“It’s a new time, a new age, a new era for Scotch consumers in the U.S.,” said Brian Radics, Director of Scotch Whisky, Diageo. “Not every category can say they’re a dynamic category right now but Scotch can say that.”
With products at every price point, from the value-price to a bottle of The Macallan that sold for more than $600,000 at an auction earlier this year, the Scotch whisky category is moving in an upward direction. “There’s this huge premiumization from the very top collectible, rare bottles and that seems to trickle down all the way through premium whisky,” said David King, president of Anchor Distilling.
As the economy improves, so does what consumers drink. “The long trend of people drinking less but drinking better continues and I think single malt whisky in particular is benefiting from that,” King offered.
For a product so steeped in history, Scotch whisky brands realize they can’t rely solely on premiumization for the new generation of drinkers. Rather than skewing male and older in age, the Scotch category crowd is becoming younger and not as gender-specific. “Younger consumers are more adventurous and are starting to incorporate brown spirits into their drinking repertoire,” said Jill Quady, brand manager for Cutty Sark.
Scotch brands are pushing the envelope when it comes to innovation. “Super-premium brands, innovation in particular, has been a huge part of not only Diageo Scotch but the category as a whole,” Radics explained.
Perhaps it’s a result of that innovation that the Scotch category is seeing so much success. That is especially true among single malts. “It’s where most of the action is happening,” King said. “Single malt is incredibly dynamic.” According to the Beverage Information Group, the Scotch category gained 3.5% in 2013. Carrying that growth were single malt Scotches, which were up 9.1%, while foreign bottled brands grew 5.6%.
However, it’s not so much about Scotch’s volume but its value. “One of the key things to pull out in the last year has been the really strong growth of value over just volume, specifically in the single malt segment,” said Andy Nash, Scotch category marketing director for William Grant & Sons.
The Scotch category’s success is about more than case sales and price increases. “It’s not just about the prices increasing,” Radics explains. “It’s that the brands that are at the higher price tiers, those brands that are true craft and have true connections with the retailers and true connections with consumers, those are the brands that people are seeking and those are the brands that are growing.”
Line Extensions
In October 2013, the Diageo single malt Talisker expanded its brand in the U.S. by introducing Talisker Storm. Talisker Storm became a permanent addition to the portfolio and was presented as more intense and smoky to balance the warm sweetness that’s Talisker’s signature trait. And unlike many other single malts, Talisker Storm does not have an age statement.
Before April 2013, Johnnie Walker Double Black wasn’t available stateside. But after a successful re-release of the limited edition, Double Black became a permanent addition to the Johnnie Walker U.S. lineup. “The response to Johnnie Walker Double Black in the U.S. market has been overwhelmingly positive,” Radics said. The innovative blend keeps with Black Label’s character while amplifying and intensifying its flavors.
Revamped Not Recycled
“This has been a huge year for Johnnie Walker,” Radics continued. “We shook up our base portfolio. We’ve essentially said we’re exiting the Green Label and Gold Label 18 Year business, and we’ve introduced a new Platinum Label 18 and a Gold Label Reserve in a limited-edition bottle.”
Platinum was inspired by John Walker & Sons rich history, hearkening back to the Walker family custom of crafting exclusive blends for private gatherings. Available since its August 2013 launch, the Platinum Label has a suggested retail price of $110. “We saw more opportunity to create different propositions than what we had in Green Label and Gold Label 18,” Radics said. “What we created wasn’t the new Green is this and the new Gold is that.”
As if the Platinum launch wasn’t enough, Johnnie Walker followed it up with the October launch of Gold Label Reserve, a product that represents top-notch blending and introduces a new flavor to the Johnnie Walker brand. The limited edition comes in a festive reflective gold bottle that retails for $87. “Gold Label Reserve provides consumers with a unique flavor for high energy celebrations that may not have been traditionally looked at as Scotch whisky occasions,” Radics explained.
Although single malts might be driving the Scotch category’s growth, Johnnie Walker finds itself in a unique position as a blend with super-premium offerings. The Johnnie Walker brand is able to act more like a luxury spirit. “We’re fortunate and unfortunate that I have Johnnie Walker and Buchanan’s as some of my lead blended Scotch and those two brands because they are true brands and have true connections with consumers, they kind of transcend the blended Scotch segment so that’s very positive for us,” he said. Through its innovation, Radics explains that Diageo is able to meet the call for new offerings as new consumers enter the category and the regulars look for new items to check out.
