SVEDKA Vodka (A)
\nAs he waited for his wife to meet him, Guillaume Cuvelier sat in a downtown Manhattan restaurant
\nsipping vodka straight up. As founder and managing director of Spirits Marque One, a liquor importer,
\nCuvelier wondered if patrons of such an upscale bar would soon be ordering his new vodka by its name:
\nSVEDKA. It was mid-1998, and the product was set to launch in just a few months. Scanning the bar for the
\ncompetition\u2019s vodka bottles, Cuvelier ran through the marketing campaign in his head.1
\nThe U.S. government defined vodka as a neutral spirit \u201cwithout distinctive character, aroma, taste, or
\ncolor.\u201d As one food and beverage writer explained, \u201cGood vodka is considered to be one without the harsh,
\nrubbing-alcohol fumes of ethanol.\u201d2 The now-popular liquor originated in the 14th century in either Russia or
\nPoland (depending on which history you believe) as a spirit distilled from rye or wheat. In the early 1800s, the
\nintroduction of filtration and dilution techniques allowed vodka to evolve into something more refined but
\nno less potent.
\nAs Cuvelier enjoyed his drink, the image of James Bond came to mind\u2014described years earlier by an
\nindustry observer as \u201cthe first upscale vodka drinker.\u201d3 Consumers were increasingly imitating Bond\u2019s
\ndiscerning taste for high-priced vodka. In this climate, Cuvelier reviewed his own pricing, distribution, and
\npositioning one last time. He hoped he was right that the vodka market was ready for a midpriced option. He
\nwondered if there really was an opportunity below the Bond tier and above the very low-priced products.
\nWith a small marketing budget, Cuvelier had to be correct in his efforts to position his brand as he created a
\nnew segment.
\nOn Trend
\nTrends in the marketplace inspired Cuvelier to take a closer look at opportunities in the spirits business
\n(whiskey, gin, and vodka were among those classified as spirits). In 1991, he had received his MBA from the
\nDarden School of Business at the conclusion of a two-year hiatus from his position with LVMH\u2019s M\u00f6et
\nHennessy-Louis Vuitton.
\nAs an industry insider during the 1980s and early 1990s, Cuvelier had been inspired by Absolut vodka\u2019s
\nsuccess as a product, brand, and category leader. \u201cPre-Absolut, you could say that vodka was vodka was
\nvodka,\u201d he said.
\nCuvelier believed there was room to compete in the category by offering his own twist on the concept of
\nname-brand vodka. With that purpose in mind, in 1998, Cuvelier founded a small entrepreneurial team of
\nindustry experts in New York City. That same year, vodka was the top-selling distilled spirit, representing
\n24% of total spirits consumption in the United States, up 3.6% in volume sales from 1997. The growth in
\npremium vodka was in stark contrast to the negative long-term trend for most other spirits. (See Exhibit 1
\nfor vodka sales from 1975 to 1998 and project ( help with nursing paper writing from experts with MSN & DNP degrees)ions for the category.)
\nThe Market
\nBranded vodka dated back to the late 1860s, when Smirnoff cultivated the endorsement of the czar,
\nengaged in comparative advertising with competitors, and paid patrons of Moscow bars to demand Smirnoff
\nand accept no substitutes. Russia\u2019s connection with the category became prominent in the minds of many
\nconsumers. A leading imported vodka from Russia, Stolichnaya, had been introduced to the United States as
\nrecently as 1965. The brand leveraged its Russian image, evoking a strong connection to its origin and
\nheritage. But \u201cStoli stumbled after the Soviet downing of Flight 007 in 1982, [which] hurt sales of many
\nRussian products.\u201d4 Once a Russian import, Smirnoff was eventually produced in the United States and came
\nto dominate the domestic vodka segment, capturing almost 20% of the market share by 1998. Until the
\nlaunch of Absolut, Smirnoff dominated the premium-price vodka segment with a brand name that derived
\nauthenticity from the family\u2019s Russian heritage.
