Absolutly boring and under siege by premium vodka makers
Absolut is facing problems as its brand and vodka lose favor with younger drinkers and the hip bars and hotels that made it successful in the first place. While this is natural as smaller, more nimble and hip companies take Absolut's own receipe for success and carve out niche markets (such as Finlandia becoming the vodka of choice in the latest James Bond flick), I think its TBWA/Chiat/Day advertising campaign is pretty darn dated and boring at this point no matter how relevant they may make each new ad to current pop culture. And according to this Wall Street Journal story (subscription required) its joint distribution venture with the distributor of Jim Beam doesn't help it portray a more exclusive image either.
Absolut, one of the most profitable spirit brands in the world, nearly reinvented liquor advertising with its witty campaigns featuring such items as watch works, cheese, baseball bats, yellow cabs and an electronic organizer in the shape of an Absolut bottle. When the campaign started in 1980, Absolut had only 0.1% of the U.S. vodka market and the U.S. imported only about 740,000 cases of vodka a year, according to Impact Databank. By last year, Absolut's market share was 11.7%, and the imported vodka market had risen to about 39 million cases, a record.
But at a time when vodka is the hottest category in the spirits business, Absolut's market share is declining. Its 11.7% share is down, for the first time, from a high of 12.2% in 2000.
The company, owned by Sweden's V&S Vin & Sprit AB, finds itself chasing chic super-premium imports that are leveraging two of Absolut's marketing staples -- elegant bottles and savvy advertising -- into more space on the bar shelf. Grey Goose's market share doubled last year to 1.5% from 0.7%, while the market share of Poland's Belvedere jumped to 0.8% from 0.4%. Both are priced north of $25 for a 750 milliliter bottle, compared with less than $18 for Absolut.