From beer to whiskey, craft distilleries have been seriously capitalizing on millennial consumers and their desire for unique spirits that boast that cool hipster DIY feel. According to a recent release from the Aristocrat Group Corp. (ASCC), millennials represent the largest growing segment of the spirits market, which means big brands are now competing for their attention. As a result, the alcoholic beverage world has become increasingly more craft-focused, with small-batch distilleries rising to the top. While most of the craft options make sense, one of the newest spirits to join the club is vodka. The spirits’ inclusion has worked to shine a spotlight on the craft industry as a whole, and not necessarily in a positive way.
Not exactly known for having a nuanced flavor profile, vodka is primarily used in mixed drinks (unless you’re in Eastern Europe where it’s basically synonymous with water). Unlike other spirits with a set base, this one can be made by using a variety of ingredients, including potatoes, corn and beets. Though the drink may have slight notes of its ingredients after being distilled several times (and filtered through charcoal), it isn’t vodka unless it is nearly tasteless—which is why the idea of craft vodka may sound silly to some.
Photo Credit: Tito's Handmade Vodka
A craft spirit is actually tricky to define, since each company naturally wants it to describe their own product. It is generally accepted that to be considered a craft spirit, the brand has to be run by a small group of people and not a giant corporation. Additionally, the Small Distillers Affiliate Program run by The Distilled Spirits Council of the United States (DISCUS) says that to be labeled craft, a company can’t deliver more than 40,000 cases a year. But with massive names like Diageo using the term, the classification doesn’t quite mean what it used to and makes consumers wary.
Just because a bottle says it is craft doesn’t mean you’re getting a genuinely small-batch product. Tito’s Handmade Vodka proudly states that their product is "crafted in an old-fashioned pot-still by America's original microdistillery” and while that sounds great, it may be misleading. According to Slate, the description is more fitting for how the company used to be when it was still small, before it won the double gold medal for best vodka at the 2001 San Francisco World Spirits Competition (beating big-timers like Belvedere and Grey Goose). Afterwards, in 2013, Forbes reported that Tito’s had “exploded from a 16-gallon pot still in 1997 to a 26-acre operation that produced 850,000 cases last year, up 46 percent from 2011, pulling in an estimated $85 million in revenue.” Though the fifth-generation company has craft roots, its popularity and revenue negates its history, therefore threatening its future.
Just because a company is smaller doesn’t necessarily mean that its products will taste better (if you know someone who tries to brew their own beer, you get it), but it does make a brand more appealing to millennials. Which is why large companies have been trying to get in on the action. Diageo’s Smirnoff and Pernod Ricard’s Absolut are two examples of big names who have been remodeling their portfolios to attract a younger clientele. In order to do that, these businesses have to be more local and less international. According to Bloomberg, that may be alright for Absolut (which is made on one estate in Sweden), but is a bit tougher for Smirnoff, as it has little to do with Russia and is actually distilled in in the U.S., U.K., India, Africa, Latin America and Australia. No matter how much money (Smirnoff launched a $50 million initiative to target millennials last year) and effort these global brands put into offering craft-style products, young drinkers may never accept them on pure principle.
The opposing nature of big brands and small-batch companies is where the problem with craft arises, at least from a business standpoint. How does a company maintain its cool cat reputation as small-batch after it explodes in popularity and essentially becomes the type of company it originally sat opposite of? As is the case with Tito’s, once you find yourself making millions, millennials just might drop you quicker than they picked you up.