\nThe launch of Absolut in 1979 and its now-famous ad campaign helped the brand attain its pop-culture
\nstatus. In 1998, Absolut spent $18 million on advertising.5 Years later, USA Today reported: \u201cAbsolut had
\npioneered selling distilled spirits on image, persuading consumers to buy prestige in a bottle for $20. But the
\nnew prestige vodkas, at $25 to $200, have become what Absolut was 20 years ago.\u201d6
\nIt took more than a decade for the Dutch Ketel One and American Skyy (then the only domestic vodka
\npriced above $10) to enter the market. New prestige vodkas available at a high price point did indeed seem to
\nbecome what Absolut once was. The Business of Spirits stated that the price for vodka \u201cincreased to $30 with
\nthe debut of Grey Goose, Chopin, and Belvedere in the late 1990s. Now, the debut market [was] flooded
\nwith $30 vodkas.\u201d7
\nThe success of Grey Goose proved people would pay $30 for a bottle of vodka; in 1998, its sales
\nincreased 50% from the previous year.8 Cuvelier had watched as \u201cconsumers became increasingly aware about
\nthe look, quality, and origin of vodka.\u201d (Exhibit 2 shows the number of new vodkas introduced from 1996 to
\n1998.)
\nSmirnoff was not alone in its high-volume sales and market share results. Brands such as Popov,
\nGordon\u2019s, McCormick, and Barton (each priced under $10) sold the most cases and enjoyed the largest
\nshares.9 A significant portion of these sales was for the larger-size plastic bottles.
\nCuvelier believed that a midpriced vodka could capture some volume sales from the under-$10 market.
\n\u201cThis standard vodka category had never been expanded to include consumers who were willing to stretch
\ntheir wallets a little bit,\u201d he said.
\nThe Product
\nVodka could be manufactured inexpensively out of many different raw ingredients and didn\u2019t need to be
\naged. Its standard alcohol content was 40% or 80 proof. Because the staple ingredients were relatively cheap,
\nvodka companies invested in more complex distilling and filtering methods as well as flavor ingredients to
\ndistinguish their brands. Marketing campaigns often highlighted \u201cmore exotic backstories\u201d to justify higher
\nprices and profits.10 Indeed, vodka\u2019s smoothness and thickness could vary from brand to brand. \u201cThe burn is
\nusually associated with inexpensive vodkas,\u201d said Robert Plotkin, founder of BarMedia, a beverage consulting
\nfirm.11
\nCuvelier was dedicated to creating a high-quality product that could be distinguished for its soft, silky
\ndrinkability. He selected Lidkoping, Sweden, as the manufacturing site. Cuvelier knew the country had
\nrecently joined the European Union, causing it to deregulate the alcohol monopoly. \u201cMy plan was to be the
\nfirst to effectively develop and produce 80-proof Swedish vodka immediately after the reopening of the
\nmarket,\u201d he explained. \u201cI wanted the vodka to be from Sweden, so I could take advantage of the Absolut
\ntailwind.\u201d
\nSVEDKA outsourced its production to large, established industrial facilities. The glass bottles were
\nimported from Germany, decorated in France, and shipped to the factory in Sweden to be filled with vodka.
\nThe finished product was shipped in cases to the United States.
\nWine Enthusiast confirmed the quality of Cuvelier\u2019s product, rating SVEDKA 93 out of 100. Classifying
\nthe vodka as a \u201cBest Buy,\u201d the review said, \u201cWe can\u2019t remember using the word \u2018complex\u2019 when describing a
\nvodka before, but this one shows a tightly knit set of characteristics that deserve applause.\u201d12
\nSVEDKA would initially be available in the standard 750 mL and 1.75 L bottles. Larger and smaller sizes
\ncould be added once the business grew. \u201cThis gradual size rollout was common industry practice, especially
\nfor a start-up brand,\u201d Cuvelier said. While many brands were extending their selection to include flavored
\nvodkas, SVEDKA focused on its core unflavored product for the launch.
\nThe Price
\nIn addition to the option of imitating the premium prices of recent imported vodka successes, there was
\nthe under-$10-per-bottle market, which Cuvelier estimated was approximately 80% of the market volume
\n(also known as the \u201cstandard\u201d vodka segment, it ranged from $5 to $9 for 750 mL). In fact, in 1998, 23
\nmillion cases were purchased at retail prices less than $10 per 750 mL bottle (Table 1).13 And then there was
\nthe third opportunity: to be a midtier player between the high and low price spectrums.
\nTable 1. Vodka category price, units sold, market share, and launch year by brand, 1998.
