Not on the Rocks

Category focus

In Scotland these days, whisky makers sure have a lot to smile about when they think of the U.S. scotch not on the rocks

By Jack Robertiello

es, the Scots’ standard bearer, “Blended whisky is a difficult category, since consumers in the 1980s and 1990s grew enamored of vodka,” says Gerry blended whisky, has continued to Ruvo, CEO of Skyy Spirits, importer of Cutty Sark and four under-perform during a decade of single malts. “The rite of passage was always Scotch – Cutty, J&B and Dewar’s–and then all of a sudden it was Absolut.” exceptional spirits growth. And Larry Neuringer, brand director of Chivas Regal and yes, most popularly priced brands Ballantine at Pernod Ricard also sees the challenges facing blended whisky. “The overall large blended whisky category have continued to lose share, has been negatively impacted by years and years of poor recruitment efforts,” he says. Neuringer points out that brands showing few signs of life. But, hints of a Y investing in new customers reap dividends. stronger, more lucrative business continue Scotch marketers agree. Premium, super-premium and ultra-premiums, blended and single malt, are growing to emerge, as both established and new cus- internationally at a healthy rate, and the U.S. market has fueled tomers show a willingness to spend more that growth. Value brands will continue to sink, but consumers have wholeheartedly accepted pricey brand extensions, making for higher quality products. a whole new target market within reach. Johnnie Walker Black, which surged past less expensive Johnnie Walker Red a few years ago to become the second largest selling blend here, is a prime Premium, super- premium and example. “We have been very consistent ultra-premium, blended and single malt, in our approach of activities to support the strength of the Johnnie Walker trademark are growing internationally at a healthy and to contemporize the brand, making it relevant to today’s consumer,” says Bill Topf, rate, and the u.s. Market has fueled that vice president of the Johnnie Walker brands growth. Value brands will continue to for Diageo. Topf believes focusing on the “Keep Walking” campaign has helped to sink, but consumers have wholeheartedly identify Johnnie Walker as more than just a accepted pricey brand extensions Scotch brand. Johnnie Walker Black benefits as ultra– making a whole new target market premium Johnnie Walker Blue (made from within reach. very rare malts), Johnnie Walker Gold (made from malts at least 18 years old) and pure malt Johnnie Walker Green make an impact, enhancing brand image, in the past few years. “When you extend a invest $250 million in Dewar’s production, giving loyal customers another choice brand you want it from a brand management creating new supply facilities, warehouses and providing a path into Scotch for new standpoint to grow your business and cast and bottling lines in Scotland. consumers, notes Topf. a bigger quality halo on your brand,” says Leveraging brand extensions is the way Another blended whisky that is relative- Fannie Young, Dewar’s brand director. While to growth for Chivas Regal, says Neuringer. ly new to the scene but has already gained the two blends have experienced respectable Marketers will concentrate on personal a loyal following, is McIvor Finest Scotch growth, they haven’t created anything like contact with consumers on-premise through Whisky from BerNiko LLC. “The last four the Walker impact–yet. “Young consumers Chivas 18 Year Old, which he believes has years have seen amazing growth for McIvor,” are all about luxury brands and that’s where received insufficient support although it grew says Alberto Beraha, Berniko’s vice president. our higher marques are positioned, so we 21% over the last 12 months. “At $60-$70 a “What makes us unique is our blend. Only need to do that harder,” she says. bottle, that’s astonishing, given recessionary the finest whiskies are selected, and that has White Label’s performance is already pressures. Now we’re going to push it hard been our key to success. With our customers impressive; at just under 1.4 million cases, on-premise. Brands are built on-premise but and the end consumer sure that McIvor has it towers above other brands, already up not overnight; it takes some discipline and the best quality in the lower tier whisky cat- 4.3% year to date through July, says Young. some perserverance,” explains Neuringer. egory, it was the perfect time to add the new This has encouraged brand owner Bacardi to lines.” The McIvor 12 Year Old and McIvor 17 Year Old, which features Highland whis- kies blended at the time of distillation, are launching nationwide this month, to further expand McIvor’s share and distribution. “I foresee that single malts will continue to grow strong, but blended scotches will always have a niche for everyday whisky consum- ers,” Beraha continues.

