Impact Seminar: Heaven Hill’s Kate Latts On Bourbon’s Future, And SMWE’s Ted Baseler On Building A Fine Wine PortfolioMarch 19, 2018
Speaking at the recent 42nd Annual Impact Marketing Seminar, Heaven Hill Brands vice president of marketing Kate Latts detailed how far the Bourbon category has come in the past few years—and how high it can climb looking ahead—in her address titled “The Future of Bourbon in America.”
“Now at over 33 million 9-liter cases globally, the American whiskey category has seen 30% volume growth over the past four years,” Latts noted. “Revenue growth over these same four years has been $1.2 billion, pushing the total category close to $4 billion in value.”
Latts explained that a convergence of favorable trends—a focus on authenticity, craftsmanship, and classic cocktails—has brought the once-sleepy Bourbon category to the forefront of the drinks industry. The super-premium segment of whiskies has played a major role in the upswing, with offerings retail priced above $25 a 750-ml. now above 5 million cases in the U.S.—representing an increase of nearly 3.3 million cases since 2010.
Latts noted that Bourbon’s appeal to consumers is reflected not only in the booming sales figures but also in the skyrocketing tourism segment. The Kentucky Bourbon Trail has seen tourism balloon, growing 90% from 2014 to 1.2 million visitors last year, with 70% of visitors traveling to the area from out-of-state.
While Latts’s speech was celebratory throughout, she saved her boldest prediction for last: “In the next 10 years, Bourbon will become as ubiquitous as Coca-Cola,” she said, citing the potential for international growth and the changing demographics of Bourbon drinkers as reasons to bet on the category. Today, 33% of Bourbon consumers are women and 20% are multicultural, while half of drinkers are between 21 and 44, with 33% younger than 35.
Turning to the wine category, Ste. Michelle Wine Estates president and CEO Ted Baseler discussed “Partnering to Build a Distinctive Fine Wine Portfolio.” Baseler’s address detailed the successful industry relationships that have facilitated Ste. Michelle’s “string of pearls” strategy, in which each of the company’s wineries maintains its own winemaking team, vineyards, visitor center, and product lineup.
Baseler observed that Ste. Michelle’s long-term decentralization strategy has paid off, with the company’s U.S. volume rising from 6.6 million cases in 2010 to above 9 million cases today. Ste. Michelle, he noted, boasts the No.-1 Riesling brand in the country under its flagship Chateau Ste. Michelle label, a top-seller in grocery stores. Baseler also cited other key brands within the Ste. Michelle portfolio and enumerated their achievements, including Washington-based labels Columbia Crest—which, in 2009, became the only Washington wine to reach the top spot on Wine Spectator’s Top 100 Wines list—and 14 Hands, a restaurant-focused brand that became the fastest Washington label to reach 2 million cases.
Looking to the future, Baseler touched upon Ste. Michelle’s recent innovation spree, referencing new brands like Merf, Borne of Fire, Intrinsic, and The Pundit. While the latter three offerings are already on the market—with Intrinsic in particular seeing a strong response, climbing quickly to 130,000 cases of production—Merf will debut this summer. The new entry, made by veteran winemaker David “Merf” Merfeld, includes a Cabernet Sauvignon and Chardonnay, both sourced from Washington’s Columbia Valley.—Shane English & Julia HigginsSubscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning.