Posted on | September 26, 2013
Written by | Jeffery Lindenmuth
Vodka may have the market cornered in terms of brand proliferation, but when it comes to breadth of styles within a spirits category, it’s difficult to rival Scotch whisky.
Getting a handle on Scotch’s range begins with a fundamental dichotomy—there are blends and there are single malts, and both types in turn sport multiple branches. At its foundation, the Scotch genre is built upon blends of malt whisky and lighter grain whisky; relatively affordable blends such as J&B, Ballantine’s and Cutty Sark formed the backbone of the category since the end of Prohibition. At the top of the category, however, single malts have transformed Scotch into a connoisseur’s haven—and changed the way many drinkers view the spirit overall.
Much of the evolution in recent years has been driven by premiumization, including age-statement blends from the likes of Dewar’s and Chivas Regal. Still the charisma of the category, for more than a decade, has belonged to single malt Scotch.
By definition, single malt Scotch is produced at a single distillery in Scotland from water and malted barley and aged in Scotland for at least three years. According to the Distilled Spirits Council of the United States (DISCUS), single-malt volumes have grown by 110% since 2002, reaching 1,586,000 9-liter case sales for 2012. Distilleries—with evocative names like Ardbeg, Glenmorangie, Glenfiddich, Glenrothes and Laphroaig—frequently offer many different ages and styles of their whiskies, often referred as “bottlings” or “expressions” by whisky lovers. On top of the revenue, these malts have helped imbue the category with its sense of romance, terroir and collectability.
Given the large array to choose from, it can certainly be a challenge to curate and balance a selection of Scotch whisky, especially as consumer tastes and knowledge continue to evolve quickly. Developing and maintaining a nationally-known Scotch selection has been a triumph for some specialty retailers, who shared their strategies for engaging consumers and capitalizing on trends in the current market.
At Liquor Outlet Wine Cellars in Boonton, NJ, Mark Taylor, whisky ambassador and store manager, helms a selection of around 30 blended Scotches and 150 single malts. “It’s a sad truth that Cutty and J&B and Inver House are struggling,” says Taylor. “But the base is so large I would never consider killing them. We’re still moving cases and it is a slow change to the more premium blends. I think the quality of Chivas 12 and new entries like Johnnie Walker Double Black and The Black Grouse have added some excitement to the category, with something popular, flavorful and very approachable.” Taylor adds that the blended Scotch from Compass Box Whisky has also helped restore luster to the slumping segment.
Joe Howell, whisky specialist and manager at Federal Wine & Spirits in Boston, concurs that as highball drinkers wane, premium blends and more youthful entries are trumping old standbys. He notes that Monkey Shoulder, which shed some stereotypes with its stylish package and non-traditional marketing, created a lot of buzz. “I really find a lot of quality for value in The Famous Grouse 18, a pure malt whiskey that does not get seen enough,” adds Howell. This style of Scotch, now officially called “blended malt Scotch whisky” is a small but growing area of interest made by blending of two or more single malts. Several grain whiskies may also be combined to create a fourth style of Scotch: blended grain Scotch whisky, of which Compass Box Hedonism is one of the few examples.
BE A MALT MAVEN
“When the single malt craze hit, everyone wanted a certain year,” says Taylor. It makes perfect sense since an age statement usually has a direct correlation with price for Scotch whisky. A 16-year-old malt is more expensive, and prestigious, than a 10-year-old. As the market matured and consumers began to understand the different regions and flavor profiles, however, age has taken a back seat to other intrinsics, like region, distillery, barrel type(s) and even celebrity distillers like Jim McEwan whose savvy fans followed his work from Bowmore to Bruichladdich. “Beyond just age, consumers are more focused on the distillery name and taste. They have sampled a lot more and are open to trying even broader flavors and styles,” says Taylor.
Traditional thinking, especially on-premise, dictated that a single-malt selection should include representations from each of the designated regions of Scotch whisky, especially the islands of Campbeltown and Islay and the regions of the Lowlands and the Highlands. Many lists further separate Speyside malts within the Highlands and add other island whiskies like Talisker from the Isle of Skye.
Regions remain a good way to organize single malts, collecting together the sherried Speyside malts or the smoky Islays to encourage exposure and trial. However, no retailer could attempt to weight these regions equally. You see, over half of Scotch distilleries reside in the Speyside area of the Highlands. And both Campbeltown and the Lowlands host only a small handful of working distilleries. “I do think it’s a good idea to have something from each region as a foundation, including something lighter from the Lowlands to demonstrate the range of character, but these regions don’t enjoy equal popularity,” says Jonathan Goldstein, proprietor of New York City’s Park Avenue Liquors, boasting a mecca-worthy selection of over 300 single malts. “Islay definitely has a greater following than the other regions because of the distinctive smoke and the number of distilleries and their many bottlings.”
