Stoli targets health-conscious drinkers with gluten-free vodka

LONDON – A growing interest in gluten-free diets among health-conscious Americans has prompted the Russian maker of Stolichnaya vodka to add another drink to its menu.

The long-established Russian brand is introducing Stoli Gluten Free in April, made from 88 percent corn and 12 percent buckwheat.

In a hyper-competitive U.S. vodka market where barriers to entry are low and new launches are commonplace, it will still be the first large, established and international brand that will label itself as gluten-free, trying to appeal to the growing demand for foods free of the sometimes hard-to-digest protein found in wheat, rye and barley.

"The reality today is that gluten-free is a lifestyle that more and more consumers are engaging in," said Stoli Group USA Chief Executive Patrick Piana.

He said one in five consumers were looking to include more gluten-free options into their diet and that over 26 percent of people buying gluten-free foods do so not because of the autoimmune disorder Celiac disease, in which gluten damages the small intestine, but because they feel better doing it.

"That could be a significant category in the future," Piana said.

Many vodkas are made from wheat, but the gluten protein should not survive the distillation process, meaning that vodka generally lacks gluten. Yet to be absolutely sure, and to label as such, Piana said gluten-free ingredients must be used.

Diageo's higher-end Ciroc vodka, for example, is made from grapes, while Chopin Vodka makes a potato variety, but neither of them explicitly market themselves as gluten-free.

Gluten gives elasticity to dough, helps it rise and keep its shape and often gives bread its chewy texture. In addition to the more than 3 million people in the United States that have Celiac disease, a growing number of people report gluten sensitivities or embrace a gluten-free diet for overall health.

When it comes to spirits, gluten-free is still a niche but demand for gluten-free foods has reached $3.3 billion worldwide last year, according to Euromonitor International. Of that, $889 million was in the United States, where the market has seen compound annual growth of 21 percent since 2010.

The Stolichnaya brand's sales rose 5 percent in 2015, Piana said, declining to disclose annual revenue because the company is private. That compares to the vodka market that grew 1.8 percent to 68.2 million 9-litre cases, according to the Distilled Spirits Council of the United States.

Vodka is the largest segment of the U.S. spirits market, accounting for about 32 percent of all volumes sold, but its sales have suffered from heightened competition.

Over the last decade vodka saw a proliferation of flavored varieties that fueled growth for many years until tastes changed. Now, many American drinkers are favoring darker spirits like whiskey and rum, and flavored vodkas have slowed dramatically.

Stolichnaya has a range of flavors including white pomegranate and chocolate coconut, but is focusing in the U.S. on its "core" flavors, Piana said, which include vanilla, blueberry, orange and raspberry.

The brand is owned by Luxembourg-based SPI Group, which is owned by Russian billionaire Yuri Shefler.

(Reporting by Martinne Geller in London, editing by David Evans)