business news in context, analysis with attitude

by Kevin Coupe

The Wall Street Journal reports that Diageo, owner of the Ketel One vodka brand, is going to address declining sales in the US by introducing a new vodka that isn’t technically vodka.

According to the story, at 30% alcohol by volume, “the new drink doesn’t meet the definition of vodka under U.S. and European regulations, which mandate that neutral distilled spirits must be bottled at 40% alcohol by volume and flavored ones at 37.5%. Instead, Diageo will market the new Ketel One as ‘made with vodka’.”

The Journal writes that “Ketel One and other big vodka brands have been losing market share to Fifth Generation Inc.-owned Tito’s Handmade vodka, which is made from corn and is advertised as gluten-free … In its previous attempts to bolster its vodka brands, Diageo has sponsored music festivals, marketed to the U.S.’s gay and lesbian community and experimented with flavors. In 2016 it began selling Smirnoff infused with real fruit. More recently, the London-based company has cut prices on Ketel One to try to compete with Tito’s.”

The new item is called Ketel One Botanical. “A 1.5 oz. shot of Ketel One Botanical will have 73 calories, 40% less than in a 5 oz. glass of white wine and 25% less than in a shot of regular Ketel One.” It is, the story says, “the first time Diageo has sold a low-alcohol version of the vodka brand. It comes as many consumers, and especially millennials, are cutting back on alcohol, both by having fewer servings at a time and switching to weaker drinks.”

A few thoughts here.

The story reminds me of the time I was in a bar and ordered a margarita - rocks, salt - and the bartender asked if I wanted a regular margarita or a Skinny Girl margarita. I looked at her and said, “Do I look like a person who would drink a Skinny Girl margarita?”

Of course, it occurred to me later that maybe she thought I looked like the kind of person who should drink a Skinny Girl margarita. So, point taken.

I also worry that some folks will think that they can drink more of this before getting behind the wheel of a car.

Finally, I may be wrong about this, but there is something about the Ketel One Botanical that somehow feels inauthentic.

That’s what Tito’s has going for it - it feels entirely authentic, with a brand identity that has been baked in from the beginning. That’s hard to compete with, and I’m not sure that this new competitor will find it easy to develop any buzz.
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