\nBrand
\nPrice
\n(750 mL)
\nCases (9 L)
\n(in thousands)
\nMarket Share
\n(percentage) Launch Year
\nGrey Goose $25.00 50 0.2 1997
\nKetel One 18.00 450 1.3 1989
\nAbsolut 16.00 3630 10.6 1979
\nStolichnaya 16.50 1,100 3.2 1970
\nSkyy 11.50 702 2.1 1993
\nSmirnoff 10.00 6,720 19.7 1960
\nGordon\u2019s 7.00 2,155 6.3 1960
\nPopov 6.50 2,230 6.5 1960
\nNote: Market share calculation is based on total case volume for imported and domestic vodka.
\nData sources: Adams Business Media; Virginia Department of Alcoholic Beverage Control; case writer estimates.
\nExhibit 3 shows the supplier case prices for vodka. In 1998, according to a Standard & Poor\u2019s survey of
\nthe alcohol industry, operating margins for U.S. alcohol beverage companies were about 20%, \u201cwell above the
\n12% to 14% range for packaged food companies.\u201d14
\nCuvelier estimated that wholesaler margins for SVEDKA averaged 25%. Retailers\u2019 margins varied from
\n30% to 35%.
\nIt was industry practice to offer retailers volume discounts. Cuvelier created Table 2 to estimate the
\ndiscount levels he would be expected to offer.
\nTable 2. Estimated discount levels based on case quantity discount.
\nDiscount
\nLevel
\nCase Quantity
\nDiscount
\nEstimated
\nSales
\nSavings
\nto Retailers
\n1 3 10% 8%
\n2 5 15% 13%
\n3 25 75% 19%
\nSource: SVEDKA.
\nTo reach a final everyday suggested retail bottle price, Cuvelier had to consider the costs along the
\nwholesale and retail channels. The wholesaler\u2019s net laid-in costs were the sum of the free on board (FOB)
\nprice, the U.S. Federal Excise Tax (FET), state tax, and freight costs. (The FET per proof gallon was $13.50
\nin 1998.) SVEDKA classified the mandatory FET and individual state taxes (which varied by state) as hard
\nproduction costs.
\nPricing was tricky, and critics warned Cuvelier that if the price were too low, consumers might think the
\nvodka was low-quality. But if SVEDKA were priced too high, consumers might question its value. A
\nmidrange price would risk SVEDKA\u2019s getting lost among the more premium brands. Already, higher-priced
\nbrands were encountering competition from the superpremium competitors. In The Business of Spirits, author
\nNoah Rothbaum commented on the dilemma SVEDKA faced: \u201cMany companies with high-priced spirits are
\nconcerned that their products soon will be leapfrogged by other, even more expensive brands, stealing their
\nattention and market share.\u201d15
\nTarget Customer
\nDespite the risks he identified, Cuvelier was optimistic. \u201cI believe that SVEDKA is the only brand in the
\nvodka category to bridge the two ends of the category, appealing to both upgraders and consumers looking
\nfor the best possible value,\u201d he said. \u201cI see SVEDKA as being at the crossroads of the market.\u201d SVEDKA
\nwanted to capture the new vodka drinkers as the category was expanding, along with the \u201cupgraders\u201d who
\nwere looking for an opportunity to drink something better than the standard offerings. SVEDKA could be
\nthe vodka of choice for both price-driven groups.
\nIn addition to considering consumer price sensitivity, Cuvelier segmented vodka drinkers into two large
\ngroups based on age and consumption behavior. Regular vodka drinkers tended to be price-conscious and
\nloyal to a brand; consumers in this first segment were mostly older males. The second group consisted of the
\n21-to-35-year-old consumer, who represented 40% of the vodka market. (Exhibit 4 shows the breakdown of
\ndistilled spirits drinkers by category and age group.) Cuvelier thought this target group was also priceconscious, but not so brand-loyal. He was confident that SVEDKA, if positioned properly, would be able to
\ntap into this younger crowd.
\nDistribution
\nOff-premise (or off-trade) channels were the liquor and retail stores, while on-premise (or on-trade)
\nchannels included bars, hotels, and restaurants. Brands were usually launched simultaneously in both the ontrade locations and retail outlets. The on-premise percentage of volume was higher for premium brands
\nbecause consumers often ordered drinks mixed with a specified brand-name vodka. For example, in 2003,
\n51% of Ketel One\u2019s volume was from on-premise. The percentages of on-premise consumption for Grey
\nGoose, Absolut, and Stoli were 48%, 38%, and 37%, respectively.16
\nThe spirits industry was a highly regulated business. Producers and importers could not sell directly to the
\nretailers; instead, they were required to sell to licensed liquor wholesalers, who then serviced retailers.
