W hisky may be the water of life and most expect that water tocome from Scotland. Overwhelmingly, when consumers thinkwhisky, they think Scotch. The Scotch whisky craze continues,

especially in the super premium category. Sales of high-end single maltswere up 11 percent between 2004 and 2005, according to the DistilledSpirits Council of the United States. That’s nearly as much as super premiumvodka’s growth of 12 percent. And retailers take note: Revenue for singlemalts have edged out vodka.

scotch’snew expressionBy Ryan Malkin

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But it’s not just a numbers game. The con-tinued demand for Scotch can be evidencedby the sheer number of new expressions con-tinuing to hit the market. “There’s beenincreased interest in older, rarer expressionsand more distilleries are coming out withthem to ignite interest in the category,” saysAndrew Nash, marketing director for TheGlenlivet. Or perhaps popularity can bejudged by the sale of the world’s oldest bottleof whisky – a 1937 Glenfiddich – for $20,000,this past April.

Aberfeldy, a newly launched single malthailing from the center of Scotland, “is veryunique in that it is a very balanced malt—which is rare among single malts,” says NedDuggan, assistant marketing manager, BacardiUSA, Inc. “For years Aberfeldy has beenavailable to a select few through the sale ofindividual casks and private bottlings” he says,“but we are expecting a lot more of that asAberfeldy is released in the U.S. in largerquantities this fall.”

In restaurants, it may come as no surprisethat 12 year-olds continue to be the most pop-ular, largely due to customer knowledge, andof course, price. At the trendy Hotel Victor inMiami, Florida, for example, Macallan 12Year Old and Glenlivet 12 Year Old are by farthe best selling single malts. As drinkersbecome more educated, their palates expand.At Hotel Victor, requests have been pouringin for smaller production, boutique brands likeOban and sales of Coal Ila have jumped overthe past year.

McIvor, a boutique brand which is a 5year-old blended Scotch whisky, “is compara-ble to any great 12 year-old Scotch,” saysAlberto Beraha, vice president of BerNiko,

LLC, an importer based in South Florida. Thebrand has been receiving high accolades atrecent spirits competitions nationally as wellas abroad. Beraha believes that they are bring-ing an edge to this market because, at a sug-gested retail price of $12.99, “McIvor is aremarkable Scotch offered at an extremelyreasonable price.” In Beraha’s eyes, it’s notnecessarily price which determines super-pre-mium in this category. “We can bring new lifeinto this market by providing a good qualityproduct for a great price for consumers whowill ultimately become connoisseurs,” he says.

According to James Bruton, marketingdirector, whiskies, Skyy Spirits, LLC, “thereis a strong market for consumers who appre-ciate top quality blends such as Cutty Sark,the ship that first brought the taste ofScotch to America.” He adds, “The con-sumer trend continues to come from the factthat people are drinking less, but also drink-ing better.” Although the numbers have notalways been up, Bruton is enthusiastic aboutthe future of the category as a whole,remarking, “In the U.S., we try to ensurethat we’re always relevant to our core con-sumers because they have never stoppedloving Scotch; the Scotch whisky industryjust needs to give consumers permission tolove the category again.”

Like Bruton, Duggan sings the praises oftop-notch Scotch whisky blends on the mar-ket. “Dewar’s 12-year-old Blended ScotchWhisky was introduced in the U.S. in 2001and is recognized as the fastest-growingdeluxe blend with sales increasing 22% in2005,” he says. “Dewar’s Signature, the ‘ulti-mate expression of Blended Scotch Whisky’,was introduced in 2004 with limited distribu-

tion. Furthering its exclusivity, Signaturecompetes in the super-premium blend cate-gory and is for people who want the best andare willing to pay for it.” Duggan adds that“at the heart of all Dewar’s blends isAberfeldy single malt, giving the blends theirsignature heather-honey aroma and flavor.”

THE APPEAL OF RESERVESPerhaps the biggest trend is the release ofmore reserves, according to JonathanGoldstein, VP of Park Avenue Liquors, oneof the premium Scotch retailers in New York.“Distilleries are mixing younger and olderwhiskies to put out a no age product to pro-tect older whiskies until supply meetsdemand,” he says.

New in the reserves game is Glenrothes,which launched its Select Reserve ($45) inMarch. Glenrothes has made a name foritself releasing vintage single malts, sixteenso far. “The vintage concept was borne out ofcreating a personality for each individualyear,” says brand director Ronnie Cox. Yet, asthe popularity of the brand increased, thevintages were running out and consumersfound the brand out of stock. “The trade wasinterested in having a consistent brand,” saysCox. By combining more mature whiskieswith younger whiskies, Glenrothes created aconsistent product that will be more readilyavailable and more accessible. Cox says thesingle malt market is growing, “so from abusiness standpoint there’s opportunity togrow this brand and as the pie gets bigger, itallows new players to come into the game.”Time will tell whether the Select Reservewill “expand the footprint” of the brand, asCox hopes.

Glenfiddich ("Valley of the Deer") Distillery in Dufftown, Banffshire Scotland Macallan Distillery loacted on Speyside whisky trail in ScotlandClose-up of a copper distillery

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BREATHING NEW LIFE INTO THE CATEGORYMeanwhile, other brands are focusing ondifferent expressions within their lineup torespond to demand. “Our customers arelooking for the rare, new and hard to get,”says Park Avenue’s Goldstein. Glenfiddich,for example, the world’s best-sellingScotch—second in the United States—hasrecently introduced a 21 year-oldCaribbean Rum Cask Finish ($120). Andthe nearby Balvenie distillery, also ownedby William Grant & Sons, just released a17 year-old NewWood finish ($90).According to Phil West, VP of marketingat William Grant & Sons, it’s all aboutoffering “great opportunities for whisky fansto experience something new from a brandthey’ve come to trust.”

