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Blended Scotch Comeback? A Struggling Category Sees Salvation Through Premiumization

Posted on  | April 28, 2012   Bookmark and Share
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For decades, it appeared that blended Scotch whisky, the stuff of highballs and whisky sours, would end not with a bang but a whimper, suffering steady declines at the hands of an aging consumer base, the white spirits boom and aspirational young drinkers. According to the Distilled Spirits Council of the United States (DISCUS), in 2011, 7.6 million cases of blended Scotch were sold, representing an overall decline of 2.6% from the previous year—the largest decrease of any spirit and the latest in a long series of negatives.

That said, this lumbering category still has a sparkle in its eye: Super-premium offerings of the most expensive blended Scotch—including brands like Chivas 18 and Johnnie Walker Blue—enjoyed dramatic 66.9% growth in 2011. The future for blended Scotch whisky appears to lie in premiumization and appealing to single-malt fans. Growing from a mere 2.6% of total Scotch volume in 1990, single malts accounted for an impressive 13% by 2010 according to Impact Databank. According to DISCUS, single malts grew 9.5% by volume from 2010 to 2011 alone. So where do blends go from here?

Too Big to Fail

Blended Scotch volumes are suffering greatest at the entry level, posting drops in excess of 4% at both the value and premium levels according to DISCUS. But this is one part of a much larger story, according to J.C. Iglesias, director of marketing for Scotch whisky and Cognac at Pernod Ricard USA. “The blended category has seen long-term declines,” says Iglesias. “But there are two different stories going on: what I call the age-statement and non-age-statement blended Scotches. There is the hypothesis that consumers go to a shelf and when they see an age statement they perceive quality, and so those brands are relatively healthy.” In fact, Chivas Regal, which offers blended Scotch in ages of 12, 18 and 25, managed a 1.3% gain overall for 2010.

According to Iglesias, the age-statement blends among luxury brands project the image that aspirational drinkers want to portray. “When you want to say something positive to your peers in public, you don’t want to purchase a $15 bottle of Scotch,” he says. “I think everyone is doing well with their middle ground—the $50 and up blends.” Indeed, considering the precipitous tumble by former leaders like Cutty Sark and J&B, higher-end marques will have to bail out the category.

Part of the upscale aspiration for Dewar’s—which includes the iconic White Label as well as Dewar’s 12 and 18—has included redesigned upscale packaging. “Dewar’s has benefited from the growth of the Scotch category in the premium-plus and single-malt segments. Dewar’s higher marques have experienced growth, and in particular Dewar’s 12 has grown double digits in the past year,” says Juan Rovira, chief marketing officer for Bacardi U.S.A.

Art Appreciation

Nearly all blended Scotch producers agree that education remains a key to keeping blends relevant. It appears that many new drinkers are coming to the Scotch category from the top, rather than working their way through highballs, blended Scotch and then moving to malts. In order to get them to consider Scotch outside of the abundance of single malts, it’s critical to relate the importance of the blender’s art.

“There is a lot of education to be done in the Scotch category,” says Adam Rosen, director of Scotch for Diageo, which includes luxury blended Scotch behemoth Johnnie Walker. “We have many single malts that make up Walker, and they come together to create a specific flavor profile that has amazing consistency. A single malt is a beautiful solo instrument, but with the art of blending you can compose a symphony in a way that one distillery can’t.”

With an array of expressions, denoted by both age and their popular “color” label calls, including Red, Black, Green, Gold and Blue, Johnnie Walker is well positioned to educate on the quality and diversity available in blended Scotch. According to Rosen, this is accomplished through programs like the Striding Man Society and an invitational mentorship program called the House of Walker.

The prestige of blending is also getting a boost among serious Scotch enthusiasts from smaller producers like John Glaser, founder of Compass Box Whisky Co.  Glaser’s latest blended Scotch endeavor, Great King Street, debuted in the U.S. in fall 2011. “We all know blends are on a downward trend. When you look at the cheaper blends in particular it is a horror show,” says Glaser. “Blends need a revival because people think they are all bad and only single malts can be good.”

Getting down to specifics, blended Scotch is a blend of malt whiskey, made in pot stills from only malted barley, and grain whisky, a lighter whiskey that can use various grains and is generally made in column stills. By varying the recipe, including the ratio of the whisky types, and selecting different age and quality of casks, the blender changes the final whisky. For Great King Street, “we are sourcing from the best casks, including first-fill grain whisky, and some malts coming from virgin oak and Sherry barrels, so they are more active casks. And, we are using 50% malt, where most premium blends only go as high as 40%,” explains Glaser.