\nLicenses were issued by the state and therefore restricted wholesaler distributors from operating beyond any
\ngiven state\u2019s jurisdiction. Cuvelier relied on a small internal sales team to manage the distributors as key
\nclients. By leveraging relationships within the industry, \u201cI tried to overcome the biggest hurdle of getting
\ndistributors on board,\u201d he said.
\nAnother obstacle in distributing liquor was the issue of control states (also known as monopolies). In 18
\nU.S. states, accounting for about 25% of the population, state governments exercised monopoly control over
\nthe wholesaling and\/or retailing of alcohol (Exhibits 5 and 6). These states, among them North Carolina,
\nVermont, and Washington, were scattered across the country. Michigan, Pennsylvania, Washington, and
\nVirginia were not only control states but also ranked among the top 15 states for retail spending on distilled
\nspirits.17 Most control states had higher taxes and prices than noncontrol states. For marketers, obtaining
\ndistribution meant persuading each independent state liquor commission to carry their brands.
\nIn all cases, pricing was uniform and dictated by the state, leaving very little room for promoting brands.
\nIn most control states, retail prices were much higher than those in \u201copen\u201d neighbor states, but there were a
\nfew notable exceptions, such as New Hampshire and Pennsylvania. Temporary discounts and displays were
\nallowed but highly regulated (and each state has its own set of rules) and needed to go through a lengthy
\napproval process with the local liquor board. Shelf positioning was not negotiable. Another limitation in
\ncontrol states was the lack of convenience: Many had an insufficient number of stores, often with poor
\nlocations and limited operating hours.
\nOff-premise retailers were divided into food, drug, and liquor stores. Food stores included groceries,
\ndelis, and larger wholesale clubs. Drugstores such as Walgreens comprised the drug category. Liquor stores
\nwere further divided into the independent and control-state-owned liquor stores. Cuvelier estimated that the
\nbreakdown was 35%, 20%, and 45% for food, drug, and liquor stores, respectively. \u201cThe big chains, across all
\ncategories, were harder to penetrate, since they required high margins and heavy marketing support and
\nestablished market share,\u201d he explained. \u201cThese bigger outlets relied on strong consumer pull for top
\nbrands.\u201d
\nFor vodka, independent retailers were responsible for significant volume sales. And they could give the
\nbrand strong and sustained support because they generated higher margins on SVEDKA than high-volume
\nestablished brands while offering a very competitive price. The pricing of SVEDKA, Cuvelier thought, would
\nbe attractive to them\u2014which translated into eye-level shelf positioning, floor displays, and spontaneous
\nretailers\u2019 recommendations. By prominently displaying SVEDKA alongside key competitors, store owners
\ncould give the brand invaluable credibility. And so SVEDKA planned to concentrate sales efforts on these
\nmidmarket retail outlets. In particular, Cuvelier intended to focus on landing the family-owned operations,
\nconsidered midtier stores in terms of traffic and business, and devote very little effort to the chain stores such
\nas large grocery and drug chains that also sold liquor in noncontrol states.
\nThe distribution strategy for SVEDKA required a network of wholesalers and brokers. Cuvelier thought
\nit would be difficult to gain a foothold among large wholesalers in the biggest states, so he looked for what he
\ncalled \u201cchallenger\u201d distributors where he could get more attention and support from management and sales.
\nThese operated primarily in open states. (See Exhibit 5 for retail sales of vodka in the top 25 states by retail
\nsales in 1998.) Robust collateral pieces explaining the benefits of the product, brand, and company were given
\nto all retailers as education materials.
\nCuvelier believed that, given his limited budget, launching SVEDKA in the midmarket off-premise
\nlocations was the most effective strategy. He instructed his sales force to secure distribution in liquor stores
\nonly. But he still harbored doubts about which particular states he should select and the order in which they
\nwould receive SVEDKA shipments.
\nThe Brand
\nThe first association consumers would have with the product was its name. Cuvelier had searched for a
\nword that evoked the vodka\u2019s Swedish heritage. During his many trips to Sweden, the word Svensk
\n(\u201cSwedish\u201d) caught his attention; it appeared everywhere. He combined it with the word \u201cvodka\u201d to come up
\nwith an easier-to-pronounce version: SVEDKA. Although focus groups and the packaging agency didn\u2019t
\nconfirm the wisdom of his choice, Cuvelier stayed with his intuition. (Exhibit 7 shows the SVEDKA bottle
\nwith its original logo, which has since been updated.)
