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Premium Bourbons Making Marked Gains In US

April 29, 2011

Despite the economic challenges facing the U.S. spirits industry over the past few years, some categories have continued expanding through the downturn, even at the premium end. The premium-and-above Bourbon segment is a prime example. Last year, U.S. depletions of the leading premium Bourbon brands rose by 200,000 cases, or 3%, roughly doubling their rate of growth from the year prior, according to Impact Databank. That growth seems to be carrying over thus far in 2011.

Industry leader Jack Daniel’s saw a slight depletions decline on its core brand in calendar 2010, but in the three months through January depletions rose by 6%. Meanwhile, upscale extension Gentleman Jack has continued its advance through the downturn, although its growth rate slowed from 9% in 2009 (when it was an Impact Hot Brand) to 2% last year.

Super-premium portfoliomate Woodford Reserve also continues to make gains. “The landscape is good right now for brown spirits in general,” says Laura Petry, senior brand manager for Woodford Reserve. “The rise in crafted Bourbon cocktails is easing younger consumers—those in the LDA to 29 group—into the category.” For Brown-Forman’s fiscal year (ending April 30th), Woodford Reserve is expected to be up by double-digits, and it’s currently seeing growth in all 50 states, Petry says.

One trend energizing the Bourbon category—especially at premium-and-above—is the flavor craze. Jack Daniel’s Tennessee Honey, rolling out this spring, is one new entry throwing its hat in the ring with other flavored Bourbon offerings like Skyy’s Wild Turkey American Honey, Heaven Hill’s Evan Williams Honey Reserve and Cherry Reserve, and Jim Beam’s Red Stag.

While American Honey continues to exceed expectations, the core Wild Turkey brand is achieving low single-digit growth. Wild Turkey will see a new marketing campaign this year, focused on its “ownable, rebellious position in the category,” according to Skyy Spirits group brand director Umberto Luchini. “We’re ready to launch an all-encompassing marketing blitz that will reach consumers in the brand’s key touch points. It will live in stores, bars and clubs and, backed by substantial investments in all key national media outlets,” he says.

Meanwhile, Beam Inc’s Maker’s Mark (which is in the process of adding capacity to meet rising demand) will likely surpass 1 million cases in depletions for the first time this year, and remains one of the segment’s most vibrant brands. Bill Newlands, president of Beam’s North America region, tells Shanken News Daily the brand will see its first U.S. TV ad campaign this May. At the same time, Beam’s flagship Bourbon brand has been reinvigorated by Red Stag, one of Beam’s most successful launches in recent memory, selling a few dollars up from the core Jim Beam brand at retail. “Our Bourbon business is really on fire across the board,” Newlands says, noting that the group’s new Knob Creek Single Barrel offering is also off to a strong start. Beam’s plans for this year include continued strong investment behind its premium Bourbon business—as part of a double-digit increase in marketing spend across its portfolio—but the company is clearly not alone in sensing a premium growth opportunity within the category.

Bourbon – Leading Premium-Plus Brands in the USA
(thousands of nine-liter case depletions)
Percent Change
Brand Distiller 2008 2009 2010 2008-2009 2009-2010
Jack Daniel’s* Brown-Forman Beverages Worldwide 4,705 4,680 4,645 -0.5% -0.7%
Maker’s Mark Beam Global Spirits & Wine 770 805 915 4.5% 13.7%
Wild Turkey Skyy Spirits (Campari) 570 550 550 -3.5%
Gentleman Jack* Brown-Forman Beverages Worldwide 215 235 240 9.3% 2.1%
Red Stag Beam Global Spirits & Wine 80 190 + +
Woodford Reserve Brown-Forman Beverages Worldwide 105 115 125 9.5% 8.7%
Total Leading Brands 6,365 6,465 6,665 1.6% 3.1%
* Tennessee whiskey

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