Pushing the Brand in More Profitable Directions Other blended whisky makers have worked this same field, like behemoth Dewar’s White Label, which introduced super Dewar’s 12 Year Old and Dewar’s Signature Category focus

The Proof is in Single malts tend to attract consumers interested in quality, traditional authenticity and the Taste Single malts are a diversity and complexity of flavor profiles. Sampling is key at all levels. Charles Ho, providing the Take The Glenlivet, now at more than VP of Scotch whiskies, Rémy Cointreau, 250 million cases and growing at a rapid clip. importer of The Macallan, Highland Park action today; the The brand offers six iterations, including and blend Famous Grouse, says there’s an sub-category has The Glenlivet XXV, released at about $350. advantage when trying to sell a blend made Glenlivet’s strength is the main reason with such well-respected malts. “We know grown almost 33% single malts topped one million cases in the that the product is great, so what we need to since 2002. U.S. says Ron Zussman, brand director, The do is get more consumers to taste the spirit.” Glenlivet. The expressions – 12 Year Old, But blended whisky’s mature market 15 Year Old French Oak, Nadurra 16 Year means there is sensitivity concerning price, Old Cask Strength, 18 Year Old, 21 Year says Caspar MacRae, group marketing Old – have helped keep the brand on top. director for Scotches, at William Grant & promote them to consumers and create really “Glenlivet is the single malt that started it Sons: “I think the cause of our success has interesting drinks in the on-premise to get all, and its classic floral, light and easy flavors been providing a strong value proposition them to sample these whiskies,” Ruvo says. show through in the various expressions,” based on the fact that the brands are highly And that’s not true only for blends; Zussman says. authentic and high quality, and we’re Charlotte Voisey of William Grant & Sons A Scotch drinker’s curiosity to try presenting them to customers at a reasonable developed the Sweet Solera cocktail for different expressions has always helped price.” Grant’s two blends, Grant’s and Clan NYC bar Shorty’s 32. “Scotch cocktails Diageo, whose malts – Oban, Lagavullin MacGregor, both are doing well, he says. like that can attract new consumers to the and others – are available in limited volume. Ruvo, who says Cutty Sark will focus category,” says Caspar. But Diageo has never had a brand that its efforts on major urban areas, believes competes with category leaders Glenlivet consumers are starting to move towards Single-Malt Sweep and Glenfiddch. Until now that is, as the robust flavors, and cocktails could help. However marketers build blended whiskies, company introduced the Singleton of Skyy put Cutty Sark into a 3,000 account single malts provide the action today; the Glendullan to compete as a high volume, cocktail program this summer, built around sub-category has grown almost 33% since accessible price point malt, says Chris the movie Sex and the City; four cocktails 2002. “It’s a good place for malts,” says Parsons, VP of reserve brands for Diageo. featuring Skyy were named after female Robin Coupar, Glenrothes brand manager Diageo this year will also release limited characters, while the “Mr. Big” was made for the U.S.. “We make up about 11% of editions from Oban, Lagavulin, Talisker with Cutty Sark. the total category in volume but much and defunct distilleries Brora and Port “Blended Scotch needs to go on drink more in terms of value, since we tend to be Ellen, bottles of which sell for between $79 lists. I think the way they have got to go is higher priced.” and $399. “It’s nice to be able to provide variation to our consumers and keep the interest high in the brands,” he says. Single malt customers are very involved in the category and their favorite brands, says William Grant’s MacRae, who represents Glenfiddich and Balvenie, and engaging with them is crucial. “Single malts continue to reward consumers’ exploration over a lifetime; they are not something they grow out of,” adds MacRae. To feed that exploration, Balvenie’s malt master David Stewart has crafted two new expressions — The Balvenie Signature, a 12 year old aged in first–fill bourbon barrels, refill casks and sherry butts, expected to sell for around $53; and The Balvenie Rum Cask 17 Year Old, a limited edition retailing for around $129 a bottle, both available this fall. Further, Balvenie has named blogger categorY focus

