“Bourbon is a born-again spirit,” said Max Shapira, president of Heaven Hill Distilleries in Bardstown, KY. “It’s no secret that a number of years ago the bourbon category was having its problems. Over the last two, three, maybe five years, the outlook for bourbon has, I think, dramatically changed.”
Indeed, there has been a strong consumer move toward premium and superpremium straight American whiskies in the past few years. And while sales of straight American whiskey were off slightly in 1997 (down 1% nationally, according to the authoritative Adams Liquor Handbook 1998, and 1.1% in the control states), talk of category growth abounds.
“Times are good and people are spending — and willing to spend a little bit more on the premium side,” said Alan Moore, brand director for Brown-Forman’s Early Times, the third-best-selling straight whiskey in the U.S.
“Bourbon has become more popular and is earning a lot more respect than it has before,” agreed Chris McCrory, brand manager for all of New Orleans-based Sazerac Co.’s bourbons. “That respect is also skewing the consumer to the upper-end of the market, so you’re seeing some standard bourbons actually starting to slow down a little bit.” Some of the more upscale products, however, are seeing “tremendous growth.”
Jim Beam’s small batch line is “growing like crazy,” added Bob Kopach, director of marketing communications for Jim Beam Brands. The products, especially Knob Creek, have “definitely caught fire, mostly with the young adults.” While exact sales figures were not available, he said percentage increases for the small batch line were in the double digits.
Beam’s small batch bourbons — Baker’s (aged seven years, 107 proof), Basil Hayden’s (aged eight years, 80 proof), Knob Creek (nine years old, 100 proof) and Booker’s (six to eight years old, as high as 126 proof) — began to change the face of the bourbon category when they were introduced as a group several years ago. They sell for anywhere from $25 to $50 per bottle.
Jim Beam Bourbon sits atop the straight American whiskey category in the control states, with 1997 sales of almost 870,000 mixed cases (nationally, the brand sold more than 3.3 million 9-liter cases and had a 25.8% share of the category. In tandem with Brown-Forman’s Jack Daniel’s Black — with 1997 sales of more than 3.1 million 9-liter cases and a category share of 24.1% nationally; almost 720,000 mixed cases in the control states — these two brands represent about half of all straight American whiskey sales.
Brown-Forman’s Jack Daniel’s, in fact, showed a 3.6% sales increase in the control states last year (a 2% increase nationally), and the brand’s superpremium line extension, Gentleman Jack, did even better on a percentage basis. Gentleman Jack’s sales grew by more than 10% nationally last year, according to Chris Morris, manager of consumer development for Brown-Forman Beverages Worldwide. The brand has benefitted from Brown-Forman’s ties to professional billiards, specifically its sponsorship of the Women’s Professional Billiards Association’s 9-Ball Championships that begun last year. Billiards, Morris pointed out, is “one of America’s fastest-growing sports, so it’s good to get in on the ground floor with that. We chose it because it is very professional, has a lot of visibility, and both men and women watch.” Gentleman Jack, a premium whiskey that, according to Morris, is the only one that is “double-mellowed,” retails for approximately $20 for a 750 ml bottle.
Brown-Forman chalked up an impressive rookie year for Woodford Reserve, according to Morris. In its first year on the market, the superpremium bourbon, available in a handful of states, notched sales of more than 4,000 9-liter cases. The company expects to distribute it nationally by 2000.
The brand’s mystique stems from its origins — the Labrot & Graham Distillery in Woodford County, KY, a 19th-century limestone block warehouse that was resurrected at a cost of several million dollars in order to produce the line. The brand carries no age statement because it “matures at a very slow, gentle rate and… we don’t know when the whiskey is going to tell us it’s ready,” Morris said. It retails for about $28 per 750 ml bottle.
“We were looking at the trends and seeing how the small batch bourbon and the whole whiskey category was taking off,” recalled Morris, “so we wanted to do it right.” The building had been shuttered for 30 years. The brand’s limited advertising budget is being directed in part at tourism magazines, since tours of the distillery have proven popular.
Brown-Forman’s Old Forester was repackaged last year with an updated look that nonetheless keeps founder George Garvin Brown’s handwritten label. “We changed the bottle shape and jazzed up the label,” Morris said. “It has been positively received by the trade and consumers.” The new look is being backed by some “aggressive” advertising — the first time the brand has really been advertised in a number of years — under the banner, “Old Forester, Serious Bourbon Since 1870.”
Early Times business is “down slightly,” said Morris, “and we’re doing some things from the marketing side” to reverse that, namely doubling the advertising budget this year to just under $1 million. A new, as yet unfinished creative campaign is expected to break in October.