As in so many other spirit categories, blended Scotch seems to be undergoing a blossoming of points of distinction. Campbeltown Loch, for instance, features an exceptionally high malt content for a whisky at its price point. Grand Macnish 12 Year Old, the first in a planned series of age-statement bottlings, was aged in both Sherry and bourbon casks. Cluny, one of America’s top-selling domestically bottled blended Scotches, is composed of more than 30 malt whiskies from all over Scotland, plus aged grain whiskies. Glen Salen was created specifically for North America, aiming to deliver the flavor and interest of malt whisky but at a competitive price; exemplifying the “blended malt” genre, it contains only malt whiskies—from 35 different distilleries.

Other blenders have tinkered with their recipes and explored new expressions, to appeal to drinkers accustomed to bigger flavor and more body. Katy Stollery, global public relations manager for The Famous Grouse, distributed by Rémy Cointreau USA, explains, “The Black Grouse is a blend of The Famous Grouse with peated malts to create a smoky but smooth whisky. This is proving very popular with a younger audience.”

Go Long

While many blended Scotch drinkers take their high-end blends neat or on the rocks, the affordability and drinkability of blended Scotches makes them ideal for usage occasions that don’t compete directly with malt whisky, like the highball. “We are encouraging people to drink Great King Street as a highball, a long drink. A classic highball, made with ice, club soda, a dash of bitters and a lemon twist would certainly be the signature drink,” says Glaser, citing the current vogue for such high-end highballs in Japan.

Relatively speaking, blended Scotch may also be suffering because it has remained largely on the sidelines during the current cocktail craze. “There is not much point in promoting 25 Chivas cocktails that will never see the light of day,” says Pernod Ricard’s Iglesias. “But we do use Chivas and Coke, ginger ale and soda as a sort of ‘on ramp.’ Add a Rob Roy and Old-Fashioned to that, and it’s about all you need to know.”

Whether in a highball or on the rocks, these simple, classic ways to enjoy Scotch are bing fueled by popular culture, notably the 1960s-inspired hit series Mad Men. “We want to stay relevant for today, and properties like Mad Men are actually helping,” says Diageo’s Rosen. “These guys are drinking Scotch on the rocks, and that is tremendous for Walker because something they embody is status, masculinity and success.”

Other occasions that would make single-malt lovers cringe, but seem perfectly acceptable for blended Scotch, include a stay in the freezer.  According to Rosen, Johnnie Walker Gold Label, an 18-year-old blend, has a contingent of freezer-loving fans. And Famous Grouse offers Snow Grouse, actually a blended grain whisky, designed to be light in flavor and sipped from the freezer. Consumers may be demanding more than ever from blended Scotch, but by promoting quality and innovation, leading brands are keeping the art of the blend alive.  

Baffled by ‘Blended’?

In November 2011, Compass Box Whisky Co. bottled a whisky known as the “The Last Vatted Malt,” a farewell to historic Scotch labeling terms like “vatted malt” and “pure malt,” traditionally used to describe a whisky made from two or more single malts. With The Scotch Whisky Regulations 2009 in full effect, these descriptions became prohibited from Scotch whisky labels. While the new law aims to better distinguish the five styles of Scotch whisky, some see a heavy hand in protecting “single-malt,” resulting in an extravagant use of the term “blended” across all-malt, all-grain and malt-grain whiskies.

Here is a thumbnail summary of the definitions laid out in The Scotch Whisky Regulations 2009 (SWR), which replaced the Scotch Whisky Order 1990:

• The two basic types of Scotch Whisky, from which all blends are made, are Single Malt Scotch Whisky and Single Grain Scotch Whisky. In practice there is no change in the way that Single Malt Scotch Whisky and Single Grain Scotch Whisky must be produced.

• Single Malt Scotch Whisky means a Scotch Whisky produced from only water and malted barley at a single distillery by batch distillation in pot stills.

• Single Grain Scotch Whisky means a Scotch Whisky distilled at a single distillery but which, in addition to water and malted barley, may also be produced from whole grains of other malted or unmalted cereals.

• Blended Scotch Whisky is defined under the SWR as a combination of one or more Single Malt Scotch Whiskies with one or more Single Grain Scotch Whiskies, which accords with traditional practice.

• Blended Malt Scotch Whisky means a blend of two or more Single Malt Scotch Whiskies from different distilleries.

• Blended Grain Scotch Whisky means a blend of two or more Single Grain Scotch Whiskies     from different distilleries.


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