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Exclusive: U.S. Whiskey Boom Fuels Growth For World’s Top Spirits Marketers

September 4, 2013

Despite a slowdown in key emerging markets like China, India and Brazil, Impact’s exclusive report on the world’s top 10 spirits marketers reveals that most of the industry’s top players are in growth mode, thanks largely to the U.S. market’s whiskey renaissance. Eight of the top 10 global spirits marketers achieved volume growth in 2012, according to Impact Databank, and they’re enjoying similar progress in 2013.

Both Diageo and Pernod Ricard posted 8% sales growth in the U.S. for the year ended June 30, 2013. Meanwhile, Campari’s U.S. sales rose by 10.1% in the first half of calendar 2013, and Beam’s North America sales grew by 7% in that same period. Other competitors are also enjoying significant growth, with Brown-Forman posting 8% net sales growth in the U.S. for its latest fiscal year, which ended April 30, 2013.

In all of these cases, growth was driven by whisk(e)y—including both established brands and relatively new entrants in the thriving flavored whisk(e)y segment. Many of the biggest names in whisk(e)y are showing big gains in the U.S., including Jack Daniel’s, Jim Beam, Crown Royal, Canadian Club, Maker’s Mark, Wild Turkey and Jameson, among others.

Much of this success has come through an aggressive innovation strategy, much like the one vodka has been riding for years. In the year ended June 30, Crown Royal and Bulleit Bourbon accounted for nearly half of Diageo’s U.S. net sales growth, largely on the fast starts of new offerings Crown Royal Maple Finished and Bulleit 10-Year-Old. And Jim Beam’s Red Stag, Jack Daniel’s Tennessee Honey and Wild Turkey’s American Honey have been among the market’s best-performing entries lately, as has Sazerac’s Fireball, a cinnamon-flavored whisky that jumped by 80% to 810,000 cases last year, enjoying similar growth this year as it encroaches on Jägermeister’s turf as a favorite for on-premise shot consumption.

The whisk(e)y boom is benefiting the price mix, as brown spirits are currently priced significantly higher than white spirits. That, combined with widespread price increases, has led to value growth outpacing volume gains in the U.S. market. For instance, Diageo’s spirits volume was up 3% organically in its latest fiscal year, but organic net dollar sales advanced by 8%. “We’ve taken price increases across our brands, especially on our premium and super-premium entries,” said Larry Schwartz, president, Diageo North America, when the company’s results were released in late July.

For the full report on the world’s top 10 spirits marketers, see the September 1&15 edition of Impact.

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