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Marketers Aiming To Reverse Blended Scotch’s Slide With Array Of New Initiatives

December 29, 2015

While single malts continue to surge in the U.S. market, it’s been a different story for blended Scotch, which has declined in the U.S. every year since 2005, and is roughly 15% smaller than it was back then. The blended segment’s leading players are aiming to reverse the downward trend by unleashing a raft of new initiatives.

This fall, Diageo launched category leader Johnnie Walker’s largest marketing campaign to date, “Joy Will Take You Further,” as well as a new series of limited edition whiskies called Select Casks. Diageo North America Scotch whisky director Brian Cox told SND that the new positioning represents “the biggest single reboot of the brand in some 15 years.”

With its new campaign expected to reach 270 million consumers in 50 countries within its first few weeks, Johnnie Walker unveiled the Select Casks project with a Rye Cask Finish retailing around $45 a bottle. The 10-year-old, 46%-abv blend was matured in first-fill American oak and finished in rye casks to impart a spicy component. “We’re considering Select Casks as an annual limited edition,” says Cox, noting that Rye Cask Finish is launching in all U.S. markets in significant quantities.

Second-ranked Dewar’s—which Impact Databank projects to gain category share in 2015 despite a flat-to-down performance—recently launched a new Bourbon-influenced offering, Scratch Cask, retailing around $26 a bottle. Borrowing a technique from Bourbon-making in which barrels are scratched after charring, Scratch Cask is a blend of up to 40 single malts and single grain whiskies matured in oak casks for a minimum of four years. The blend is then married in both Bourbon casks and virgin oak, which are heavily charred and scratched to alter the flavor before finishing. Brand-owner Bacardi is targeting younger LDA drinkers with the newcomer, especially in the on-premise segment.

Chivas Regal has also been active on the new product front, introducing an 80-proof entry matured in Oloroso Sherry casks called Chivas Regal Extra ($40), the brand’s first new global expression since 2007. Pernod Ricard is looking to generate some new momentum behind Chivas, which was recently overtaken by portfoliomate The Glenlivet as the fifth-largest Scotch brand stateside.

Along with Johnnie Walker, Diageo also owns the fourth-largest brand in the category, Buchanan’s, which has been blended Scotch’s most dynamic player in the U.S. lately. An Impact “Hot Brand,” Buchanan’s has doubled since 2010 to surpass 400,000 cases, leveraging its strength among Hispanic consumers. The brand’s 12-year-old, 18-year-old and Red Seal expressions—retailing from around $40 and up—are all contributing to the upswing. While Buchanan’s rise appears to have slowed in 2015, it remains one of blended Scotch’s best performers.

“Buchanan’s has had more than a decade of consistent double-digit growth. It has broad appeal across different Hispanic segments—from Dominican consumers to first- and second-generation Mexicans, for example,” Cox notes.

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