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Brown Spirits Ramp Up Innovation Efforts, As Flavored Vodka Shifts Gears

June 12, 2015

With vodka’s growth cooling and the whisk(e)y renaissance in full swing, brown spirits are leading innovation efforts across the U.S. market, courting both connoisseurs with upscale, craft-like offerings and neophytes with a variety of entry-level and flavored options.

As Bourbon continues to post strong growth (up 10% in Nielsen channels over the past year), the segment has attracted a wave of new product launches, with Diageo among the most active players. Following up on last year’s launch of its Orphan Barrel Whiskey Project, the drinks giant recently reintroduced its I.W. Harper Bourbon brand into the U.S. with two new super-premium offerings ($35-$75 a 750-ml.), as well as a pair of entries under a new Blade and Bow brand ($49.99-$149.99). Meanwhile, within whiskey’s flavored segment, Heaven Hill’s fast-rising Evan Williams brand opted to add a Peach expression to its arsenal this spring, bringing its flavored stable to four entries.

The Scotch category has also invested heavily in innovation of late. Notably, Pernod Ricard is aiming to “bridge the Bourbon and Scotch worlds” with its recent rollout of Barrelhound ($30), formulated to have a sweeter, more accessible taste profile than typical Scotch whiskies. Pernod has also lately bolstered its Scotch range with Chivas Regal Extra, a new variant aged in Oloroso sherry casks and positioned above the brand’s core 12-year-old at around $45.

While whiskies have been at the new-product forefront recently, other categories are also in innovation mode. With consumers gravitating to super-premium Tequilas, for instance, Campari America launched Espolòn Bourbon Barrel-Finished Añejo ($34.99) late last year. “Tequila is now competing with other sophisticated sipping spirits like Bourbon and rum,” confirms Umberto Luchini, vice president of marketing, Campari America. “Bourbon is driving the spirits industry right now, but this should ultimately benefit aged Tequilas, which can impart the same rich flavor profiles.” Likewise, Sidney Frank Importing Co.’s Casamigos Tequila has added an añejo ($45) to its line recently, and Diageo’s luxury DeLéon brand extended with Platinum and Reposado variants positioned at $60. Meanwhile, Proximo Spirits’ 1800 is targeting collectors with its launch of 1800 Colección ($2,700), a double-distilled añejo Tequila aged in charred French oak barrels for more than three years.

While vodka’s long run of flavor-driven growth has slowed, opportunistic marketers still see room for expansion. “Saturation of flavors is a challenge, and dessert flavors are slowing down,” notes Marla Burke, marketing and creative director for Phillips Distilling, maker of UV vodka ($12). “However, we’re seeing success with natural fruit flavors, like our most recent launch, UV Ruby Red Grapefruit, and UV Sriracha was one of our most successful launches, so there’s room for savory flavors as well.” Fellow flavor-focused brand Pinnacle, from Beam Suntory, has also lessened its reliance on dessert-focused concepts and returned to more natural flavors like Cucumber and Habanero (both $12.99), and Constellation’s Svedka brand has reloaded this year with a Grapefruit Jalapeño entry ($12.99).

A comprehensive report on new spirits products appears in the June 1&15 issue of Impact.

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