North American Whiskey

North American

Whiskey
upgrades
In an increasingly competitive Australian
spirits market, North American whiskey
is managing to premiumise itself and
quietly discard its reputation as a coke
mixer while still pulling healthy sales
numbers, Maurizio Corda reports.

hile there are a number of crucial differentiations between

North American whiskey and Scotch and Irish including the
spelling of whisk(e)y, ingredients, regulations of production
and flavour profile one of the most striking differences, at least in the
Australian market, is the way it is or better was consumed. Scotch and
Irish whiskies tend to be consumed more often sipped neat, on ice or with
a splash of water, whilst bourbon and rye whiskies are more often used in
mixed drinks or other types of cocktails. In Australia, bourbon is often linked
to the bourbon & coke mix and it wasnt until recent years that it has
started being consumed in different cocktails or appreciated neat or with a
splash of water like its European counterparts. Quality bourbons these days
are put through a rigorous production process to ensure premium quality.
It is not unusual that premium bourbons are aged for more than eight
years one year of maturing in Kentucky is said to be equivalent to four
years in Scotland - with master-judging panels ensuring the quality of the
final product by tasting every single barrel before bottling and distribution.

Premiumisation of bourbon
The increased quality offered by North American distilleries has stimulated
a growth in premium bourbon offerings and consequently the premium
bourbon sector has experienced a rise in recent years. The North American
Whiskey (NAW) category is experiencing MAT flat growth, however growth
in the premium NAW category is a key trend, said Ray Noble, brand director
Jim Beam, Beam Global Australia. Premium bourbon sales represent over
581,000 nine-litre cases up until March 2011 (MAT), the highest selling
premium spirit as a category in the Australia market and the sixth in the
combined list, behind standard Scotch, vodka, standard bourbon, liqueurs
and dark rum. The combined standard and premium bourbon figures for
the same period threaten the combined standard and premium Scotch
category, with bourbon totalling over 1.4 million cases against Scotchs 1.5
million (data from the Liquor Merchants Association of Australia Spirits Sales
Service). Australian consumers in general have seen the bourbon category
as a bourbon and coke drink combination, nothing more, nothing less, said
Blake Kramer, brand manager, SouthTrade International. However we are

40 drinks trade

Image courtesy of Star City Casino

seeing a shift in consumers behaviour towards premium products and classic

cocktails. Consumers now want to enjoy good quality bourbon like they have
enjoyed a good cognac or Scotch whisky, neat or in a cocktail, he added.

Sophistication of consumers
Thanks to the shift towards premiumisation and NAWs great versatility, the
Australian consumer has embraced several more ways to consume it rather
than the classic bourbon and coke mix. More and more people are enjoying
premium bourbon on the rocks or with a splash of water a pleasure usually
reserved to Scotch and Irish whiskies. However, if you want to explore
the taste of bourbon as a mixer, you can choose from a variety of cocktails
including the Manhattan, Old-Fashioned and Mint Julep just to name a few.
There is always room for experimenting with bourbon bearing in mind that
some bourbons are more versatile than others and youre likely to find
many versions and variations of these classic cocktails. A very good place
you might want to check out is the new Star City Casino venue Rock Lily, a
rock venue which is set to showcase the new way of consuming NAW at its
best. We are very passionate about our tequilas and American whiskies,
said Dan Woolley venue manager at Rock Lily. We offer over 100 different
tequilas and an impressive selection of American whiskey. Rock Lily and
Star City Casino have recently partnered with Brown-Formans Woodford
Reserve to create a premium bourbon via a live satellite blending session
with one of the distillers from Kentucky a session Drinks Trade was lucky
to be part of with the newly-created bourbon to be exclusive to Rock Lily.
Additionally, an increased interest from female customers is helping this
sophistication in bourbon consumption to take place. Makers Mark is an
incredibly versatile spirit and a popular choice for cocktails that both males
and females can enjoy, said Trent Chapman, brand director growth brands,
Beam Global Australia. Easy to drink, Makers Mark is a soft, yet full-flavoured
bourbon whiskey, making it the ideal spirit choice for a variety of cocktails. An
interesting group formed in Kentucky, called Bourbon Women and founded
by marketing executive Peggy Noe Stevens, is receiving a lot of traction with
hundreds of members expected to have joined by the years end, thanks in
part to the industry evolving towards higher quality, small-batch offerings.

Market snapshot
Even though Australia has historically been one of the best international
markets for North American whiskey, consumption is somewhat stagnant
this financial year with year to date figures showing 993,444 nine-litre cases
purchased in Australia, a slight decrease of four per cent compared to 2010.
Standard bourbon totals for over 876,000 nine-litre cases (MAT to March
2011), while premium bourbon represents over 581,000 nine-litre cases, the
highest selling premium spirit as a category in the Australian market, losing
out to only vodka and scotch. When paired with its overseas counterparts
(Scotch, Irish etc) whisk(e)y becomes the highest selling spirit in Australia
nearing three million nine-litre cases sold (LMAA Spirits Sales Service). In the
RTDs field, pre-mix bourbon trumps pre-mix vodka its closest competitor by
a large margin with 13.887 million cases against 5.1 million. Despite figures
showing flat growth for the category this year, some of the biggest brands
are experiencing substantial increases. McKenna is performing well in the
Australian market, growing six per cent according to Nielsen (Vol. MAT to Feb)
in a total bourbon category declining two per cent whilst standard bourbon is
declining seven per cent said Demetrius Giouzelis, senior brand manager
for McKenna Bourbon. Both Australia and New Zealand are two of the
strongest markets in the world for McKenna, he added. Jim Beam Black
(full strength) is growing ten times faster than the premium NAW category
(SOURCE: LMAA Growth 2010 vs LY), while the RTD has experienced growth

