But there’s particularly impressive news about American whiskey. American distilled spirits exports exceeded one billion dollars for the fifth consecutive year. Total spirits exports grew 16.5 per cent during 2010. American whiskey, which accounts for 69 per cent of exports, grew 13.6 per cent alone. The biggest export markets are Canada, Germany and the United Kingdom, which nearly doubled in sales to $138.2 million from 10 years ago.
Several factors contributed to this growth. Innovation is a big one. According to DISCUS, more than 1,800 new products have been introduced since 2009. Of course, that figure encompasses many categories: vodka, rum and the rest, but American whiskey producers account for a significant output of new products, which cover the gamut from flavoured novelty drinks to the steady flow of new expressions of longstanding brands.
“Jim Beam’s Devil’s Cut is an example of a company that has taken a strong brand and figured out how to take advantage of brand equity and deliver a similar but higher end expression,” David Ozgo, chief economist for DISCUS who computes the industry data, said. “We’re seeing continued development of products that consumers demand.”
Developments in global trade agreements are also increasing demand from consumers around the planet. For instance, when the U.S. Korea Free Trade Agreement goes into effect which, at time of publication, was projected to happen in late February, the 20 per cent tariff on Bourbon and Tennessee whiskeys in Korea will be eliminated.
On December 21, 2011, the World Trade Organisation issued its final ruling that the Philippines’ excise tax on import-ed distilled spirits was discriminatory, not to mention in violation of WTO rules. The elimination of that tax, which was 43 times greater than the tax on domestically-produced spirits, marks the removal of a major trade barrier with this country, which has a thriving spirits mar-ket valued at $3.4 billion.
DISCUS officials made a point to remind that international growth has, in part, been an off-shoot of the agency’s eight year partnership with the United States Department of Agriculture’s Market Access Program, an initiative that pro-motes American spirits in over-seas markets.
“Many of the promotions we have done have indeed focused on emerging markets for US spirits exports, such as China, Brazil, Vietnam, India, and Russia,” said Christine LoCascio, senior vice president of international issues and trade. “Our efforts in these markets seek to educate members of the hospitality industry and the media on the history, sophistication and unique qualities of American spirits, particularly whiskeys.”
With the persistent resurgence of rye, there is plenty of history and heritage to be promoted, at home and abroad. Rye is categorised with the other whiskies, but when looked at on its own, sales of the spirit are up 50 per cent, an extraordinary development, Ozgo noted.
The big story last year was the astounding growth of of Irish whiskey. Jameson, the main driver of the category, which was sell-ing 115,000 cases a year in 1988 when Pernod Ricard purchased it, hit the million case mark in annual sales in 2010. There’s no sign that the thirst for Irish whiskey will be quenched any time soon. Volume was up 24 per cent to 1.7 million cases, making it larger than the Scotch malt category by volume.
The demand for higher end products is returning as the economy crawls out from under the recession’s heavy shadow. That bodes well for the single malt category, since it generally skews to the higher end, but it also bodes well for Bourbon.
“With good Bourbons overseas competing with Scotch whiskies or Cognac, they really do quite well,” Peter Cressey, president and CEO of DISCUS, said.
There was the bit of news that rum, vodka, brandy, tequila and whiskey makers can all appreciate equally. Volume growth across spirits categories has cut into the market share of beer and wine. The spirits industry’s mar-ket share of revenue grew from 28.7 per cent to 33.6 per cent since 2000, which translates into $2.9 billion. Compare that to beer, which went from 55.5 per cent to 49.3 per cent of the revenue mar-ket share from 2000 to 2011. Looks like beer drinkers are putting down their pints and trading up.