Business

Vodka at the heart of a global economic battle.

Fabio Bonavita

By Fabio Bonavita22 mai 2020

For nearly twenty years, vodka has been at the heart of a global economic battle. Billion by billion, the major industrial groups have been snatching up the leading labels. The ambition: cracking open the markets of tomorrow, starting with China, India and Brazil.

The recent trendy status of the Moscow Mule cocktail is boosting vodka sales worldwide. (Unsplash)

144

litres of vodka consumed per second every day in the world

40%

the market shares of vodka

70

billion Swiss francs per year as worldwide turnover

According to The International Wine and Spirit Record, the world is drinking 144 liters of vodka every second of every day. As the world’s leading spirit, accounting for almost 40% of the market, vodka represents a turnover in excess of 70 billion Swiss francs per year. No wonder, then, that major multinationals are thirsty for a shot at this market, and big players have been battling it out for a stake in it since 2002, when luxury giant LVMH acquired a 40% stake in the Millennium Import Company, owner of vodka brands Belvedere and Chopin. Christophe Navarre, then president of Moët Hennessy, lauded the move, saying, “With the Belvedere and Chopin brands, Millennium has raised the stakes in the market for premium vodkas in the United States. We look forward to helping to build their brands worldwide thus strengthening Moët Hennessy’s position as the leading luxury Wines and Spirits Group. This partnership brings together complementary strengths and savoir faire in a market that presents great opportunities for creating value.” Five years later, LVMH acquired Millennium Import Company in its entirety.

Promising growth

One year later, in 2008, the Pernod Ricard Group acquired the Swedish vodka brand Absolut, a business valuated at over €5.6 billion. These moves attest to rising competition in a market full of promise. It’s clear to all the players that vodka consumption has been on the rise in China, India and Brazil – and these countries also show a huge potential for further expansion. But in order to survive, you need to stand out. This is what Belvedere vodka is trying to do now, by aiming to become the favorite drink of the Polish elite. Since its launch in 1993, Belvedere vodka has been a top-of-the-range choice, with a price that is generally two to three times higher than other labels and boasting a unique production process. This tipple is made from golden rye and local spring water only, with no sugar or additives. This makes it stand out from its competitors which are generally made from wheat, barley, corn or potatoes. And the distillery has remained the same even after being purchased by the LVMH group. Centrally located in the small town of Zyrardow, Belvedere produces about one million cases every year. 

Artistic collaborations

An essential element of Belvedere’s strategy of attracting an affluent clientele is packaging. The central element of the Belvedere logo is the presidential palace in Warsaw, surrounded by trees evoking the forest that surrounds the distillery. And the design evolves with artistic collaborations. In 2018, for example, Nigerian artist Laolu Senbanjo created a new label for a limited-edition bottle. The result blended a charcoal-colored pattern of figured shapes suggesting body art on skin. “I did a lot of research about what Belvedere is at its core,” says Senbanjo, “like the rye and the pristine water. This bottle is an amazing blend of my art and bringing to life what Belvedere stands for – in this way I get to actually give something back myself, which means a lot to me".

Production has doubled

This partnership became the perfect opportunity to make the brand known all over the world, especially on the African continent, where vodka is not - at least not yet - engrained in popular culture. And the Belvedere strategy seems to be bearing fruit as more partnerships emerge: last year the brand teamed up with American singer-songwriter Janelle Monàe. Agnieszka Dyrala, the person in charge of creating new spirits at Belvedere, was quoted in the Influencia platform saying that production has doubled in the last five years. This success can be explained in part by its targeted marketing campaigns, but also by a vision focused on sustainability. Since 2012, the Polish distillery has reduced its greenhouse gas emissions by 42%, principally by relying on sustainable organic agriculture for the rye and the involvement of local communities.   

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