ****/*** and ***/**** which ...

5.2 Regulation on vodka in particular

The legislation presented below is the prevailing framework to relate to when analysing vodka regulation in France. It stems from REGULATION (***) No ****/**. 

Point **

a) Vodka is a spirit drink made from ethyl alcohol of agricultural origin, obtained by yeast fermentation:

i) either from potatoes and/or cereals,

ii) or other agricultural ...

POSITIONING OF THE ACTORS

6.1 Segmentation

  • La Martiniquaise
  • Pernod Ricard
  • Diageo
  • Bacardi
  • Bastille Day (Guillotine)
  • Maison Villevert (Cîroc)

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Analysts

Hugo S.

chargé d'études économiques, Xerfi

Hugo S.

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Mathieu Luinaud

Associate Consultant

Mathieu Luinaud

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Education Formation
Robin C.

PhD Industrial transformations

Robin C.

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Pierre D.

Analyst

Pierre D.

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Ross Alumni Club France

Arnaud W.

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Analyste de marché chez Businesscoot

Amaury de Balincourt

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Pierrick C.

Consultant

Pierrick C.

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Maelle V.

Project Finance Analyst, Consulting

Maelle V.

Héloise Fruchard

Etudiante en Double-Diplôme Ingénieur-Manager Centrale

Héloise Fruchard

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Imane E.

EDHEC

Imane E.

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Vincent D.

Auditeur

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Eva-Garance T.

Eva-Garance T.

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Michela G.

Market Research Analyst

Michela G.

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Azelie P.

Market Research Analyst @Businesscoot

Azelie P.

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Cantiane G.

Market Research Analyst @Businesscoot

Cantiane G.

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Jules D.

Consultant

Jules D.

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Alexia V.

Alexia V.

Emil Ohlsson

Emil Ohlsson

Anna O.

Anna O.

Gabriel S.

Gabriel S.