USA: Land of Opportunity

27th September, 2012 by Chris Mercer
Irish whiskey

Irish whiskey brands are out in force

Back home, the surging growth of flavoured whiskeys shows no sign of slowing. In June, Diageo announced a deal to acquire the Cabin Fever maple-flavoured whiskey brand from the Robillard family in the US.

That said, overlook vodka at your peril. Increasingly seen as a little passé by some, Euromonitor International figures have vodka volume sales pegged to increase by 10% in the US from 2012 to the end of 2016.

Analysts at Sanford Bernstein highlight that dessert-flavoured vodkas, such as the Pinnacle Whipped line recently acquired by Beam from White Rock, “are doing exceptionally well”.

Purity vodka founder Thomas Kuuttanen is similarly optimistic about the future of the top end of the market. “The ultra-premium segment of vodka is small, but we do see a consistent growth,” he says. “In the past, all brands were industrially made, neutral vodkas.

“As more hand-crafted, small batch brands such as Purity vodka have been launched, consumers have discovered the difference a high-quality vodka makes in cocktails.”

And Kuuttanen believes this trend will give a much-needed boost to the diversity of the sector as a whole, adding: “There are already too many taste-alike vodkas out there, yet too few interesting ones.”

Irish whiskey renaissance

Of all the categories, though, Irish whiskey is the one with real fire in its belly. Euromonitor researchers predict the sector will expand by 25% in volume within five years, albeit to a mere 21m litres – still a drop in the vodka and Scotch oceans. Yet, with William Grant taking Tullamore Dew and Beam snapping up Cooley, competition is hotting up.

Everyone, Pernod Ricard included, is keen to expand the sector beyond Jameson. The Jameson juggernaut, of course, cannot be ignored and is set to hit 1.5m cases in the US alone in Pernod’s fiscal year to the end of June.

“We’re still only just scratching the surface in many states,” reports Brendan Buckley, innovation and category development director at Irish Distillers (IDL). “Nevertheless, we’re looking at how we can optimise growth in the category in general.” At a global level, the firm remains committed to launching two new whiskeys every year.

Intriguingly, IDL’s Powers brand is growing volumes by 20% a year in the US thanks to a cult following that should send sales “well over” 50,000 cases this fiscal year. Then there is the firm’s single pot still range, much of which is on allocation due to limited stocks but which is being “prioritised” in the US.

Single pot still brands like Redbreast have “exceeded expectations”, but are projected to grow in a “gentle curve” until more spirit comes on line in several years’ time, Buckley says.

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