drinks trade 41

North American Whiskey

of 28 per cent year-to-date well ahead of the premium NAW category which
has experienced growth of approx 15% (SOURCE: LMA Growth 2010 vs LY),
said Ray Noble. Similarly to most other bourbon brands including Makers
Mark, Jim Beams largest market outside the United States is Australia. In
Australia Jim Beam accounts for one in every 10 glasses of spirits poured,
one in every five premix RTDs consumed and it is estimated that at least one
six-pack of Jim Beam is purchased every 1.3 seconds, added Ray Noble.

Challenges: how to stay competitive

Facing competition in all fields from Scotch and Irish whiskies, vodka and vodkabased RTDs, North American whiskey as a category has an extensive trade and
brand activity planned for the remaining part of 2011. First of all, it can boast
a significant presence in the Australian media, with North American whiskey
brands totalling 4485 ads nationally, including all formats and bottle sizes, from
January 1 to March 31 2011. Almost 56 per cent of all ads were placed between
NSW and QLD, clearly the focal sub-markets for North American whiskey in
Australia. We (McKenna Bourbon) are facing continued competition from
leading Scotch whisky brands as they try to regain their position as the number
one spirit category by recruiting younger bourbon drinkers, said Demetrius
Giouzelis. Additionally, increased competition has somehow degenerated
into a price war, representing one of the major challenges for the category
this year. Recently Jim Beams competitors have lowered their price points
and ABV, positioning their products toward the mainstream, said Ray Noble.
As market leader, Jim Beam has seen this as an opportunity to invest in the
premium NAW category and drive growth and category value through Jim
Beam Black. Similarly, Blake Kramer has emphasised on highly competitive
promotions when talking about challenges for the category. There have
been heavy promotional campaigns and price wars (two for $70 or $10-15
discounts on RRP) over the last year which made launching a premium bourbon
into a very competitive and price focused market difficult, he stated. To
overcome competition obstacles, the major North American whiskey brands
are going to launch interesting sponsorships, trade activity and consumer
promotions. Canadian Clubs Over Beer campaign is continuing this year,
increasing brand awareness, with the brand introducing the CC Schooner,
an extension of the Over Beer campaign. Powerhouse Jack Daniels has
offered the chance to win a trip to Bali to see a concert by Good Charlotte.
The Facebook-only competition was free to enter and was valued at $6000.
SouthTrade International is the mastermind behind the Liquid Miles trade
program, which focuses on the promotion of five of its brands including Buffalo
Trace through consumer education and tasting events. In 2011, Jim Beam
will maintain its relationship with its sponsored NRL clubs Newcastle Knights,
Penrith Panthers, Manly Warringah Sea Eagles, Parramatta Eels and the Cronulla
Sharks, as well as continuing its association with live music. It also introduced
The Dilemma, an extension of the hugely popular The Bourbon campaign,
supported by through-the-line activity, including; free-to-air and Pay TV
and social media promotions, while Makers Mark rolled-out a global
initiative titled The Mark Of its largest ever duty-free execution in
Australia at Sydney and Melbournes International Departure Lounges.
As you can see, there is a lot happening in the whiskey segment
in Australia. Fuelled by an increased interest in exclusive premium
quality offerings, the upgrade in bourbon, the stellar performances of
many brands and the recent educational programmes, the American
whiskey segment will remain one of the biggest spirits categories
and is expected to grow even more over the next few years.

42 drinks trade

Best cocktail recipes:

Here are some interesting cocktails featuring
the best American whisky brands. From
downright classics to new interesting
mixes, there is plenty to choose from!
Makers Mark Milk Punch
45ml Makers Mark
30ml BOLS white crme de cacao
30ml milk
30ml cream
Garnish: fresh grated nutmeg

McKenna Julep
60ml McKenna bourbon
3 peach slices
6 mint leaves
Garnish: mint sprig

Buffalo Trace Manhattan

with Meat
60ml Buffalo Trace Bourbon
15ml Sweet Vermouth
2 Dashes of Whiskey Barrel
aged bitters

Campari Lo-FI THC

(with Wild Turkey and American

Honey)
30ml Wild Turkey
30 ml American Honey
30ml Campari
Dashes whiskey bitters
Sugar cubes dissolved
Garnish with orange twist.

Southern Comfort Frozen

Southern Hurricane
60ml Southern Comfort
60ml strawberry Daiquiri mix
30ml orange juice
15ml lemon-Lime soda
15ml grenadine
Garnish: orange wedge and a cherry