\nThe name was fitting for the product\u2019s positioning. Cuvelier envisioned SVEDKA as a challenger brand,
\nwith a personality like JetBlue in the airline industry or Target in fashion: an inexpensive, chic alternative. It
\nwas a fun option that challenged the status quo in a category that was taking itself too seriously. SVEDKA
\nempowered the consumer with a different choice where there wasn\u2019t much discrepancy among the products
\nin its category. \u201cThe category is locked in sameness,\u201d Cuvelier said. \u201cEach brand relies on a stated marketing
\nrecipe of bottle shot plus product benefit plus cocktail recipe plus historical reference.18
\nThe Campaign
\nCuvelier estimated he had about $350,000 to spend in his first year on marketing SVEDKA (not
\nincluding promotions to wholesalers and retailers, which could include the discount levels, support materials,
\nsales force incentives, and in-store promotions). He allocated this budget among media, point of sale (POS),
\ntrade shows, creative, and sampling.
\nUntil distribution reached key markets, Cuvelier did not use traditional advertising. Generally, brands
\nwere promoted in print (with magazines as the dominant medium), outdoor, broadcast, and electronic media
\nat an increase of 14% over the $256 million spent in 1997.19 (Refer to Exhibit 8 for the total advertising
\nexpenditure in 1997 and 1998.) Cuvelier wanted SVEDKA to achieve distribution, brand awareness, and
\nword of mouth before he launched a national campaign. He was left to reassess the best use of his dollars
\nacross the following marketing methods.
\nTrade press and PR
\nCuvelier viewed trade relationships as the first step in communicating about his brand. There were a
\nsmall but influential group of trade magazines and writers he needed to acquaint with SVEDKA. He bought a
\nfew full-page trade ads and entered SVEDKA in vodka contests to drum up press. He succeeded with the
\nWine Enthusiast 93 rating. Such high marks were in line with the more expensive Grey Goose (which received
\na 94) and Ketel One (93) and higher than the ratings for Stolichnaya (91), Skyy (90), Belvedere (89), and
\nAbsolut (90).20 The favorable results validated the brand in the eyes of the wholesalers. Their excitement
\nabout SVEDKA would determine how quickly it was embraced by the largest, bottom portion, the core
\nconsumer. All media outreach was limited to the trade outlets. SVEDKA used its high-profile reviews to fuel
\nfavorable trade press articles. But additional public relations efforts toward larger publications were not
\nscheduled for the launch.
\nPoint of sale
\nBrand visibility would be at the store level through POS materials. Because of the emphasis on an offpremise distribution strategy, Cuvelier allocated marketing dollars toward enhancing the in-store experience
\n(midtier liquor stores). POS and store signage (shelf, display, and window materials) helped bring the brand to
\nlife at the point of decision making and purchasing. The Wine Enthusiast ranking was displayed on POS pieces
\nto provide the unknown product with credibility.
\nTrade shows
\nSVEDKA planned to sponsor booths at top industry trade shows. Attendees at these shows included
\nwholesalers and retailers, as well as the media and competition. Although trade shows were costly and time-
\nconsuming, Cuvelier believed that having a presence at industry events would develop brand recognition as
\nwell as provide continuing insight into industry trends.
\nCreative
\nThe collateral materials that supported the SVEDKA booth at trade shows, in addition to the POS
\nmaterials and trade press kits, fell under the creative investment line item. Cuvelier wanted all branding
\nelements to have a cohesive look and feel for both internal and external audiences. The same images appeared
\nas limited ads in trade magazines such as Beverage Industry News.
