Dive Brief:
- Hangar 1, a California vodka distillery, is using San Francisco fog to create one of its artisanal spirits. According to MarketWatch, the company uses "fog-catching netting technology" to acquire the mist, which is then turned into fresh water, mixed with Napa Valley wine and distilled into vodka.
- Since the company only makes 5,000 bottles of its Fog Point vodka, the price — at $134 per bottle — is about three to four times higher than its other vodka brands, MarketWatch reported. A 2016 batch sold out in one week.
- Beyond the product's unique factor, MarketWatch reported that Hangar 1 is trying to emphasize the water-conservation elements of fog-catching, which has been used to combat drought in different parts of the world.
Dive Insight:
While the production method sounds a bit like a gimmick, Hangar 1 seems to be serious about making an interesting — albeit expensive — vodka that consumers will relish for its limited-edition appeal and quality. The company says all profits from Fog Point go to water conservancy in California, so it's tapping into consumer demand for mission-based sustainability claims as well.
Mesh fog-collectors made by Canadian company called FogQuest collect the fog in the Bay Area, which is then vaporized, and the vapor collected and converted back to a liquid. Vodka contains 60% water anyway, head distiller Caley Shoemaker explained on the company's website, and the fog gives the beverages salinity and minerality, attributes that could lure adventurous spirit drinkers.
Hangar 1 makes several other premium vodka varieties, including infused products, but this "Fog to Bottle" method punches up the experience factor. Spirits consumers are looking for upscale versions of their favorite beverages, which have been driving increasing sales of premium tequila, gin and bourbon.
Millennial interest in vintage cocktails and premium sipping liquors is also boosting retail sales of whiskey, tequila, bourbon and gin. A 2016 survey found that these shoppers are more interested in drinking alcohol than baby boomers or Gen Xers and enjoy experimenting more with different brands and types of alcohol. The trend has worked to the advantage of Bacardi, Constellation Brands, Brown-Forman and other companies as they acquire premium labels and launch more of their own in the segment.
Within the competitive alcohol industry, positioning and differentiation is crucial to success, so companies are always looking for new value adds that will appeal to adventurous drinkers. In the beer segment, Lagunitas debuted a cannabis-infused product last year, and CERIA Beverages is planning to introduce a line of cannabis-infused, nonalcoholic craft beverages. In the beer and wine space, beer is being aged on bourbon barrel staves and red wine blends are also being aged that way.
Whether these marketing approaches will have staying power or are just a flash in a glass is hard to tell at this point. Products need to back up their advertising claims with high quality and a price point the average consumer is willing to pay. While $134 per bottle isn't likely to fit that category, Fog Point vodka is also a limited-edition item and probably not something that would be used as a base for cocktails on a daily basis. It may, however, draw consumers to try out the company's lower-cost vodka products, which could be a savvy strategy.