A major promotion for Early Times continuing through September called Speedstakes will grant a winning consumer the chance to drive a NASCAR-style race car at the Richard Petty Driving Experience. In addition, the Early Times hot-air balloon will be floating over 35 markets this year.
“Consumers More Enlightened”
“I still go with what I’ve been seeing for the past 12 months, which is a slow movement to the super premium sub-segment,” said Tom Smith, director of regional brand strategy for United Distillers & Vintners (UDV). “Consumers are becoming more enlightened to the premium nature of the upscale bourbons.” UDV markets George Dickel, Old Charter and W.L. Weller, and distributes Wild Turkey. The company also markets Wild Turkey Kentucky Spirit, a single-barrel product retailing for approximately $40, which comes in a bottle with ridged, arc-shaped shoulders cut to capture light and resemble the plumage of a real wild turkey.
George Dickel, which is strong in the Southeast, is growing despite limited availability nationally. A comprehensive marketing program kicked off last year consists of print and radio campaigns as well as on-premise promotions, internet and direct mail. Called “The Dickel Diaries,” it showcases consumers’ “passion for the brand.”
The company has limited marketing resources to spend on W.L. Weller and Old Charter, but is doing some specialized regional work on both in terms of advertising and promotion — Weller with print and outdoor, and Charter with outdoor alone.
UDV also markets the Bourbon Heritage Collection — upscale versions of Dickel, Charter, W.L. Weller, Old Fitzgerald and I.W. Harper — which plays into the trend toward superpremium whiskies. Each of the brands sells for $30 to $35.
Indeed, one of the most successful bourbons last year was the upscale Maker’s Mark, from Hiram Walker. The brand featured sales of 227,000 9-liter cases, for an increase of 7.1%.
At Sazerac, the superpremium Blanton’s is also doing well, according to McCrory. Blanton’s carries no age statement, but is typically between six and eight years old and sells for $45 to $50. The company also markets three versions of Ancient Age (a 10-year-old, sold only in Kentucky and priced at $15.99 for a 750 ml bottle; the six-year-old Ancient Age Ten Star, selling for $11.99; and the original Ancient Age, which is four years old and retails for about $8 to $9).
At the mid-priced level, Ten High bourbon had an excellent year, according to Jack Kavanagh, brand manager for Chicago-based Barton Brands. The brand registered a 3.9% increase nationally in 1997, to 561,000 9-liter cases. “In terms of our actual business, we were up in excess of 6.5% or 7%,” Kavanagh pointed out. “If you look at that in light of the category itself, it’s pretty significant.”
Not surprisingly, suppliers are gearing up for the fall and winter holiday season, when they will do all they can to shift sales into overdrive.
UDV’s Bourbon Heritage Collection will be merchandised together for the holidays in a special display rack. There will also be some special point-of-sale materials and a video sent to consumers contacted through on-premise sampling programs.
Dennis Walsh, vice president and director of marketing for Jack Daniel’s brands, promised “significant point-of-sale in stores” for this coming holiday season, including special glass packs. Some markets will see the introduction of 1913 Gold Medal decanter to celebrate a gold medal win in that year. Jack Daniel’s issued decanters for its 1904 and 1905 wins over the last two years, and more — seven in all — will be forthcoming.
Retailers can also purchase an actual barrel of Jack Daniel’s, labeled specially for their store and signed by the master distiller Jimmy Bedford. Each holds about 240 bottles, noted Walsh, “and the store can utilize those for special displays and promotions as they would like.”
Together with superpremium Gentleman Jack and Jack Daniel’s Single Barrel, which retails at $35 to $40 a bottle, the company has set a “family brand promotion” strategy. In September, for example, a birthday celebration will trumpet the brand’s 148th birthday and include off-premise promotional activity. “This year will be bigger and better because we’re building up to the 150th birthday celebration in 2000.”
In addition, Gentleman Jack will offer a cocktail shaker co-pack in time for the holidays. Noted Morris, “Because of its soft, mellow nature, it’s perfect for inclusion in premium bourbon and Tennessee whiskey cocktails.”
Early Times’ p-o-s materials for the holidays will revisit last year’s, with a pine cone wreath theme, gift cartons and assorted other materials. The brand will also serve as the name sponsor for the Early Times Hollywood Derby, the $500,000 Grade One Stakes horse race held at Hollywood Park in Hollywood, CA.
And Brown-Forman’s Old Forester continues its “First Bourbon Bottle In America” tagline and ties in with Americana through sports. A football-themed promotion will include a video offer this fall.
