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As Flavored Whiskies Expand, Top Players See Opportunities And Challenges

January 15, 2014

With more than 50 new flavored whiskey products hitting the U.S. market in the first half of 2013 alone, producers have placed a big bet on the segment’s expansion. But exactly what the flavored whiskey landscape will look like a few years down the road remains up for debate.

For marketers, the central appeal of flavored whiskies has been their success in bridging the category into new demographics—not only younger age groups, but also the multicultural segment. Brown-Forman-owned Jack Daniel’s Tennessee Honey, whose sales increased by 30% in the company’s fiscal first half ended in October, is among the brands actively courting the multicultural audience. “Currently, some of our marketing efforts are targeting multicultural consumers, specifically the Hispanic market,” says John Hayes, senior vice president, managing director, Jack Daniel’s. “Tennessee Honey is seeing growth with new drinkers, as well as consumers who are extending their occasion usage.”

While Brown-Forman has said it will remain cautious in adding new flavors to the venerable Jack Daniel’s brand, it did extend with a cider-flavored Winter Jack offering in recent months. It also recently registered trademarks for Tennessee Fire and Tennessee Cinnamon—auguring an entry into the cinnamon segment that’s been so successful for Sazerac’s Fireball brand, among others.

Other whiskey producers emphasize the need for a selective approach to flavors. “We don’t expect the flavor palette of whiskey to ever be as broad as that of vodka. It will end up being more like flavored rum, with a more narrow set of flavor types that play well with the base spirit,” says Susan Wahl, senior brand manager, whiskey portfolio, Heaven Hill. “We’re looking at a few flavor combinations, both sweet and savory, that work well. Our recent Evan Williams Apple Orchard seasonal flavor is a good example of that.”

Campari America’s Wild Turkey brand was among the first to foray into whiskey flavors with its American Honey offering. But the company’s senior marketing director for dark spirits, Andrew Floor, believes the rapid-fire expansion of the flavor segment carries potential pitfalls. “Some big whiskey producers are going too far too quickly in a cynical grab for shelf space,” he says. “We should be exploring new and interesting twists on the classic Bourbon and rye flavors, working with bartenders and consumers as their needs evolve. But we shouldn’t be turning the category into something it isn’t. As always, the consumer will provide the ultimate test.”

Beam Inc., whose Red Stag brand sparked the flavored whiskey boom, sees plenty more experimentation and innovation on the horizon. “We expect to see further innovation, and we think the category will continue to grow aggressively,” says Beam’s general manager, whiskies Chris Bauder. “Whiskey drinkers are, now more than ever, looking to expand their repertoires. Flavor, variety and mixability are three consumer trends that flavored whiskies meet head-on.”

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