Collection Selection
Glenmorangie’s Private Edition, the brand’s exclusive collection of unique and rare single malts, introduced its fifth release in January. The labels in the Private Edition serve as a testament to the brand’s commitment to innovation and excellence. Glenmorangie Companta, the newest expression, pairs Glenmorangie with renowned French wines as the spirit matures in Grand Cru wine casks from Clos de Tart in Burgundy.
The limited release has a suggested retail price of $99 and joins exclusive company in the award-winning private collection. The fourth release, Ealanta, was named 2014 “World Whisky of the Year’ in Jim Murray’s Whisky Bible, while Sonnalta PX received the honor in 2011. Plus all of the previous releases received gold medals at the International Wine and Spirits Competition over the years.
As one of the single malt Scotch segment’s fastest-growing brands, Glenmorangie’s sales increased 18.8% in 2013, topping 100,000 cases for the first time.
In February, Highland Park Single Malt Scotch introduced its third release of its Norse-inspired Valhalla Collection. First came Thor, the warrior. Then came Loki, the trickster, in last year’s release. Now it’s Freya, the 15-year-old single malt from Orkney that’s named after the Norse goddess of love. Packaged in the same eye-catching wooden frame as Thor and Loki, the limited edition Freya is bottled at 51.2% ABV carries ultra-premium pricing.
First making a name for itself as a leading marketer of luxury wines, Terlato Wines announced last August that it would be venturing into the luxury spirits arena with craft offerings. Less than a year ago, the Artisan Spirits portfolio launched with a gin and vodka, and it recently added Adelphi Distillery Limited’s rare single-malt, single-cask Scotch whiskies. From the Scottish Highlands, Adelphi has amassed an exclusive collection of super-premium whiskies from some of Scotland’s most respected distilleries. Terlato will release the Adelphi Selection expressions in limited quantities four times per year. The inaugural run will feature Highland Park, aged 14 years and retailing for $170; a 21-year-old Bunnahabhain with a suggested retail price of $220; a 23-year-old Glen Grant with a suggested retail price of $285; and a Bennriach aged 32 years and retailing for $475.
Innovative Introductions
A company that was at the forefront of the double-barrel ageing process, the Dewar’s distillery has a history of raising the Scotch industry’s standards. It proved its innovation once again with the April 2013 launch of Dewar’s Highlander Honey, a product that infuses Dewar’s White Label blended Scotch with hand-selected Scottish honey and natural flavors.
Highlander Honey is just the first offering for a new product range from House of Dewar’s that will showcase traditional and indigenous Scottish ingredients. The Highlander’s range unique expressions will infuse Dewar’s Blended Scotch whisky with natural flavors, the company says.
Up until Edrington purchased Cutty Sark in 2010, the brand was seeing a slow and steady decline in the U.S. “Since the acquisition, it’s been an exciting time as we seek to reinvigorate the brand, highlight its distinctive personality and taste profile to a new generation of Scotch fans,” brand manager Quady said.
To do so, they have two releases leading the charge. At the end of 2013, Cutty Sark unveiled a new edition that recognizes the brand’s start during Prohibition. With a nationwide rollout in 2014, Cutty Sark Prohibition Edition pays homage to the spirits styles consumed in the 1920s as well as the whisky packaging prevalent during the era with its cork seal and black opaque bottle. Cutty Sark Prohibition Edition is bottled at 50% ABV and retails for $29.99.
The other release is Cutty Sark’s Tam O’Shanter Blended Scotch Whisky, a limited-edition expression. “It is a new variant of the award-winning Cutty Sark 25-Year-Old, but with a distinctly darker, wilder side and a full-bodied, boisterous and sweet flavor,” Quady explained.
Jim Beam expects to debut a couple of new releases from Laphroaig beginning this summer. Laphroaig’s annual bottling of Cairdeas will be introduced at the Islay whisky festival, while late summer/early fall will bring the latest Cask Strength expression. Laphroaig continues to benefit from the ongoing interest in peated malt and the strong growth seen in within the single malt segment.
William Grant & Sons’ Glenfiddich saw double-digit grow with a 11.9% increase in U.S. sales. “Innovation in a traditional category is a tricky thing,” Nash said. But the company does it anyway, most recently with some limited-edition launches.
Glenfiddich launched the Age of Discovery Bourbon Cask Reserve, a product aged 19 years in American oak casks once used to age bourbon. The 40% ABV whisky has a suggested retail price of $149.99. Glenfiddich also released Cask of Dreams, the exclusive product—only 6,660 bottles priced at $99 were available—that came from a 2012 campaign that encouraged Americans to share their life goals with a chance of turning them into reality. While entries were written on the cask, the winners were featured on the bottle’s packaging.
The company’s other key single malt, The Balvenie, topped that with its own 12.7% increase. “It was a very strong year for The Balvenie last year,” Nash said. In October 2013, The Balvenie introduced a limited supply of Tun 1401, Batch 9, a follow-up to the successful U.S. launches of “Batch 3” and “Batch 6.” This rare batch included spirits sourced from 11 traditional whisky casks and three sherry butts all of varying ages, and all specially selected by Malt Master David Stewart. Hand-bottled at The Balvenie Distillery in Speyside with a 49.3% ABV, The Balvenie Tun 1401, Batch 9’s suggested retail price is $250.
Moving forward, William Grant & Sons expects more limited editions in the year ahead. “We find, certainly on Glenfiddich, the limited editions create a tremendous amount of buzz from the trade and a tremendous amount of interest from consumers,” Nash said.
Smaller Standbys
“One of the things we have are not really leaders but interesting alternatives,” King explained of Anchor Distilling’s Scotch whisky portfolio.
To kick off 2014, The BenRiach, a Speyside distillery built in 1898, introduced four new expressions to the U.S. market. The BenRiach Horizons 12 Year Old Triple Distilled is distilled three times before being aged 12 years; the 100-proof expression retails for $79.99. The BenRiach Solstice 2nd Edition 17 Year Old marries peat and fruit through its distilling process; the 100-proof follow up to the first edition retails for $99.99. The BenRiach Septendecim 17 Year Old Peated Single Malt has been described as a bold, intense expression and the latest in the peated range; it retails for $79.99 and is bottled at 46% ABV. The BenRiach Authenticus 25 Year Old Peated Single Malt exemplifies the full-bodied style and completes the label’s peated range; also at 46% ABV, it has a suggested retail price of $249.99.
Brought to the U.S. market by Anchor Distilling, The GlenDronach Distillery, which is located in Scotland’s Highland hills, launched two new products to start off 2014. The GlenDronach 15 Year Old Tawny Port Wood Finish is matured in European oak before being finished in a small batch of Tawny Port barrels. The 46% ABV bottles have a suggested retail price of $79.99. The GlenDronach Cask Strength Batch 2 matures in Pedro Ximenez and Oloroso sherry casks, creating a flavor explosion balanced with sherry character. The expression has a 50-60% ABV and the suggested retail price for the 750ml bottle is $149.99.
More Than a Name
Ron Burgundy, the character Will Ferrell made famous in Anchorman and now the sequel which hit theaters in December 2013, has created quite the brand buzz. In anticipation of Anchorman 2: The Legend Continues, Ben & Jerry’s released its Burgundy-inspired ice cream flavor, Scotchy Scotch Scotch. Chryster nabbed the character for advertising. And before the rollout was officially announced, Ron Burgundy Blended Scotch Whisky by Riviera Imports had already gone viral. “While the publicity has been incredible, what shouldn’t be lost is that we have a very high-quality product,” said Ed Caan, CEO of Riviera Imports. “This is a case where it’s not just what’s on the bottle, but what’s in the bottle.”
With a 75-year-old craftsman distilling process, Old St. Andrews Distillery crafted Ron Burgundy Blended Scotch Whisky from a blend of grain and malt whiskies from Speyside, Highlands and Islay. Selling for $25 a bottle, the expression rolled out with 72,000 bottles initially and is moving toward national distribution.
Unique Partnerships
Known for having a super premium portfolio across spirits, Rémy Cointreau USA added Bruichladdich, an Islay single malt Scotch whisky, to its portfolio. Although Rémy Cointreau USA purchased the brand and its assets in September 2012, it only began importing, distributing and marketing Bruichladdich at the start of this year.
Glenmorangie introduced its Cask Masters program in 2013 as a way for consumers to get involved in the whisky-making process. The 18-month program allowed whisky fans to choose the name of the new single malt and inspire its packaging by uploading pictures and ideas to an online gallery. The limited-edition whisky will be released in fall 2014.
