Scotch battles US Bourbon boom

Scotch whisky needs to adopt a more innovative approach if it is to fight off competition from rival categories in the vital US market.

Johnnie Walker’s new Rye Cask Finish expression aims to help broaden Scotch whisky’s appeal

With sales worth £750 million last year according to the Scotch Whisky Association, the US represents the largest export for this spirit. However, while domestic sales of US whiskey are booming – up 28.5% in the last five years, says the Distilled Spirits Council of the United States – the same body reports a -1.3% slide for Scotch sales in 2014.

“Scotch has been left behind in terms of innovation and dynamism,” commented Euromonitor International’s alcoholic drinks analyst Spiros Malandrakis in response to the significant decline seen by this category in the 2015 Power Brands survey, which ranks the world’s 100 most powerful wines and spirits.

After Diageo itself acknowledged that Johnnie Walker, the world’s biggest selling spirit by value, “did not perform well” in the US last year, new product development is being clearly geared towards tackling the threat from this market’s homegrown talent.

Brian Cox, Scotch director for Diageo North America, pointed to the launch of Johnnie Walker Rye Cask Finish later this year, the first in a series of “limited edition wood-finished Scotch blends” scheduled for release by the brand in the coming years.

Explaining this step, Cox told the drinks business: “The success of North American whiskey is attracting new consumers into the broader whisky category, which Johnnie Walker views as an excellent opportunity to continue to experiment and appeal to fans of additional whisky sub-categories.”

Despite its growing popularity in the trend-setting US bar scene, there are signs that Scotch whisky needs to do more to appeal to younger consumers if it is to build sales.

“Not everyone has acquired the taste for Scotch neat, as much as they’d like to think they have, and some are not sure of which style suits their tastes,” observed leading New York bartender Franky Marshall. “Scotch in cocktails is a great introduction for many people.”

Drawing a contrast between the popularity of Bourbon or rye whiskeys for the “shot and a beer” combination that is commonly served in the US, Marshall told db: “For many, Scotch is still considered a ‘special occasion’ cigar accompaniment, rather than a spirit to be enjoyed anytime.”

As a result, she welcomed the “very savvy” move by some producers to align themselves with cocktail culture, an area Marshall suggested could be key to increasing Scotch’s appeal among US consumers. “I think brands should continue to showcase how versatile and approachable Scotch can be,” she advised.

An in-depth look at how Scotch whisky is performing in the US market appears in September’s issue of the drinks business.