\nSampling
\nAnd finally, when the product was to be introduced in a new store, SVEDKA intended to host sampling
\nevents. SVEDKA wanted to put its own twist on the customer-engagement tactic by designing customized,
\nbranded barware test tubes. Cuvelier was certain that the ROI on these 1,000 to 1,500 sampling events per
\nyear (two to three hours per event with a small staff and collateral materials) was enormous. SVEDKA had
\nonly one shot at the launch campaign, and Cuvelier was confident in his tactics. But he did find himself
\nreexamining his budget in the final days before his product\u2019s debut.<\/p>\n
Exhibit 1
\nSVEDKA Vodka (A)
\nProjections: Vodka versus Total Distilled Spirits
\n(in thousands of 9 L cases)
\nVodka Total Distilled Spirits
\nYear Cases ACGR* Cases ACGR
\n1975 31,898 -.-% 179,731 -.-%
\n1980 36,411 2.7 190,903 1.2
\n1985 35,681 \u20130.4 173,508 \u20131.9
\n1986 34,717 \u20132.7 164,531 \u20135.2
\n1987 33,626 \u20133.1 162,024 \u20131.5
\n1988 34,712 3.2 159,008 \u20131.9
\n1989 35,054 1.0 155,865 \u20132.0
\n1990 35,362 0.9 159,190 2.1
\n1991 33,397 \u20135.6 147,026 \u20137.6
\n1992 32,964 \u20131.3 148,015 0.7
\n1993 32,441 \u20131.6 144,162 \u20132.6
\n1994 31,910 \u20131.6 139,996 \u20132.9
\n1995 32,175 0.8 137,330 \u20131.9
\n1996 33,002 2.6 138,814 1.1
\n1997 32,912 \u20130.3 138,740 \u20130.1
\n1998 34,088 3.6 140,568 1.3
\n1999 project ( help with nursing paper writing from experts with MSN & DNP degrees)ed versus 1998 35,000 2.7 141,905 1.0
\n2003 project ( help with nursing paper writing from experts with MSN & DNP degrees)ed versus 1998 35,500 0.8 143,240 0.4
\n*Annual compound growth rate.
\nData source: Adams Liquor Handbook 1999.
\nExhibit 1 (continued)
\nVodka Sales, 1993 to 1998 (in millions of 9 L cases)
\nStandard Vodka
\nPremium Vodka
\nSource: SVEDKA sales presentation, 2001.
\nExhibit 2
\nSVEDKA Vodka (A)
\nNew Distilled Spirits Introductions by Category, 1996\u201398
\nNumber of Introductions Share of Total
\nCategory 1996 1997 1998 Category 1996 1997 1998
\nU.S. whiskey
\nCanadian
\nScotch
\nIrish
\nTotal whiskey
\n10
\n7
\n39
\n2
\n58
\n14
\n1
\n18
\n2
\n35
\n19
\n5
\n42
\n4
\n70
\nU.S. whiskey
\nCanadian
\nScotch
\nIrish
\nTotal whiskey
\n3.9%
\n2.7
\n15.3
\n0.8
\n22.7%
\n6.1%
\n0.4
\n7.8
\n0.9
\n15.2%
\n5.1%
\n1.3
\n11.3
\n1.1
\n18.9%<\/p>\n
Gin
\nVodka
\nRum
\nTequila
\nBrandy and cognac
\nCordials and liqueurs
\nPrepared cocktails
\nNeutral spirits
\nTotal nonwhiskey
\n11
\n37
\n31
\n19
\n29
\n44
\n26
\n– –
\n197
\n5
\n24
\n26
\n24
\n44
\n50
\n20
\n2
\n195
\n10
\n23
\n27
\n46
\n104
\n72
\n18
\n1
\n301
\nGin
\nVodka
\nRum
\nTequila
\nBrandy and cognac
\nCordials and liqueurs
\nPrepared cocktails
\nNeutral spirits
\nTotal nonwhiskey
\n4.3
\n14.5
\n12.2
\n7.5
\n11.4
\n17.3
\n10.2
\n-.-
\n77.3%
\n2.2
\n10.4
\n11.3
\n10.4
\n19.1
\n21.7
\n8.7
\n0.9
\n84.8%
\n2.7
\n6.2
\n7.3
\n12.4
\n28.0
\n19.4
\n4.9
\n0.3
\n81.1%<\/p>\n
Total 255 230 371 Total 100.0% 100.0% 100.0%<\/p>\n
Data source: Adams Liquor Handbook 1999, 5.
\nExhibit 3
\nSVEDKA Vodka (A)
\nSupplier Vodka Case Prices
\nPrice Ranges Percentage
\nUnder $34.99 16.5
\n$35.00 to $39.99 21.4
\n$40.00 to $49.99 18.8
\n$50.00 to $59.99 22.1
\n$60.00 to $99.99 2.8
\n$100.00 to $119.99 18.3
\nTotal 100.0
\nData source: Adams Liquor Handbook 1999, 135.