Chivas Regal continues to focus on its Brotherhood program, recently partnering with Mana, the world’s biggest Latin rock band, as its latest Brotherhood members. The program gives Chivas whisky drinkers an insider’s look at the band as well as the opportunity to win some exclusive prizes.
“The Dalmore has been one of the fastest-growing brands globally in the last three years,” said Chris Watt, the marketing director of premium brands for Whyte and Mackay Americas. In its latest release, The Dalmore partnered with Chef Daniel Boulud to create a single malt Scotch whisky. The Dalmore Selected by Daniel Boulud combines aged stocks from Muscatel, Madeira and Port wine casks, assembling an expression that’s a complement to Boulud’s cuisine and a nod to his background. With only 1,000 bottles of this 44% ABV limited release, it retails for $200.
“We’re constantly looking to innovate at the luxury end of the category,” Watt said. The latest: The Dalmore 25 Year-Old just hit the U.S. market. “With an RSP of $1,000, this bottling will be extremely limited, with only 190 bottles being released in the U.S.,” he said.
Extra Rare
Glenmorangie announced in October that it had uncovered a wood-finished whisky distilled in 1963 and bottled in 1987. Deemed the “world’s first” of this type of finish, only 50 bottles of the extraordinarily rare expression were discovered, and the brand wanted to make those available to its most loyal followers, though only 20 would be available to purchase in the U.S.
With a luxury retail price of $2,600, Glenmorangie 1963 offers a blast from the past down to its bottle and box details. The commemorative bottle that includes the original label befits its 1960s heritage while going all-out in the luxury department. The labels, collar and cork are made of .925 solid silver, and a unique number is engraved on each bottle.
Adding to its whisky portfolio in 2014, Diageo announced the launch of John Walker & Sons Odyssey, the first triple-malt Scotch whisky from the House of Walker (Monkey Shoulder married three Speyside single malts to create the first triple-malt Scotch). “A lot of consumers are looking for real quality and true craft and a lot of heritage and that’s something Diageo’s portfolio hits in a huge way,” Radics said. Developed using Sir Alexander Walker’s notes, Odyssey blends three rare, handpicked single malts into a single product that retails for $1,100.
Bold Bottles
Pernod Ricard’s Ballantine’s, the blended Scotch whisky that’s No. 1 in Europe and No. 2 in the world, unveiled new packaging accenting a more contemporary look for its Finest expression last July. “The Ballantine’s Finest bottle has changed very little over the years, but we recognized a need for the look to be updated, given Ballantine’s credentials as a famous brand that leaves an impression,” said Peter Moore, Ballantine’s Global Brand Director. The bottle redesign coincides with a new marketing campaign for the brand titled, “Stay True, Leave an Impression.”
Ballantine’s wasn’t the only one of Pernod Ricard USA’s brands to see a new package design. Chivas released a limited edition gift tin for its Chivas 12 blend that has a suggested retail price of $35.99. The Chivas 12 Made for Gentlemen by Patrick Grant was design in part by Grant, who is an icon in menswear design and responsible for reinventing a well-known London tailor. The limited edition tin contains a bottle of Chivas 12 and features four tailored looks with four different accessories that speak to men worldwide.
Retail Rundown
“Scotch consumers are willing to pay for quality and seek selection, discovery and niche offerings,” Watt said. “Limited editions, cask strength bottlings and a good selection of core brands are worth having on shelf.”
The secret is educating consumers on the products. “Our whole proposition, our selling proposition and our marketing proposition, is around education,” King explained. Experiential marketing focuses on tastings where multiple products are sampled and compared. “Conducting tastings is the perfect way to get consumers to try the liquid,” Quady said. “It also presents the opportunity to highlight the versatility of a brand.”
While a brand’s goal might be to educate people about what goes into the Scotch, the brand can’t be at every retail location across the country. “The brand can do so much, but if you educate the gatekeeper, whether that’s a bartender in the on-premise or a store owner or the store manager, you enable them to mentor their own shoppers,” Radics explained.
The goal is to help consumers making informed choices at the retail level. “One of the best experiences you can have is walking into a store and dealing with knowledgeable staff,” Nash said. That involves training people on the various categories and what goes into them. And when the retailers can’t do the talking, a brand’s shelf talker can help with that education.
