U.S. vodka shakes up competition

Minnesota cooperative stirs up profits with award-winning upscale beverage

? Upscale vodkas like Absolut and Skyy are getting some competition from an unexpected corner of the world, the western Minnesota prairie.

Shakers Original American Vodka, made from homegrown wheat and distilled by a farmer-owned cooperative, was introduced in late February in Benson, Minn. In the first month, Minnesotans bought up 500 cases of Shakers, as much as its creators expected to sell in the first year. Within months, it was the top seller in the state among vodkas priced over $30.

“We just had no idea the level of pride that people in Minnesota would take in this product,” said Tim Clarke, a co-founder of Infinite Spirits, the Napa, Calif., company behind the vodka.

Clarke knows, though, that succeeding in Minnesota won’t be enough for Shakers to make a ripple in a market crowded by European competitors and offer more than a nice bump for the Minnesota cooperative.

U.S. consumers spent about $9.5 billion on vodka last year, including about $950 million for ultrapremium vodkas, according to annual research by Impact Databank. France’s Grey Goose claimed about 61 percent of the ultrapremium market with $570 million in sales.

Shakers projects no more than $40 million in sales this year.

The company’s marketing was concentrated in Minnesota until recently, but the vodka is slowly being introduced elsewhere. It’s now available in 14 states, with a goal of nationwide distribution next year.

Infinite Spirits is advertising Shakers as the only ultrapremium vodka made in the United States by working directly with farmers who grow the grain.

“We think that’s very important because … ultimately the bulk of what’s going to determine your vodka is in the beginning stages,” Clarke said.

Master distiller Pat Couteaux, left, and Pat McGeary, manager of Chippewa Valley Ethanol Co., talk in the distillery that makes Shakers Original American Vodka in Benson, Minn. The ultrapremium American vodka is made from homegrown wheat at the cooperative distillery owned by 900 farmer-members. They were working in the distillery Sept. 23.

Gary Hemphill, head of New York-based Beverage Marketing Corp., said Shakers won’t be seen as a challenge to larger ultrapremiums until it has broader distribution. But the company has entered the right segment of the industry, he said.

“We’re seeing growth in the super-premium end of spirits and in particular we’re seeing growth in the super-premium white spirits,” Hemphill said.

The product’s quality has been praised. Shakers won a silver medal at the 2003 San Francisco World Spirits Competition and received top five-star ratings from Kevin Kosar’s

AlcoholReviews.com and F. Paul Pacult’s Spirit Journal, publications that rate distilled spirits.

For Chippewa Valley Ethanol Co., the Minnesota cooperative that produces the vodka for Infinite Spirits through a subsidiary, Shakers is a tiny fraction of its business. Most of its 45-million-gallon annual capacity is devoted to producing fuel-grade alcohol from corn, and Infinite Spirits plans to produce at the most only a few hundred thousand gallons of vodka this year.

But production can be changed fairly easily if demand for Shakers grows, said general manager Bill Lee.

Master distiller Pat Couteaux makes a final sensory test of a batch of Shakers Original American Vodka in Benson, Minn., where the vodka is made. He tested the vodka Sept. 23.