\nExhibit 4
\nSVEDKA Vodka (A)
\nConsumers of Distilled Spirits by Category and Age Group
\n(in percent)
\nAge Groups Total
\nCategory 21\u201324 25\u201334 35\u201344 45\u201354 55\u201364 65+ Adults
\nDistilled spirits 62.7 60.6 55.2 53.1 44.4 35.2 51.7
\nBourbon 15.2 13.6 12.8 12.3 12.6 9.5 12.5
\nBlend\/rye 3.7 6.3 6.0 6.6 7.3 5.9 6.2
\nCanadian 6.9 10.0 11.6 11.3 13.3 9.1 10.7
\nScotch 6.7 8.3 9.0 12.9 11.4 8.8 9.7
\nIrish 3.5 3.0 3.7 4.5 3.0 2.3 3.3
\nGin 16.5 15.3 15.0 16.4 13.7 10.4 14.5
\nVodka 30.4 29.6 25.5 24.5 21.8 15.4 24.3
\nRum 34.4 28.2 26.0 23.1 15.8 7.9 22.1
\nTequila 26.7 24.9 20.1 17.9 9.5 5.1 17.2
\nBrandy and cognac 4.1 7.3 8.3 11.0 8.8 7.7 8.2
\nCordials and liqueurs 27.3 21.6 21.6 21.9 19.0 11.6 20.0<\/p>\n
Adult population
\n(in millions) 12.3 38.9 43.1 34.4 22.1 31.9 182.7
\nNote: Includes consumers age 21 and older only.
\nData sources: Simmons Market Research Bureau, Spring 1998 Study of Media and Markets; Adams Liquor Handbook 1999, 291.
\nExhibit 5
\nSVEDKA Vodka (A)
\nRetail Sales for Vodka in Top 25 States, 1998
\n($$ in millions)
\nRank State Sales
\nControl
\nor Open
\nPercent Share of
\nAll Distilled Spirits
\n1 California $738 Open 10.40
\n2 Florida $517 Open 6.50
\n3 New York $468 Open 7.40
\n4 Illinois $341 Open 5.00
\n5 Texas $333 Open 5.80
\n6 New Jersey $317 Open 3.90
\n7 Pennsylvania $307 Control 3.70
\n8 Michigan $296 Control 3.70
\n9 Ohio $221 Control 3.50
\n10 Georgia $203 Open 2.80
\n11 Washington $198 Control 2.50
\n12 Wisconsin $190 Open 2.80
\n13 Connecticut $179 Open 1.90
\n14 Massachusetts $177 Open 3.20
\n15 South Carolina $149 Open 1.70
\n16 Arizona $147 Open 1.80
\n17 North Carolina $146 Control 2.00
\n18 Minnesota $144 Open 2.10
\n19 Maryland $140 Open 2.00
\n20 Colorado $139 Open 1.90
\n21 Virginia $133 Control 2.00
\n22 Indiana $127 Open 1.90
\n23 Tennessee $117 Open 1.40
\n24 Missouri $113 Open 1.80
\n25 Louisiana $102 Open 1.70
\nTop 25 $5,942 84.00
\nBottom 25 $1,280 16.50
\nTotal United States $7,222 21.20
\nControl Open
\nTop 25 6 19
\nTotal United States 18 32
\nTop 25 vodka sales, in millions $1,301 $4,641
\nTop 25 percent share 22 78
\nData source: Adams Liquor Handbook 1999, 34.
\nExhibit 6
\nSVEDKA Vodka (A)
\nMap of Control (Dark) and Open (Light) States
\nData source: \u201cUS States by Alcohol Control,\u201d posted to public domain under Creative Commons (CC BY-SA 3.0) by
\n\u201cDemi,\u201d November 8, 2006, http:\/\/en.wikipedia.org\/wiki\/File:US_States_by_alcohol_control.svg (accessed May 22,
\n2009).
\nExhibit 7
\nSVEDKA Vodka (A)
\nSVEDKA Bottle with Original Logo
\nSource: SVEKDA.
