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Blended Scotch, Led By Dewar’s And Johnnie Walker, Eyes New Growth Opportunities

December 4, 2019

Blended Scotch eked out a 0.3% increase to nearly 6 million cases in the U.S. market last year, according to Impact Databank. The segment is on a similar trajectory this year, with value rising 1.2% and volume down 3.1% in Nielsen channels in the 52 weeks through October 5. But Brian Cox, vice president of Dewar’s at Bacardi North America, sees the premium-and-above tier prospering against a declining lower end. Dewar’s fueled the trend this year by launching its Double Double series, a Sherry cask-finished range that includes 21-, 27-, and 32-year-old expressions. The 21-year-old recently ranked second among Whisky Advocate’s Top 20 Whiskies of 2019.

Dewar’s, which has hovered at the 1-million-case mark stateside the past few years, also unveiled its 8-year-old rum-cask finished Caribbean Smooth expression ($22 a 750-ml.) in September. “We’ll continue to explore our ability to finish Dewar’s in casks like Tequila, mezcal, cachaça, and shochu, and believe this development will inspire and encourage the future of Scotch consumption in the U.S.,” Cox tells SND.

That experimentation follows a key development earlier this year, when the Scotch Whisky Association (SWA) amended its “technical file” to broaden the cask types allowed and encourage innovation. Under the amendment, Scotch may be “matured in new oak casks and/or in oak casks which have only been used to mature wine (still or fortified) and/or beer/ale and/or spirits.” The amendment still rules out casks that held wine, beer, or spirits that used added sweeteners, flavors, or stone fruits.

Diageo, which was a driving force behind that change, is seeking similar avenues to growth. “A new generation of Scotch whisky drinkers is branching out across flavor profiles and brands,” says Sophie Kelly, senior vice president of whiskies at Diageo North America. “As a result, Scotch represented 25% of Diageo’s net sales and was up 6% in our fiscal 2019. For our blended Scotch brands specifically, both Buchanan’s and Johnnie Walker’s net sales grew 9%.”

Following the success of Johnnie Walker White Walker, which sold 80,000 cases in just a few months on the market last year, Diageo followed up with two more Game of Thrones-themed blends in August, A Song of Ice and A Song of Fire (both $36), respectively. Overall, the Johnnie Walker brand is within striking distance of the 2-million-case mark in the U.S. for 2019, while Buchanan’s is above 500,000 cases.

Pernod Ricard is likewise leaning into innovation with its Chivas Regal label. Most recently, Chivas debuted a limited-edition 13-year-old ($35) finished in American rye whiskey casks. Further experimentation with novel cask finishes is sure to follow as blends look to increase their appeal to the younger generation of consumers.

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