Whisky Magazine Issue 119
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Fred looks at the ever increasing demand for line extensions
Bourbon is booming. In 2013, American distilled spirits earned $1.5 billion in exports with bourbon and Tennessee whiskey accounting for more than $1 billion. The Distilled Spirits Council also reported whiskey “paced” the U. S. domestic $22.2-billion supplier sales, a growth of 4.4 per cent.
This big money news coincided with the Suntory purchase of Jim Beam for a lofty $16 billion and the Kentucky Distillers Association announcement of a record 630,000 Kentucky Bourbon Trail visits.
For a good month, the mainstream media focused on bourbon growth. Fortune magazine featured Bourbon on the cover, while investor websites drooled over the possibilities of quick profits in Diageo and Brown-Forman stocks.
Hidden in the “buy now” stories was not-so-subtle praise for the spirit industry's fastest growing segment—flavoured whiskey.
“Tennessee whiskey grew 10% over the first six months of its fiscal 2014 year with a global rollout of its Tennessee Honey — the first flavoured Jack Daniel's product — helping to push net sales higher by 30%,” wrote American investor website Motely Fool.
According to 2012 Nielsen research, flavoured whiskey represented 75% of the growth in all whiskies. Thus, investors see flavoured products as innovative and an opportunity to cash-in big.
“New flavoured whiskeys are also driving category growth,” said Peter McDonough, chief marketing and innovation officer of Diageo North America, in a recent investor's call. “Fl...