Within Islay, the degree of smokiness can range from the more subtlely seductive Bowmore to the potent Ardbeg, with abundant devotees of each. “There is a lot of competition among retailers for the rarest and hard-to-get bottlings, especially for the highly peated malts,” says Goldstein. More than just drinkers, many Scotch buyers are collectors. “I think part of the appeal is it’s like comic books or baseball cards. There are these rarities and there is a desire to increase your collection,” he adds. This passion shared by Scotch buyers and retailers has the benefit of forming real relationships, the kind that rarely exist in the spirits arena outside of whisky.
At Federal, Howell says that the struggle to obtain new and rare products is one of the greatest challenges of managing a dynamic Scotch inventory: “We will do an email blast about a new product and often it is so popular you turn away more people than you help. I really want to service the customer, and that often means working with the wholesaler, knowing their inventory, so I can manage my purchases and grab an opportunity or keep stocks flowing.”
COURTING NEW FANS
With the popularity and rarity of exclusive Scotch whiskies have come escalating prices, which can be a challenge to developing future Scotch fans. “The entry price to single malts keeps climbing. There is less and less I can recommend under $30, and even under $40 is getting harder,” says Howell. Right now his solid picks include the Glenmorangie Original (10 years old) and the younger selections from independent bottlers Gordon & MacPhail. Aberlour and Jura are two other distilleries that have rightly earned praise for solid entry-level bottlings under $50, and both brands have other expressions that may entice trading up in future purchases.
Howell notes that he converts malt drinkers not only from the traditional training grounds of blended Scotch, but also from vodka and micro-brewed beer, often down-selling neophytes. “If someone is buying an expensive bottle I’ll say, ‘Hey that’s fine if you are only having a dram or two. But if you are intending to enjoy it regularly here is a real value.’ In bringing in younger drinkers, it’s important to avoid the sticker shock and keep them coming back,” says Howell, who also features one-on-one tasting as an important part of his sales effort.
In order to lower the price hurdle on both everyday and rare whisky, Goldstein says he is always on the lookout for miniature and half bottles. Both Great King Street Blended Scotch and The Macallan 12 Year Old are regularly available in 375ml, and recently rare malts from A.D. Rattray like Bunnahabhain 23 Year Old and Mortlach 22 Year Old appeared in 375ml, each selling for around $70.
A trend afoot in the miniature subcategory is bringing new meaning to the phrase “a wee dram.” Glenrothes recently debuted a set that contains three 100ml bottles—Glenrothes Select Reserve, and vintage-dated 1998 and 2001 expressions—priced to sell for $40. Also, timed for the holiday season, The Glenlivet has introduced a 200ml trio, containing one bottle each of The Glenlivet 12YO, 15YO 18YO; this set retails for $55.
GIFTS OF GOOD TASTE
The Glenrothes and Glenlivet sets offer appeal as “starter” sets for novices, but also as stocking-stuffable gifts. Indeed, Scotch naturally shines during the gifting season, and some retailers concur that unless they can elicit a clear brand or style preference from the shopper, it’s the notable names that win. “We do our best to narrow it down quickly, to blended or malt, or by getting the shopper’s price point, but it seems even for someone not at all knowledgeable about the category Chivas Royale Salute is known as a prestigious item appropriate for a gift. The same is true of Johnnie Blue. That should be your sell,” says Goldstein.
Taylor agrees that gift givers are quick to “jump on a bottle of Blue” regardless of price. For malt whisky gifts he does well recommending The Balvenie 21, with its impressive-sounding age, as well as offerings from iconic distillery The Glenfiddich.
Another approach to gifting involves tapping options that push into previously non-traditional territory for Scotch. For example, Jura’s lightly peated “Superstition” offers an intriguing package and story (the ancient Ankh cross on the bottle is a symbol of good luck in the western isles). And The Dalmore, building on the success of their Cigar Malt Reserve, has other off-the-usual-path expressions, including an 88-proof collaboration between renowned chef Daniel Boulud and Master Distiller Richard Paterson.
For Scotch collectors who are already knee-deep, an interesting option is a modern throwback: The Grand Macnish blended Scotch dates back to 1863, but its recent re-entry in our market gives it fresh appeal. The label’s age-statement expressions in distinctive dimpled bottles are enticingly affordable compared to single malts.