\nExhibit 8
\nSVEDKA Vodka (A)
\nTotal Advertising Expenditures for Vodka, 1997\u201398
\n($$ in thousands)
\n1997 1998
\nBrand Mag. News. Outdoor B\u2019cast Total Mag. News. Outdoor B\u2019cast Total
\nAbsolut
\nSmirnoff
\nFinlandia
\nStolichnaya
\nSkyy
\nBelvedere
\nGrey Goose
\nChopin
\nArgent
\nTaaka
\nGeorgi
\nFleischmann\u2019s
\nVodka
\nGordon\u2019s Vodka
\nStolichnaya
\nCristall
\nRain Vodka
\nIceberg
\nMcCormick
\nVodka
\nTanqueray
\nSterling
\nWyborowa
\nKremlyovskaya
\n$27,013.9
\n12,363.3
\n2,412.2
\n7,662.9
\n3,816.8
\n116.2
\n\u2014
\n60.3
\n\u2014
\n\u2014
\n\u2014
\n\u2014
\n2,471.8
\n\u2014
\n\u2014
\n\u2014
\n\u2014
\n2,007.8
\n\u2014
\n30.9
\n$201.7
\n80.0
\n0.4
\n182.4
\n\u2014
\n\u2014
\n\u2014
\n\u2014
\n\u2014
\n\u2014
\n156.7
\n\u2014
\n\u2014
\n\u2014
\n\u2014
\n35.6
\n\u2014
\n\u2014
\n115.0
\n\u2014
\n$515.7
\n866.3
\n1.8
\n\u2014
\n\u2014
\n\u2014
\n\u2014
\n\u2014
\n\u2014
\n237.0
\n\u2014
\n137.5
\n\u2014
\n\u2014
\n\u2014
\n\u2014
\n107.5
\n299.1
\n\u2014
\n\u2014
\n\u2014
\n\u2014
\n\u2014
\n\u2014
\n\u2014
\n\u2014
\n\u2014
\n\u2014
\n\u2014
\n\u2014
\n\u2014
\n\u2014
\n\u2014
\n\u2014
\n\u2014
\n\u2014
\n\u2014
\n\u2014
\n\u2014
\n\u2014
\n$27,731.3
\n13,309.6
\n2,414.4
\n7,845.3
\n3,816.8
\n116.2
\n\u2014
\n69.3
\n\u2014
\n237.0
\n156.7
\n137.5
\n2,471.8
\n\u2014
\n\u2014
\n35.6
\n107.5
\n2,306.9
\n115.0
\n30.9
\n$27,617.0
\n14,558.1
\n8,156.4
\n6,799.6
\n3,259.7
\n518.1
\n\u2014
\n274.9
\n58.2
\n\u2014
\n\u2014
\n\u2014
\n105.8
\n82.1
\n30.0
\n27.3
\n\u2014
\n\u2014
\n\u2014
\n\u2014
\n$308.2
\n391.3
\n90.2
\n173.0
\n\u2014
\n863.3
\n547.4
\n242.1
\n236.2
\n\u2014
\n177.3
\n\u2014
\n\u2014
\n14.8
\n\u2014
\n\u2014
\n\u2014
\n\u2014
\n\u2014
\n\u2014
\n$1,420.4
\n856.2
\n575.6
\n\u2014
\n224.1
\n\u2014
\n\u2014
\n\u2014
\n\u2014
\n286.1
\n\u2014
\n167.4
\n\u2014
\n\u2014
\n\u2014
\n\u2014
\n7.9
\n\u2014
\n\u2014
\n\u2014
\n$161.9
\n18.2
\n325.9
\n\u2014
\n\u2014
\n\u2014
\n\u2014
\n\u2014
\n\u2014
\n\u2014
\n\u2014
\n\u2014
\n\u2014
\n\u2014
\n\u2014
\n\u2014
\n\u2014
\n\u2014
\n\u2014
\n\u2014
\n$29,507.5
\n15,822.8
\n9,148.1
\n6,972.6
\n3,483.8
\n1,381.4
\n547.4
\n517.0
\n294.4
\n286.1
\n177.3
\n167.4
\n105.8
\n96.9
\n30.0
\n27.3
\n7.9
\n\u2014
\n\u2014
\n\u2014
\nTotal
\nexpenditure $57,965.1 $771.8 $2,164.9 \u2014 $60,901.8 $61,487.2 $3,043.8 $3,537.7 $506.0 $68,574.7
\nData sources: Competitive Media; Adams Liquor Handbook 1999, 136.<\/p>\n","protected":false},"excerpt":{"rendered":"
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