All up for grabs?

All up for grabs?

Are premium bourbons better positioned to snap up new drinkers, or can Scotch and American whiskey both flourish side by side?

People | 03 Mar 2006 | Issue 54

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The Participants: Roy Evans (RE) Sazerac Jim Long (JL) Chivas Brothers Dave Broom (DB) Whisky Magazine Bill Samuels (BS) Maker’s Mark Q: A couple of bourbon companies have recently expressed the view that premium bourbon is on the edge of a major breakthrough because affluent upwardly mobile drinkers are discovering it. Unlike Scotch,they say,it has no negative baggage. Is this a fair viewpoint or are there other factors at play?BS: I travel over to Europe about every two years so that provides quite a good snapshot of what’s happening. Change may have been gradual but I get to see it in two year gaps and certainly I feel that in markets like the one in the United Kingdom premium bourbon is on the cusp of a major breakthrough. It’s different enough to have an appeal over Scotch.RE: I think the question is valid but I also think the prospects for both whisky and bourbon do look exciting. Though I have to say that my view on whisky is based more on instinct than direct experiences.JL: There can be no doubt that premium bourbons are surfing on a wave of interest that has been driven by both the success of some major brands bringing people into the category, and by taking their share in the revolving trends of boutique spirits. Many Scotch brands have also enjoyed the attention of the young and affluent and are dependent on market and brand in a similar way. So ‘baggage’ is not the issue if the approach to these consumers is right. An interesting question is whether premium bourbon can emulate Scotch whisky’s success in ‘going on’ and building cohesive and understandable ranges to support the breakthrough to greater volume.DB: I would say that affluent, upwardly mobile drinkers have no qualms about drinking Scotch. They're drinking malt!Blended Scotch (certainly in mature markets such as the United States and UK) does have a poor image, but that's not the reason that these drinkers are turning to bourbon. They are doing that because the bourbon industry has, over the past decade or so, built quality, flavoursome brands and are now actively selling them. People are drinking premium bourbon because they like the taste! It would be good to see some active promotion of these brands in export markets such as the UK. Where's Wild Turkey??! That said, we mustn't get too carried away. A'major breakthrough'? What do you mean by that? Every distiller I've talked to is saying there isn't sufficient stock to cope with projected demand. It may have made a breakthrough in image among some influential consumers, but the volumes simply are not there to build serious momentum. Yet. Turning back to Scotch's apparent negative image. The reason for this in the UK is the savage and idiotic price slashing which has continued for more than a decade in the supermarkets. This has reduced blended whisky to the status of a commodity. There's precious little that can be done to revive its image once that happens (malt beware!) But who is drinking Scotch in China? The young and affluent. In other words, in new markets where there is no "baggage," Scotch is appreciated for a) its premium image and b) its flavour.Q:Is the split between bourbon and Scotch or is it between older brands and ones that appeal to younger drinkers,whether they’re Scottish or American?BS: It’s between products that are good, are made with care using fine ingredients and don’t cut corners and can prove their heritage and those that are not so good. People are looking out for quality. Just being new isn’t enough. It’s been said about Maker’s Mark that our achievement isn’t so much what we’ve done as what we’ve resisted doing. We haven’t come up with any new products just to be fashionable. We have stuck by one product and introduced people to its quality. A new brand might come along any day, but if it tastes bad then it won’t survive.JL: That’s right. A new name, Scotch or bourbon, can easily enjoy its 15 minutes of fame but needs to be careful it is not easily replaced by the next new kid on the block. The long term and wide success of Scotch is supported by heritage, authenticity and range that underpins its offering and has shown Scotch can endure over the long term. Some bourbon brands have excellent credentials in this field which will be important in the long term. Scotch can compete in this. What the success of premium bourbon has shown is that all whisky brands can win new fans by making themselves relevant to today’s changing consumers – this is an ongoing challenge for Scotch as much as bourbon. But all can learn the lessons of underpinning this success with a foundation of heritage, authenticity and a clear range to support long term growth.DB: I think we've seen a generational and global shift in people's conceptions of what a drink is. My father was a whisky drinker. He didn't drink wine, or gin, or sherry or beer. Those days have gone. The younger drinker is a portfolio drinker. What matters (I hope) is flavour and quality. Both bourbon and Scotch can theoretically benefit, but let's not be complacent. There are plenty of other categories also wanting to try and get a share of this drinker's wages.Q:Marketing people speak of portfolio or repertoire drinking. Can this apply to whisky so that a style drinker might be attracted to both quality Scotch and to premium bourbon?DB: Yes though I think 'style' is not necessarily the right term to use. Premium is. Neither should firms hide behind the
portfolio answer for any loss in volume. The 30+ group is interested in premium products: they will drink Champagne, red wine, aged rum, premium vodka, Cognac, premium bourbon and malt.BS: I see no reason why folks shouldn’t buy in to the idea of both. Certainly we’re seeing people over here prepared to try premium bourbon because they appreciate what it takes to make it in the same way as they understand Scotch.JL: In terms of repertoire, I think drinkers can easily switch between categories, however many will find a certain 'comfort
zone' that will favour a few, often well known, brands from either category.
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