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Scotch Whisky’s U.S. Growth Being Driven By An Influx Of New Consumers

September 25, 2017

While American and Irish whiskies have captured much of the enthusiasm surrounding the whisk(e)y boom, Scotch is also showing improved results lately, particularly at the high end. After losing ground from 2012 to 2015, Scotch shipments to the U.S. market rose 2% to 9.2 million nine-liter cases last year, according to Impact Databank. By value, progress was more pronounced, as shipments surged 14.2% to £855.6 million ($1.12b) in 2016, boosted by a weaker pound sterling following the U.K.’s Brexit vote.

Johnnie Walker—the leading Scotch brand in the U.S. and globally—has contributed to the category’s comeback. After falling to its lowest level in more than five years in 2015, the blended Scotch range grew 3.4% to 1.73 million cases in the U.S. last year, with gains driven primarily by Johnnie Walker Black Label and the brand’s Reserve variants. This year, the brand is looking to attract cocktail enthusiasts, highlighting its Red Label in the U.S. by touting its mixability.

Johnnie Walker also recently launched its Blenders’ Batch series in the U.S. market, a line of limited edition labels developed by master blender Jim Beveridge. The first U.S. release came last fall with the very limited Rye Cask Finish, which has since been followed by Blenders’ Batch Triple Grain American Oak ($30) and Blenders’ Batch Wine Cask Blend ($30), which are more widely available.

Also on the rise is Johnnie Walker portfoliomate Buchanan’s, which has carved out a strong following among Hispanic Americans in the U.S., backed by its “Es Nuestro Momento” (It’s Our Time) campaign, which celebrates the Latino community. Buchanan’s has sponsorship agreements with Colombian singer J Balvin, the Latin Grammys and the Billboard Latin Music Awards. The brand has risen to become the third-largest Scotch brand in the U.S., and is on pace to cross a half-million cases this year.

Dewar’s, the U.S. market’s second-largest Scotch brand, eked out a 0.1% gain to 1.2 million cases last year, buoyed by new efforts to court the millennial demographic. Recent activations include the experiential John Dewar & Sons Traveling Whisky Emporium tour, which launched at the Chicago Pitchfork Music Festival this past summer. Michael Calabrese, brand director for the whisky portfolio at Bacardi USA, says a significant uptick in female Scotch consumers is also driving growth. “Women now account for around 30% of whisk(e)y consumers,” he says. “They’ve become a prime consumer target and they’ll be key to future growth in the category.”

Other leading blended Scotch brands saw a tougher road last year, including Pernod Ricard’s Chivas Regal (-5.8% to 337,000 cases) and Clan MacGregor (-0.6% to 438,000 cases). Still, Pernod notes that its recent Chivas Regal Extra extension ($40) has performed well, and luxury offshoot Ultis ($200) is also garnering interest. And William Grant is seeing strong progress from a small base for rising star Monkey Shoulder ($30), which surged 31% to 45,000 cases in the U.S. last year and is highly touted by retailers. Monkey Shoulder—which is made from a combination of the Glenfiddich, Balvenie and Kininvie malts—has made notable gains in the mixology space.

Impact’s October 1 issue has a full report on the U.S. and global Scotch whisky category. To subscribe to Impact, click here. —Christina Jelski

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