Scotch — both blended and single malt — appears to be regaining favor among several segments of American consumers for a variety of reasons, and largely as a result of a concerted effort by a savvy and tireless industry.
After years of downward or flat sales for blends and mixed though stronger results for single malts, Scotch producers have held fast to their belief in this dependable brown spirit, and in the quality it has to offer consumers. Driving growth and piquing interest in various segments of the population are a committed campaign to forge personal ties with consumers through what has come to be known as “relationship marketing.”
Other effective strategies include educating them about the complexity and history of Scotch; helping them find boutique malts and trade up to higher-priced brands; and targeting growing ethnic populations. And the results have been encouraging. Nationally, total Scotch volume gained 0.2% in 2002, including both blends and single malts, according to Adams Handbook Advance 2003. Key category performers nationally included Dewar’s, the top-selling Scotch in the U.S., which posted a 1.0% gain to almost 1.4 million 9-liter cases, and the superpremium Johnnie Walker Black, which increased sales by 8.1% to 643,000 9-liter cases nationwide. The prestigious Chivas Regal was flat in 2002, at a volume of 479,000 9-liter cases. Current brand owner Pernod Ricard (after taking over the brand from Seagram/Vivendi) is looking for real growth this year once its global marketing plans for the brand take effect in the coming months. Diageo’s Scoresby scored a 3.7% gain in 2002, upping sales to 392,000 9-liter cases nationally, while The Glenlivet, the leading single malt from Pernod Ricard USA, garnered a 5.3% gain to 200,000 cases nationally. In the control states, total Scotch volume declined slightly, down 1.1%, according to Adams Beverage Group research based on the 12 months ending November 2002.
Prospects Are Good
“I think the prospects are very good for Scotch, both blended and malts,” said Richard Nickels, the new product group director for Scotch for Schieffelin & Somerset, which markets several including the Johnnie Walker line of Red and Black (as well as the ultrapremiums Johnnie Walker Gold and Johnnie Walker Blue), J&B and the single malts Oban, Lagavulin and Talisker (sometimes grouped together as the Classic Malts).
One reason is the growth of ethnic markets. “What we’ve found as a category, for example, is that Hispanic consumers, a massively growing population in the U.S., are by definition Scotch drinkers,” Nickels said. “Whether that stems from the kind of culture they come from in their original countries or has grown through generations of people who already live in the U.S., they appear to be predisposed to drinking Scotch. As the numbers grow we’re going to get some good business out of that.”
Dewar’s, the top-selling Scotch in the U.S., has launched a “Conquer The Highlands” integrated marketing program that includes point-of-sale materials, a sweepstakes and media partners.
Nor is that the only growth demographic. “The other big population that is very promising is Asian-Americans,” noted Nickels. “Whether they come from Korean or Chinese backgrounds, they love brown spirits, and a lot of what they drink is Scotch.”
Of its three single malts, Talisker will take center stage this year with focused advertising . The company is also releasing new 20 and 25 year old versions, in limited supplies, which will be in selected markets this year.
Dewar’s, the top-selling Scotch from Bacardi USA, sells almost twice as many cases nationally as the next largest-selling Scotch (the U.S.-bottled brand Clan MacGregor, from William Grant & Sons), and as the category’s leading blended Scotch it also has a variety of promotional and merchandising programs that help retailers highlight the brand and category. For example, Dewar’s recently launched “Conquer The Highlands,” an integrated marketing program that includes point-of-sale materials, a sweepstakes and media partners. The promotion offers consumers a chance to win an adventure trip through the Scottish Highlands for four people over six days and five nights. In addition, partnerships with Men’s Journal magazine, the Men’s Journal Adventure Team and Outdoor Life Network is giving the adventure trip extensive coverage. Indeed, the Adventure Team is participating in the Scotland trip, which is being documented for TV broadcast in April, coinciding with National Tartan Day festivities on April 6. Conquer The Highlands point-of-sale kits are available for retailers and include an impressive case card. A take-one guide to the adventure and to Dewar’s whiskies unfolds into a map of Scotland. There’s also a Conquer The Highlands shelf talker to highlight the program on shelf displays.
Johnnie Walker Scotch is re-emphasizing its traditional Striding Man figure for ads and promotional materials this year.
Dewar’s 12 year old, introduced two and a half years ago, is also doing well. It will benefit this year from a new product-focused marketing campaign whose ads will bear the tag line, “Savor Every Detail.” In some instances, the messages will focus on the “marrying” process (an extra step in production that Dewar’s takes) with the phrase, “We Believe Single Malts Should Live Together Before Marrying.”
A major program set for this spring is a partnership with Golf Digest magazine which will involve sampling at golf courses across the U.S. “One of the key things with Scotch is if you talk to people about how they got into the category, it’s ‘Well, my father taught me to drink,’ or a bartender did,” noted Aleco Azqueta, national marketing manager for Dewar’s. “The mentoring process is very important to Scotch.”
The response is the Dewar’s 12 Father-Son Open, which will happen in six cities and feature father-son teams. The winners will play at St. Andrew’s Golf Club in Scotland, the birth place of Scotch and golf. A campaign tag line will be, “Who says marriage and golf don’t mix?”
Sales of Skyy Spirits single malts, The Glenrothes and Glengoyne, are up by about 20%, the company says.
Another program, run in conjunction with Jungle magazine, targets students at the top 100 MBA and law schools. Yet another initiative has involved recreating the atmosphere of Playboy Clubs with the Dewar’s 12 Playboy Lounge. Invoking memories of the Rat Pack “when Scotch was king and it was cool to be a man,” the program involves regional events and climaxes with a bash at the Playboy Mansion on May 8.
“We’ve seen the trend in consumption of the above-premium, more exclusive labels increasing,” said Schieffelin & Somerset product group director Nickels. “Our Johnny Walker Gold and Blue labels have been very popular in the last couple of years. We were incredibly surprised given the events of 2001 when they just kept on growing.” Schieffelin & Somerset will be running many “Journey of Taste” events, Nickels said. “This is giving people what they want, which is a really good night out, inviting people along to a nice venue. Then we do a Johnnie Walker tasting.”
The Dalmore single malt, from Jim Beam Brands, showed considerable growth last year, according to the company.
The company also plans to get back to its traditional Striding Man figure for ads and promotional materials in 2003. Said Nickels, “We’ve kind of neglected him in previous years because we forgot how powerful he is for us as a kind of icon. This spring you’ll see him everywhere: bus shelters, posters, magazines.”
Regarding the single malt category, Nickels suggested, “I think what you’re seeing is that the more eclectic malts are really growing,” while the more or less mainstream malts have slowed down. “We’ve done a couple of exclusive bottlings, which have sort of left the shop like hot cakes.” In fact, the company has just added three new single malt versions in very limited supplies: Talisker 25 Year Old, Talisker 20 Year Old and Oban 32 Year Old, all bottled at cask strength.