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Flavored Whiskey’s Surge Fueled By New Products

November 3, 2015

The super-premium segment is driving Bourbon’s boom, but flavored products are also broadening the category’s appeal and providing a bridge to consumers. While some are classified as Bourbons and others are recognized as liqueurs, the fact remains that flavored (or specialty) whiskies are one of the U.S. spirits market’s hottest areas.

In the 52 weeks through August 9, specialty whiskies increased 27% in volume, according to IRI. The Jack Daniel’s franchise has been bolstered by its original flavored offshoot, Tennessee Honey ($22), which debuted in spring 2011 and last year reached 670,000 cases on 10% growth. In early 2014, the cinnamon-flavored entry Tennessee Fire was tested in eight initial markets before rolling out in nationwide distribution a few months later. By year-end, the 35%-abv spicy offering sold 77,000 cases in the U.S. In NABCA channels, Tennessee Fire ($25) had grown by nearly 600% through the end of June.

Jim Beam has been extremely active in the flavored space, with its original cherry-flavored Red Stag by Jim Beam ($18) shooting ahead by double-digits following its 2009 debut. After a slight dip in 2013, last year it rebounded with 12% growth to 365,000 cases. Jim Beam Maple was rolled out in fall 2013 and last year grew 75.5% to 56,000 cases. Beam Suntory entered the cinnamon-flavored space with Jim Beam Kentucky Fire (35% abv, $18) last August, which by year-end had reached 88,000 cases. Foraying further into the segment, in August Jim Beam Apple was introduced to the U.S. market.

One of the first Bourbons in the flavored whiskey space, Wild Turkey’s American Honey had been a strong addition to Campari America’s popular brand until encountering slower sales recently. The American Honey offshoot last year grew a more modest 1.8% to 341,000 cases, after achieving double-digit growth for several years prior. Looking to re-energize the franchise, last October Campari introduced American Honey Sting (35.5% abv, $22.99), a blend of the original honey Bourbon liqueur with ghost peppers aimed at Millennials and the shot occasion. “Wild Turkey American Honey is positioned a bit higher than Fireball, so even though we’re still growing at high single digits, that area represents a challenge,” Jean-Jacques Dubau, managing director, North America at Gruppo Campari, recently told SND. “The good news is the strong initial performance of American Honey Sting.”

Heaven Hill’s Evan Williams was up 13% in the U.S. last year to just under 1.9 million cases, and its Flavored Reserves range has been a strong draw for the brand with its Honey, Cherry and Cinnamon expressions collectively growing 18.2% in 2014 to 195,000 cases. “Flavors have been a tremendous add-on, but whisk(e)y isn’t vodka,” says Heaven Hill Brands president Max Shapira. “Only certain flavors marry well with whiskies, and that will limit things, but the existing products are well positioned for continued growth.”

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