The strategy to grow ABSOLUT VODKA outside the US has produced results. The markets outside the US are now responsible for nearly half the sales volume. Sales to non-American markets increased with 18 percent in 2005. In Western Europe, countries such as Spain, Germany and Great Britain played an important role, while Poland and Russia are responsible for a major portion of the growth in Eastern and Central Europe. China continues to show large growth and holds its position as the largest market in Asia for ABSOLUT VODKA. Mexico is the single market where ABSOLUT VODKA is growing most, with a percentage increase of 67 percent this year.
In the US, the largest market for ABSOLUT VODKA, sales increased with 2.4 percent to just under 43 million liters, or 3.3 percent including American Duty-Free, which is the equivalent of approximately 46 million liters.
Profit improved dramatically for V&S Absolut Spirits in 2005 with 13 percent to MSEK 1,757.
Turnover increased with 8 percent to MSEK 5,402. The V&S Absolut Spirits business area produces and markets seven international brands: ABSOLUT VODKA, ABSOLUT CUT, Level Vodka, Cruzan Rum, DANZKA Vodka, FRÏS Vodka, and Plymouth Gin. Cruzan Rum was added to V&S Absolut Spirits' international portfolio when V&S Group acquired the majority of shares in Cruzan International Inc on September 30.
"ABSOLUT VODKA is growing with a full 9 percent in 2005, which is the strongest growth in the 2000s. The business area is also delivering dramatically improved profit and strengthened margins. Our strategy to grow outside the US has paid off. We see a very positive development in several markets outside the US. In some Western European and Asian markets, the growth is even two-digit. In spite of the tough competition in the US, we're selling more vodka there than ever before," says Ketil Eriksen, President for the V&S Absolut Spirits business area.
The new flavor, ABSOLUT APEACH, which was launched in the US and Sweden, among other markets, has been very well received. Within a short time it has become the third largest ABSOLUT VODKA flavor in the US and contributed to the increased volumes. In 2006 the peach-flavored vodka will be launched on additional markets.
V&S Absolut Spirits will increase its high pace of product development in 2006. At this time too, both the sales organization in the US and the American subsidiary will also be reinforced. In mid-January a new advertising campaign for ABSOLUT VODKA, "The Absolute Campaign," was launched in the US. January also saw the announcement of a collaboration with the world-famous musician Lenny Kravitz, confirming ABSOLUT VODKA as a creative brand.
V&S Absolut Spirits, a business area within V&S Group, produces and markets the following brands: ABSOLUT VODKA, ABSOLUT CUT, Level Vodka, Cruzan Rum, DANZKA Vodka, FRÏS Vodka and Plymouth Gin. ABSOLUT VODKA is the third largest international spirit in the world and is available in 126 markets. The head office is in Stockholm.