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Brown Goods’ Bright Future

Posted on  | August 24, 2014   Bookmark and Share
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The whiskey train is still picking up speed—make sure you’re on board.

The impact of craft distilling has included visibility well beyond producers’ home turf. Garrison Brothers—Texas’s first legal whiskey distillery, est. 2007—makes their Texas straight Bourbon Whiskey now also available in Arizona and New York as well as Texas.

September is officially Bourbon Month. So what else is new? Every month has felt a little like bourbon month lately, even over the summer.

But the buzz is hardly exclusive to bourbon. We are in the midst of a wide-ranging whiskey wave. We’ve seen double-digit growth in Irish whiskies, a boomlet of craft spirits and the ascent of critically acclaimed Japanese whiskey, not to mention an improbable parade of new Scotches—blended and single grain—that have made the high end of brown goods a connoisseur’s playground.  

If anything has become clear in 2014, it is whiskey’s firm grip on the top of the heap—in terms of growth, product introductions and sheer excitement. Here are some signs that America’s love affair with all spirits brown is becoming even more heated.

 

It’s Big and Small

The number of craft distilleries in the U.S. could still be counted by the dozens in 2005. Less than a decade later, the number is over 600. No doubt whiskies, featuring both traditional and novel mash bills, are the calling card of many. But an even more telling stat: whiskey accounted for 80% of all sales growth in U.S. spirits in 2013, according to the Distilled Spirits Council of the United States (DISCUS). Interestingly, Diageo and Pernod Ricard, both firms whose portfolios are predominantly white goods, have been getting their growth from the brown slice of their portfolio pies, Diageo with Bulleit (up 60% in the second half of 2013) and Johnnie Walker; and Pernod Ricard with Jameson.

Rising Tide Lifts Diverse Boats

A sure sign of whiskey’s strength is the sheer variety—and not just from the craft explosion. Established distillers, too, have been extremely active in developing specialized whiskies. Single barrel programs. Non-traditional wood-finishing treatments. Higher-proof expressions. Commemorative bottlings. No-age-statement malts. Provocative blends.

Considering that time is such a crucial factor in whiskey-making, marketers and distillers have become especially resourceful in recent years. An accelerating pace of new product releases in turn casts a healthy glow on to the entire category. Similarly, the proliferation of whiskies has ensured price-point options for the budget-minded party thrower and the home bar enthusiast as well as the most  geeky drinker/collector.

Definitions and  Borders Are Blurry

Yes, Kentucky is the homeland of bourbon, and about 95% of the bourbon in America is made there; but bourbon whiskey (the technical term used outside Kentucky) can be made in any state. As more and more homespun  bourbons pop up all over the country, the category feels that much more vibrant. Further, unlike in wine, where walls of comparable products still overwhelm shoppers, the variety is being welcomed; marketers, bartenders and retailers alike have found whiskey drinkers as a group to be especially open to trying new brands.

A Dram of Drama  Never Hurt

While whiskies doze peacefully in barrels—from rickhouses of Kentucky to sea-breezed Scotland to scenic mountaintops of Japan—the whiskey scene of late has been anything but tranquil. Who can forget the Maker’s Mark fiasco in early 2013, when the brand announced plans—soon retracted—to cut the bourbon’s proof from 90 to 84. Distillers, corporations and politicians have been engaging in an even more heated debate over the definition of Tennessee Whiskey.

Meanwhile, Suntory spent $16 billion to acquire the Jim Beam brands; Diageo broke ground on a $115 million, 1.8 million gallon facility in Kentucky; Pernod Ricard’s Irish Distillers have sunk upwards of $127 million into the Midleton Distillery in County Cork; and The Macallan is opening a new distillery to meet international demand for Edrington Group Scotch whiskies. And in states across America—notably New Jersey and New York—governments have rallied behind craft distillers, encouraging start-ups and promoting the idea of supporting local spirits.

In short, it’s an exciting time for whiskey makers and sellers. Even the talk of shortages that flare up in the trade (“I heard So-and-So only has four more years of juice!”) can be viewed as a byproduct of a genuine boom. Is there a “whiskey-pocalypse” in our future? Time will tell, but meanwhile the near future of brown goods has never been brighter, so everyone who trades in whiskey today should be looking to offer a balanced range—spanning price points, embracing geography and presenting a range of styles.


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