Another trustworthy brand with a loyalconsumer following is Chivas Regal. Branddirector Craig Johnson explains, “With a

benchmark brand like Chivas Regal, thechallenge is to continue crafting thekeynote complexity and smoothness withinthe blend. Our introduction of ChivasRegal 18YO has allowed another expres-sion, anchored in older malts and a differ-ent vatting process that allows for othernotes to come through - deep chocolate,toffee and a hint of smoke on the finish.”According to Johnson, “this has been a verysuccessful extension of the brand, rooted inthe craft of the blend and appealing to adiscriminating Scotch consumer who candifferentiate between brands.”

The trend for the older, unique alterna-tives continues at Springbank. “People seekout not just older malts, but are looking forthe diversity that the whisky category has,”

says Henry Preiss, who imports Springbank.“New expressions are the lifeblood forbrands as they keep the interest high in abrand,” he says. “The consumer today loveshis brands and the variations of thosebrands.” For example, Springbank loverswill no doubt flock to the new Longrow 14Year Old ($99), a heavily peated malt;Longrow 10 Year Old Tokay Wood Aged($99); Springbank 25 Year Old, a very lim-ited release ($525); and perhaps even thefirst release from Hazelburn ($89).However, “Hazelburn hasn’t been as popularas I thought it would be,” says Park Avenue’sGoldstein. “Maybe people aren’t makingthe connection to Springbank, or the ageand price is putting them off, or they don’tknow it’s a first release.” But that won’t dis-suade Hedley Wright, Springbank’s owner,from continuing to resurrect other classicmalts from the Campbeltown Region:Kilkerran Single Malt is next.

RARE AND LIMITED EDITION EXPRESSIONSThe trend continues at Bowmore, the old-est distillery on Islay, with the recentrelease of a 16 Year Old “Straight FromThe Cask” expression ($90). This non-chill filtered Scotch is bottled at 51.8 per-cent alcohol. “There is a market forScotch whisky in its most elementalstate,” says Anne Riives, who handles thebrand’s public relations. And over atAuchentoshan, a unique 17 year-oldBordeaux Wine Finish ($119) just hit themarket. Unlike many other “finished”Scotches, the Aucentoshan spends its firsteight years in bourbon barrels, then ninemore in Bordeaux red wine barrels fromSt. Julien.

“There’s been increased interest in older, rarerexpressions and more distilleries are comingout with them to ignite interest in the category.”

–Andrew Nash, The Glenlivet

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Although no new expressions havecome from The Glenlivet, its annual vin-tage release recently arrived in stores: the1972 Cellar Collection ($700). As usual,the supply is limited and the price is high;only 800 bottles will be available in the U.S.But more important to the brand in thelong-run is the repackaging and re-launch-ing of its 21 Year Old ($100). The new,more stylish bottle and label have receivedan “excellent” response since its September2005 launch, according to Glenlivet’s Nash.

The 175th Anniversary of Talisker, theonly Single Malt from the Isle of Skye, wascommemorated by a collector’s Anniversary

Edition release ($130) and won the DoubleGold in the International SpiritsCompetition. Talisker’s sales grew double-digits last year, according to Diageo NorthAmerica’s Joel Henry, outpacing thePremium Single Malt category.

The Macallan has just released a newedition to its Fine Oak line (a 17 year-old at$120). The Fine Oak, which includes a 10,15 and 21 year-old, was created to “play therole of aperitif,” explains senior brand man-ager Daniel Goodwin.

Interestingly, Remy Cointreau’s otherScotch distillery, Highland Park, justlaunched a 15 year-old ($60). In fact,Highland Park may soon be the newMacallan. “We’re three or four years behind,”says brand manager Steve Cruty. HighlandPark has had a banner year, the highest in itshistory in the U.S. market, expecting 50 per-cent growth over last year. How’s it doing it?Cruty says, by “mimicking Macallan’s suc-cess.” Plus, younger drinkers are getting intoScotch, especially Highland Park, according

to Park Avenue’s Goldstein. And the newHighland Park 15 year-old is at an attractiveprice point, “allowing 12 year-old drinkers tostep up without making a huge investment inthe 18 year-old,” notes Cruty (which run $44and $80, respectively). Highland Park is oneto watch considering the brand, according toCruty, hasn’t even “tapped the potential inthe U.S. market.”

Over at Diageo, it too has seen“increased consumption among consumersin their mid to late 20s,” says Laura Peet ofDiageo North America. And, according toChris Parsons, Diageo’s VP of Marketing,Scotch and Irish, “Our brands are distinc-

tive because they follow a tradition ofproduct innovation; the most recentinclude the Johnnie Walker AnniversaryPack and 1805 Pack; Classic MaltsDistillers’ Editions; and Buchanan’s RedSeal.” Parsons adds that “if we continue tolook after our current consumers then theyin turn will remain loyal to our brands, andonce younger consumers recognize the ver-satility and dynamic flavor range thatScotch brings, we'll be able to bring in newdrinkers that will have lasting and longterm benefits on the category.”

In addition to the diversity the Scotchwhisky category currently offers con-sumers, whether it be single malts or topquality blends, Bacardi’s Duggan echoesParsons’ sentiment that the key to growingthe category lies in educating consumersabout the product. “Many people seeScotch as a product for older generationsor the upper classes, which simply isn’ttrue,” he says. “Scotch can be enjoyed byanyone—as people are finding out.” �

“Many people see Scotch as a product for oldergenerations or the upper classes, which simplyisn’t true,” he says. “Scotch can be enjoyed byanyone—as people are finding out.”

–Ned Duggan, Bacardi USA, Inc.

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