“Hedonism.” Using a blend of 42 year “Dr. Whisky” Sam Simmons its fi rst newcomerS old whisky from Invergordon in the brand ambassador. northern Highlands with 29 year old William Grant & Sons also keeP the whisky distilled at Cameron Bridge, intends to focus on-premise a bit more, cateGory Scotland’s oldest continuously launching a series of Glenfi ddich- operating distillery. paired dinners at national steakhouse IntereStInG Compass Box also released restaurants, starting with 18 this fall at a limited version of its best The Palm. selling “The Peat Monster” Other single malts have had great in celebration of its 5th success with such brand extensions: The iconic brands might have their anniversary. “The Peat the Macallan creatively solved a sherry stronghold on the malt market, but new Monster Reserve Edition” cask crisis by introducing the Fine and unknown expressions keep making offers a peatier, richer and Oak range a few years ago, effectively their U.S. debut. higher-strength version of the doubling the number of expressions Beam Global this year classic bottling. it offered. But in a recent campaign launched Ardmore Traditional Diageo’s upcoming to re-imagine Glenmorangie, the Cask, the fi rst widely available limited releases include brand that arguably created the single malt from the Ardmore Oban 18-Year-Old, trend of experimental wood fi nishes, distillery. The only Highland available exclusively in owner Möet Hennessy USA trimmed malt to be 100% peated the U.S. beginning this fall, with only expressions to four, reformulated since its inception, Ardmore 7,716 bottles of the special bottling. each whisky and repositioned and is fi rst matured in ex-bourbon Oban The Distillers Edition has repackaged the brands. Sometimes, it barrels, then in handmade been double-matured in seems, more is less. 110 liter quarter casks. Only Montilla Fino sherry wood Ruvo and others say that shows 3,000 cases of Ardmore were casks and was distilled in and events focusing on sampling and introduced into the U.S. 1993 while Lagavulin The education is key to catching consumer Skyy Spirits introduced Cutty Sark Distillers Edition hails from interest, which he’ll need to do now Blended Malt Scotch Whisky in Islay, and was distilled in that Skyy’s malts include full-fl avored select U.S. markets, a pure malt made 1992 and extra aged in brands like Bowmore, Glenrothes and from a marriage of single malts offering Pedro Ximenez sherry wood Auchentoshen, as well as Japanese classic Speyside character. Among the casks. The Talisker distillery single malt Yamazaki. It’s a strategy malts used by John Ramsay, Master is located off the rugged followed to good effect by niche brands Blender for Cutty Sark, are Highland northwest coast of Scotland, like Compass Box and others, who Park, The Glenrothes and The Macallan. the only one there. Distilled have found that the Scotch drinker is Last fall, Pernod Ricard launched in 1995 and double-matured endlessly curious, willing to explore and Chivas 25 Year Old, what was really in Amoroso Sherry casks, not tradition-bound in the least; sounds the return of the original version of the the Distillers Edition is the fi rst to be like a customer worth having. ■ brand created for the American market released by Talisker in the United States in 1909. Produced in limited quantities since 2004. Talisker 30-year-old (only 2500 cases made it to the U.S. at Rare Edition is one of the oldest fi rst) Chivas Regal 25 Year Old and rarest expression from the Talisker is a blend of Speyside malt and distillery. Brora 25-Year-Old Rare grain whiskies aged for at least Edition hailing from a “ghost distillery” 25 years. on the Sutherland coast which closed in Benromach Organic is 1983, any release from Brora extremely the fi rst bottled single malt exclusive. An allotment of 456 bottles to be certifi ed by the Soil of the 25-year-old Rare Edition will Association of the U.K. and the be available in the U.S. Also closed fi rst Organic Single Malt to be in 1983, releases from the Port released in the U.S. Ellen “ghost distillery” are extremely Boutique Compass Box rare, and only 600 bottles of the Port has launched “Hedonism Ellen 29-year-old Rare Edition will be Maximus,” a reserve of the available in the U.S. brand’s 100% grain whisky