Diageo Looks To Update Single Malt Marketing For A New Generation

Single malt Scotch whisky has long leveraged its historical mystique to burnish a reputation as one of the drinks industry’s most prestigious categories. But while paying tribute to the spirit’s storied past, key players are now updating their marketing approach to reach a new generation of single malt consumers—and extend the category’s strong upward momentum.

“The category as a whole is at a crossroads,” says Brian Cox, director, Scotch whisky at Diageo North America. “What has doubled single malts to 1.5 million cases in 2016, up from 750,000 cases in 2008, is not what will drive the category to 3 million cases while maintaining premiumization levels. It’s key that we not abandon what has proven successful to our growth, lest we lose a strong and super-premium base, but we need to develop new tactics to recruit new consumer segments.” Diageo has about an 8% share of the U.S. single malt category by volume, according to Impact Databank, with most of its offerings priced above $60 a bottle, skewing toward the high end.

Cox says Diageo’s “My Tales of Whisky” digital and social initiative featuring popular comedian Nick Offerman “is a great example of our traditional substance and more dynamic and contemporary form. This new approach helps us to recruit new consumers, be they within the ‘Millennial’ or ‘Gen X’ segments, and ultimately allows us to continue to trade consumers up into our higher-end Classic Malts.”

Diageo’s Lagavulin malt from Islay, featured in the Offerman series, is among the key brands driving double-digit growth for the company in the single malt space. Lagavulin has released two limited editions this year—an 8-year-old ($65) and a 25-year-old ($1,200)—as part of its 200th anniversary celebration. Portfoliomate Oban, from the Highlands, is also on a steep rise, with its Little Bay expression ($75) showing increasing momentum. The Talisker and Dalwhinnie brands are likewise among the company’s best performing single malts lately. Oban, Lagavulin, Talisker and Dalwhinnie combined for about 90,000 cases in the U.S. last year, according to Impact Databank.

“Our single malt brands continue to perform well across the board in major markets including the ‘Acela corridor’ between D.C. and Boston, with New York and New Jersey in particularly strong growth along with Florida, California and Texas,” says Cox. “The Pacific Northwest is also an increasingly dynamic market.”

This holiday season, Diageo is courting both single malt aficionados and novices with new releases. Its annual “special release” whiskies for 2016 include a 37-year-old Port Ellen ($4,000), a 38-year-old Brora ($2,200) and a 40-year-old Cambus single grain ($1,150) among others. Meanwhile, the company has also launched a new Singleton of Glendullan malt featuring 12-year-old, 15-year-old and 18-year-old expressions, which are aged primarily in Bourbon casks. “The Singleton of Glendullan fills a gap for us in the $30-$50 range,” Cox notes. “We believe it will quickly gain traction.” —Adam Polonski and Daniel Marsteller

Tagged : Diageo, Scotch, Scotch whisky, spirits, whisky

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