It is happy hour in the liquor aisle as flavored line extensions, high-end limited run products and a proliferation of locally distilled craft/artisanal products are turning heads in the spirits category.
“The market has changed over the last few years and is now really dominated by the growth of whiskies—the brown spirits,” says Eric Schmidt, director of alcohol research at Beverage Marketing Corp., based in New York. “In fact, 2014 was the first time in almost 30 years that brown spirits outpaced clear spirits—vodka, gin, rum.”
That is because flavored whiskies are bringing new consumers to the whisky category, Schmidt says. “Before we started to see the influx of cherry, apple, honey and other flavors to whiskey, the ‘entry’ whiskey was Irish whiskey because it is kind of light and does not have the peatiness of Scotch,” he says.
Due to its heavier nature, there is a narrower spectrum of possible flavor extensions for whisky than vodka, Schmidt notes. “We are not going to see gummy bear- or whipped cream-flavored whisky,” he says. “Honey, cinnamon, maple, apple and blackberry are popular whisky flavors, but there is not a lot more one can do with it.”
Black Velvet, the No. 2 selling Canadian whiskey in the U.S., is among those expanding its flavor portfolio.
“Our more recent additions—Cinnamon Rush and Toasted Caramel—brought new and existing consumers something fresh for the brand and continue to drive results for the Black Velvet franchise, but at this time Black Velvet is focused on delivering the consistent quality product our loyal consumers have come to expect from the existing portfolio,” says Chloe Pfeiffer, manager, public relations, global imports and spirits at Constellation Brands, based in Victor, N.Y.
“With the premiumization of the whisky category, Black Velvet Reserve is refreshing its package to better communicate the exceptional quality of the liquid in the bottle,” Pfeiffer says, noting that the package, which debuted this spring, communicates Black Velvet’s quality and refinement with a clean capsule design; highlights the aged eight years distinction with a gloss logo on the capsule; and reinforces Black Velvet’s smooth taste profile through a soft-touch varnish on the label.
To capitalize on the flavor trend, last fall Constellation introduced a new brand—Serpent’s Bite. “Serpent’s Bite is an apple flavored whisky that directly addresses two hot trends: the rise in popularity of flavored whisky and the rapid increase in sales of hard cider.”
Pernod Ricard USA has found a way to take advantage of both the booming whiskey and craft beer trends with a single product—Jameson Caskmates, Jameson Irish whiskey finished in stout beer barrels, introduced in July 2015.
“This release has greatly surpassed all expectations and ended the calendar year as one of the top innovations in the spirits industry, despite only being available for half the year and in limited availability,” says Mitch Cristol, trade marketing director at Pernod Ricard USA, based in New York. “The great news is that the availability for Caskmates is being expanded in the second half of 2016. This unique way of finishing Jameson Irish Whiskey in stout beer barrels imparts the rich stout characteristics of coffee, cocoa and a gentle hint of hops.”
Another new product Pernod Ricard is finding success with is Olmeca Altos Tequila. “Olmeca Altos Tequila competes in one of the fastest growing segments in the spirits category, super premium tequila, and is growing at 55-percent-plus over the last 12 months,” Cristol says. Olmeca Altos is available in Plata, Reposado and Anjeo varieties.
According to Schmidt, retailers should clear some shelf space for craft distilled products, another driving trend. “Where it is legal in grocery, you have to hand-sell it because you have to educate consumers about what the brand is about to get some traction,” he says.
Sugarlands Distilling Co. is billing its line of Tennessee moonshine—packaged in glass Mason Jars—as a finely crafted artisanal product. Three of its newest flavors—Root Beer, Peppermint and Mark and Digger’s Rye Apple—each won a silver medal at the 2016 San Francisco World Spirits Competition.
Sugarlands is a hit in other ways too. The company started production in March 2014, currently produces 14 flavors and is distributed in almost 20 states; up to one million people a year visit its Gatlinburg, Tenn., distillery. It has also inked a deal with the Discovery Channel show Moonshiners to develop four additoinal moonshine varieties.
“Moonshine is a very versatile liquor, and we work hard on our flavors,” says Jay Miller, public relations coordinator for Sugarlands Distilling Co., based in Gatlinburg, Tenn. “We have all-natural flavoring and our distillers work very, very hard at perfecting those tastes. We present a recipe and they come up with something that we can sell nationally that is true to the flavor.”
Manufacturers say retailers need to reach out to adult consumers to build sales and better compete against liquor superstores.
“We work to provide added value through tie-in partners, digital extensions, like sweepstakes, gift boxes and on-pack usage suggestions, like cocktail recipes,” says Pfeiffer. “Our brand objective is to create an impactful, cut-through identity, from bottle to shipper to collateral that translates into merchandising on the floor, the shelf and beyond.”
Retailers should carry the leading brands and most popular sizes, Cristol says. “Merchandise spirits to drive impulse purchases and make it easy for your shoppers to get everything they need for their entertaining occasions by cross-merchandising with seasonally relevant products and drink solutions highlighting cocktail products to inspire your shoppers,” he says.