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Blended Scotch Players Tout New Expressions In Bid To Revitalize The Category

October 24, 2014

With sales of Bourbon and Irish whiskey soaring, blended Scotch brands are feeling the heat in the U.S. market. The audience for budget brands continues to shrink, and younger consumers are moving from craft beer or vodka to single malt Scotch, often bypassing blends altogether. In response to this quandary, some key blends are being recast.

A year ago, Diageo introduced the Johnnie Walker Platinum label ($110). To fill a gap below that tier, this fall it’s launching Gold Label Reserve ($80), a step up from Johnnie Walker Double Black ($45). While Platinum has a smokier tinge, Gold is described as lighter and creamier. In an effort to bring back the Highball, Diageo is recommending that Gold be served with soda over crushed ice.

Further up the Johnnie Walker ladder is the John Walker and Sons Private Collection 2014 Edition ($850), with a decidedly smoky flavor. And Diageo’s Buchanan’s Master label ($37), previously in limited release, is now a permanent part of the portfolio. Buchanan’s has a strong Hispanic demographic that’s increasingly willing to trade up to Buchanan’s 18-year-old Special Reserve ($70) and Red Seal 25-year-old ($140).

Other blended Scotch players are also testing the upper boundaries. Pernod Ricard is promoting its Chivas Regal 25-year-old at $300 and Ballantine’s 17-year-old at $80, the latter popular with the Korean demographic. And Royal Salute Stone of Destiny 38-year-old from Chivas Regal is retailing for as high as $700.

Edrington Americas has supplemented its original Cutty Sark ($20), with Cutty Sark Prohibition ($30), bottled at 100-proof (compared to 80-proof for the core brand), reflecting the fact that Cutty was shipped at a higher strength during Prohibition. Edrington Americas chief executive Paul Ross says this type of product will play a key role in revitalizing the blended Scotch category. Edrington is also testing a label called Cutty Sark Storm in Puerto Rico that contains a smoky, Islay malt taste. Another Edrington label called Naked Grouse (about $56), aged entirely in Sherry casks, is currently marketed outside the U.S. but could arrive stateside in the future.

No one expects flavors to emerge with Scotch as swiftly as they have for Bourbon, where Jim Beam Honey, Red Stag, Jack Daniel’s Tennessee Honey and Wild Turkey American Honey have taken the market by storm. The most significant effort to date has been Bacardi USA’s launch of Dewar’s Highlander Honey ($24) last year. This past March, Diageo North America said it would introduce a new J&B expression called J&B Urban Honey, bottled at 35% abv and currently available only in Spain. Meanwhile, Pernod Ricard USA is readying the lime-infused Ballantine’s Brasil. Neither flavored line extension appears headed for the U.S. for now.

Blended Scotch will likely continue its move upmarket, and on-premise retailers like what they see. John Lindquist, general manager of the Tam O’Shanter restaurant in Los Angeles, charges just $7.50 a 1.5-ounce pour of Dewar’s. But he’s seen rising demand for such rarities as the Johnnie Walker Blue Label at $39 a pour and the Cutty Sark Tam O’Shanter at $40. “New blends are coming to the market all the time, usually at higher prices,” he says. “We’d like to carry more of them.”

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