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On The Rise: Bourbon Marketers Hiking Prices Amid Category Renaissance

September 2, 2014

While Bourbon enjoyed solid volume growth in 2013—the category was up by 3% to 17.2 million cases in the U.S., according to Impact Databank—progress appears to have been even more significant on the value side of the equation. A combination of widespread trading-up trends being met with a flurry of upscale new products and price hikes among some of the category’s biggest players are bringing a sharply rising influx of cash into Bourbon marketers’ coffers.

Category leader Jack Daniel’s was essentially flat in volume terms in 2013, with depletions at roughly 4.8 million cases. (Brand extension Jack Daniel’s Tennessee Honey, however, grew at double-digit rates last year and continues to advance quickly in 2014.) Volume may have eased at Jack Daniel’s as a result of higher pricing. The brand’s Black Label is currently averaging around $21 a 750-ml. bottle at retail, though in some high-tax states, the price can reach $30. Two to three years ago, the average price was closer to $19. “We’ve been very open about the fact that we’re taking price increases on all our whiskies over the last few years, as has most of the industry,” says John Hayes, senior vice president and managing director at Jack Daniel’s, which is owned by Brown-Forman. He notes that, according to Nielsen data, all Bourbon prices were up by an average of 5.3% in the spring compared with a year earlier. In 2013, the increase was a more modest 3.8% over 2012. Spirits as a whole rose in price just 2.5% this spring.

Campari hasn’t been shy about boosting prices for Wild Turkey either. The flagship Wild Turkey 101 is currently priced at $20 a 750-ml. bottle. “It was around $15 and $16 in many places three years ago,” says Andrew Floor, senior marketing director, dark spirits at Campari America. “Now the classic law of supply and demand is kicking in. With the category catching fire, there has been a right-sizing of pricing. We have a responsibility to our shareholders to drive profitable growth.” Wild Turkey Spiced ($23), a line extension that has distinctive rum and vanilla flavors, is delivering solid sales since launching late last year, according to Floor.

At Beam Suntory, Jim Beam continues to be priced around $15 a 750-ml. bottle at retail. The company’s experiments with flavors beyond its original cherry-flavored Red Stag ($18 to $19) are ongoing. Last fall, Jim Beam Maple debuted at the same price. This August, the 35%-abv Jim Beam Kentucky Fire launched for around $18—the same price as Red Stag Hardcore Cider, which was introduced last year. In addition, the Jim Beam Signature Craft series features a 12-year-old Bourbon and another whiskey that includes some Spanish brandy, both retailing at around $40. This fall, the company is replacing the Spanish brandy-finished variant with the Beam Signature Craft Quarter Cask (also $40).

“Signature Craft series is our way of showing off the experimental side of our distillers,” says senior director of Bourbons Vanessa Jenkins. “Since the launch of Red Stag in 2009, we’ve taken a lot of pride in our innovation.” The company isn’t done yet: This month, it’s also launching the new Harvest Bourbon Collection, which features two bottlings—one with soft red wheat in the mash bill and the other heavy on brown rice. Both will be offered in 375-ml. bottles for $50. “The quantities are extremely limited,” Jenkins says.

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