CHAPTER FIVE

Emerging trends

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There is an increasing market for what we would call “contemporary Scotch”

The younger consumer

While the whisky category as a whole is strong, two sub-categories are showing disproportionate growth potential.

Both are simultaneously achieving the feat of attracting new drinkers (the discovery and adventure drivers), while at the same time convincing these new converts to trade up and pay more for the quality of the drinks they are enjoying (driving adventure amongst existing consumers).

Contemporary Scotch is a category spearheaded by brands like Monkey Shoulder, Haig Club, Naked Grouse and Copper Dog. These brands are, each in their own way, challenging the conventions of the Scotch category and thriving as a result.

Premium American whiskey, meanwhile, led by brands like Maker’s Mark, Gentleman Jack, Bulleit Bourbon and Woodford Reserve, is a category that is successfully introducing a new audience to US whiskey and presenting a premium alternative to the mass-market brands.

Through cocktails in particular, these whiskies are engaging a new generation of drinkers and present a significant value opportunity for the off and on-trade alike.

Contemporary whisky

sales value growth

+32%

£43m total value

Contemporary Scotch

Throwing off the image of Scottish whisky as an “old man’s drink”, there is an increasing market for what we would call “contemporary Scotch” – brands developed to appeal to younger, more adventurous drinkers without the constraints of traditional whisky brands. These are clear examples of brands that are playing on the adventure driver, as relatively new consumers feel they can easily use them to add to their repertoire.

Rather than focusing solely on history and heritage, or on the craft of manufacture, these brands are challenging the conventions of the whisky category, noting the approach taken by some of the mass-market US bourbon brands and the craft beer movement in the way they present themselves.

One would not expect a traditional malt whisky to be served from a cement mixer or in a treehouse at a festival, nor to embrace a cocktail made with craft beer as its signature serve.

This approach was arguably pioneered by brands including William Grant & Sons’ Monkey Shoulder, Edrington’s Naked Grouse and Diageo’s Haig Club with its “Beckham effect”.

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It has also been one embraced by brands such as Stillman’s Cask and Copper Dog.

Characterised more by attitude and lifestyle associations than by method of production – whiskies in the contemporary segment are made up of blends, single malts and single grain – these brands have brought a fresh approach to the market.

Across on- and off-trade, contemporary whisky is in healthy growth – up 32.1% overall to £42.6 million in 2018. It is worth noting that many of the brands in this market did not exist ten years ago – demonstrating clear future potential growth.

In the off-trade the volume of contemporary whisky sold rose a staggering 33.7% and value rose 28.7%. This fresh approach to the way whisky is presented is finding particular favour with consumers and attracting a younger audience. In the on-trade, growth was similar as the category saw a 37.2% increase in the value of sales (to £17.4 million in 2018).

The growth demonstrates clear consumer demand for these brands and an opportunity to make whisky more accessible to a wider range of audiences.

Further growth in the on-trade will come from the fact that contemporary whisky has been aimed at the cocktail market. Forward-thinking brands such as Naked Grouse and Monkey Shoulder have created specific serves and have worked closely with bartenders to create new ways to enjoy the liquid.

This fresh approach is driving this category forward and enabling its growth.

Throwing off the image of Scottish whisky as an “old man’s drink”, there is an increasing market for what we would call “contemporary Scotch” – brands developed to appeal to younger, more adventurous drinkers without the constraints of traditional whisky brands. These are clear examples of brands that are playing on the adventure driver.

On-trade whisky

value growth

+32%

£43m total value

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Premium American

While US whiskey sales are led by two mass-market leaders (Jim Beam and Jack Daniel’s), there is a growing interest amongst drinkers in premium American whiskey.

Led by brands including Maker’s Mark, Gentleman Jack, Bulleit Bourbon and Woodford Reserve, this segment of the market is seeing substantial growth. As the two leading brands in the category have pioneered accessible growth, drinkers who have acquired a taste for American whiskey are turning to premium brands to continue their exploration of the wider category.

This is a category that taps into consumer demand for brands that reflect the way they value craftsmanship and heritage – the “craft beers” of the whisky market. They offer consumers “stories to tell” – for example the story of Maker’s Mark’s hand-dipped wax bottles – and hence drive social capital for those who choose them.

In 2018 sales rose by 5.8% overall to make American premium a £125.4 million market in the UK across on- and off-trade.

The off-trade has seen substantial growth as the volumes sold in American premium rose 5.3% in 2018 to 103,580 cases. At the same time, the value in the segment rose by 3.5% in 2018 to make it a £28.8 million market, with no signs that this growth is likely to slow anytime soon.

At the same time, on-trade sales rose an even more impressive 6.5% in value to grow to £96.6 million in 2018 (up from £90.7 million a year prior)
as a result of a 2.5% increase in the volume sold.

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The off-trade has seen substantial growth as the volumes sold in American premium rose 5.3% in 2018 to 103,580 cases. At the same time, the value in the segment rose by 3.5% in 2018 to make it a £28.8 million market.

Off-trade whisky

value growth

+37%

£17m total value