The launch and failure of Sundsvall Vodka illustrate the difficulties of competing in the U.S. super-premium vodka segment. The product was launched by Seagram in 1997 to fight against the new premium brands that were cutting into sales of its Absolut brand.

Sundsvall was named after a town in northern Sweden where it was distilled in partnership with Absolut Vodka, because the company hoped that drinkers would identify with a folksy-sounding town connected to the vodka’s origins. To ensure a separate identity for Sundsvall, Absolut Vodka took the brand’s advertising account to Boston-based Arnold Communications, bypassing Absolut’s long-time agency, TBWA Chiat/Day, and made no reference to Absolut anywhere in its marketing materials.

Sundsvall was positioned as a two-grain vodka with a two-tiered distillation process, coming from “a country with centuries of vodka-making experience.” The vodka was launched with a series of VIP tastings. While other super-premiums were rolled out nationwide, the strategy for Sundsvall was to target eight trendsetting cities: Atlanta, Boston, Chicago, Detroit, Los Angeles, Miami, New York and San Francisco. The brand hosted dinners in the cities’ restaurants known for their “upscale trendsetting” clientele from the worlds of art, philanthropy, business and government. Additionally, Seagram sent bottles of Sundsvall, along with a sipping glass, to 125 consumers in each of the eight markets.

Sundsvall made its debut in bars and restaurants in the Fall of 1998. The vodka was deemed quite good by many bartenders, but the bottle – a clear barrel with an orange shrink-wrapped top – was viewed by servers and distributors as too plain and “too discrete where it was competing.” The brand was often behind its rivals in terms of getting the attention of media and opinion leaders. Moreover, Seagram failed to implement a comprehensive bartender education plan. Unable to leverage the Absolut connection, many Seagram sales reps found it difficult to promote the brand, as many retailers had never heard of Sundsvall. Because “in the U.S. you get one chance to succeed, not two”, Sundsvall was pulled from the market in December 2000.