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Single Malts Gain Favor With U.S. Consumers, But Tariffs, Pandemic Raise New Challenges

November 9, 2020

U.S. interest in single malt Scotch whisky has never been higher than it is right now. According to Impact Databank, category depletions are nearing 2 million cases after expanding at an annual rate of 5.5% over the past five years. Marketers are catering to the increasingly sophisticated consumer base with an array of new offerings highlighted by innovative cask finishes and limited edition bottlings, while addressing the challenges raised this year by the pandemic and new U.S. tariffs on single malts.

“I see rare releases and limited edition releases with unique finishes and cask types continuing to play a role in creating excitement around the category,” said Michael Giardina, director for the Glenfiddich at William Grant & Sons. He points to Glenfiddich expressions like Winter Storm, a 21-year-old whisky finished in Canadian ice wine barrels, and Fire & Cane, a peated Speyside malt finished in rum casks, as innovations that expand what single malt Scotch can be while respecting the category’s roots. Glenfiddich, which is above 200,000 cases in the U.S., according to Impact Databank, grew 5.3% in Nielsen channels in the 52 weeks through October 3.

U.S. category leader The Glenlivet—which is closing in on a half-million cases—has made inroads with its Founders Reserve offering, which earned Impact “Hot Prospect” honors for its 2019 performance. Pernod Ricard-owned Glenlivet jumped 22% in Nielsen channels in the year to October 3. “The Glenlivet has been on a mission to break the conventions of the single malt category to open up the brand to the next generation of consumers,” said brand director Patrick Caulfield. “We began when we launched Founders Reserve in 2016, which started to attract younger consumers, both male and female.”

Caulfield is confident that Glenlivet Caribbean Reserve, launched in May, also will bring new consumers into the category. Caribbean Reserve is gaining early traction among multicultural consumers, particularly within the Latino community, he added. Pernod Ricard portfoliomate Aberlour is likewise among the top single malts in the U.S. Last year’s Aberlour A’bunadh Alba Batch 1—matured entirely in ex-Bourbon barrels—earned the No.-5 spot on Whisky Advocate’s Top 20 Whiskies of 2019.

With the pandemic complicating matters this year, Edrington Americas has pivoted on The Macallan to increase online and social outreach to consumers. “We’re seeing continued annual growth and success in our Double Cask 12 Years Old expression,” said Samantha Leotta, brand director Americas at The Macallan, adding that The Macallan Estate, The Macallan Classic Cut 2019 Vintage, and other limited releases have also driven growth for the brand, which is approaching the 300,000-case mark.

Among other leading brands, Moët Hennessy USA’s Glenmorangie (+14%), William Grant-owned Balvenie (+14%), and Beam Suntory-owned Laphroaig (+18%) all rose by double-digits in Nielsen channels in the year through October 3, while Diageo’s leading malt, Oban, was up 2.4% after strong double-digit growth in 2019.

While single malt has been markedly expanding in the U.S., the 25% tariff introduced last fall threatens to derail its growth. “Unfortunately, the single malt Scotch whisky and American whiskey categories have been pulled into a dispute that has nothing to do with our individual product sectors,” said Leotta. “We’ve been working with our industry trade groups including DISCUS and the Scotch Whisky Association to continue to lobby our respective governments to remove tariffs and return to the tariff-free trade sector enjoyed for the past 25 years.”—Shane English

 

Top 10 Single Malt Scotch Whisky Brands in Control States
(mixed cases)
Rank Brand Importer YTD Through September
2019
YTD Through September
2020
Percent
Change
1 The Glenlivet Pernod Ricard USA 41,338 46,334 12.1%
2 Glenfiddich William Grant & Sons USA 23,689 23,605 -0.4%
3 The Macallan Edrington Americas 22,324 21,187 -5.1%
4 Glenmorangie Moët Hennessy USA 15,608 18,740 20.1%
5 The Balvenie William Grant & Sons USA 14,080 12,589 -10.6%
6 Laphroaig Beam Suntory 10,218 11,133 9.0%
7 McClelland’s Beam Suntory 10,612 9,982 -5.9%
8 Ardbeg Moët Hennessy USA 5,033 7,680 52.6%
9 Aberlour Pernod Ricard USA 3,963 5,078 28.1%
10 Lagavulin Diageo North America 5,117 4,794 -6.3%
Total Top 10 151,982 161,122 6.0%
Other Brands 42,820 46,467 8.5%
Total Single Malt 194,802 207,589 6.6%
Source: NABCA and IMPACT DATABANK © 2020
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