For this holiday season, Jim Beam is working on promotions tied to special music offers, including a chance to win a selection of CDs. The company’s Jim Beam’s Back Room program includes live music sessions held around the country. Said Kopach, “Music for the young adult is very important. Our programs are developed around those.” Knob Creek will offer a gift set featuring a Manhattan glass, while Booker’s will have a special bottle and package commemorating its 10th anniversary.
Ancient Age has newly redesigned holiday gift cartons and will distribute a free-standing display resembling a log cabin that can be used for all three versions of the brand.
Heaven Hill’s Evan Williams will debut a national magazine ad campaign for the holidays, running under the banner, “Get Older, Get Better.” Shapira called it “quite creative, a little offbeat, appealing to a broad range of consumers.” The single barrels will have their own ad campaigns in national magazines. The company will also market an Evan Williams Egg Nog made with no artificial flavors to help “extend the brand franchise and equity.”
Meanwhile, Heaven Hill is crowing about the national launch this month of its Fighting Cock Bourbon. Aged six years, the 103-proof brand has been available in limited quantities regionally (mostly in, the South), but now the company is putting lots of support behind it with an extensive new marketing program. An advertising campaign as well as a full line of merchandising materials all tout the theme, “If you can’t run with the rooster, stay in the henhouse.” Fighting Cock also boasts a redesigned bottle and is available in sizes ranging from 1.75 liters down to 50 ml.
Seeing The Future
Shapira said the “the excitement is going to continue. There continues to be interest in these specialty bourbons, which to me is permeating the rest of the category. It’s sort of following along the line of single malt Scotches and specialty rums. All that interest is being turned into interest in these bourbon products, which is going to make for the growth of the entire category.” Heaven Hill markets Evan Williams, the third-best-selling straight whiskey in the control states. Nationally, the brand increased sales 1.1% in 1997, to 910,000 9-liter cases. The company also markets a single barrel version of Evan Williams, as well as Elijah Craig bourbon.
The year ahead should “probably be very similar to the way we’ve seen it the last couple of years,” predicted Barton’s Kavanagh. The category in general, he pointed out, is “still in decline,” although there is “a fair amount of shuffling within the category. You’ve got some of the traditional leaders who are struggling, and some who are increasing a smidge. You don’t see a lot of category growth per se, but you see growth within the category from various brands.”
Brown-Forman executives see straight American whiskey maintaining its pace during the coming year, according to Morris. “The old adage that the American consumer is ‘drinking less but drinking better’ is holding true. While some of the mainstream brands are experiencing declines, the superpremium brands continue to grow.”
And that’s usually pretty good for the bottom line.
Howard Riell is a veteran business reporter who is a contributing editor to Beverage & Food Dynamics and Cheers magazines.
What Makes Bourbon,
By Federal law, bourbon must be made using at least 51% corn in its mash, while the corn content must not exceed 79%. (If more than 79% corn is used in the mash, the product must be designated as corn whiskey.)
Bourbon is straight whiskey and, according to law, must be distilled at 160 proof or less and must be aged a minimum of two years in new charred oak barrels. As a practical matter, though, most bourbon is aged at least four years and often longer. As a straight whiskey, there is no blending permitted and no additives, with the exception of water to reduce the proof. Most bourbons are marketed at 80 proof, but some, particularly the newer ultrapremium bourbons, are much higher in alcohol content.
Bourbon can be distilled anywhere in the U.S., by law, but the vast majority of it is produced in Kentucky, where it must be distilled and warehoused for at least one year in order to carry the “Kentucky Bourbon” designation on the label.
The sour mash method of production is often associated with bourbon. This is simply a technique of fermentation that uses part of the previous distillation in the new batch of fermenting mash. The sweet mash yeasting method uses only fresh yeast for fermentation. The sour mash method provides a dimension of consistency from one batch of whiskey to another.
Notably, a 1964 Act of Congress designated bourbon as America’s native spirit.
Tennessee whiskey is a close cousin of bourbon in that it is a straight whiskey made in a similar manner to sour mash bourbon. The production process, however, includes an extra step, whereby the distilled spirit is filtered through maple charcoal in large wooden vats, in order to remove impurities, before aging. And, of course, it has to be produced in Tennessee.
The most well-known Tennessee whiskies are Jack Daniel’s and George Dickel.
Leading Brands of
in the Control States
(Mixed Cases) 12 months ending March
Jim Beam Brands
Jack Daniel’s Black
Heaven Hill Distilleries
Jim Beam Brands
IDV North America
United Distillers NA
Total Top 10
Total Straight Whiskey
in the Control States
Source: Adams Business Media Research Database from NABCA data.
2 oz. bourbon
1 tsp. superfine sugar
4 fresh mint sprigs
Fill a Collins glass with crushed ice. In a small glass, muddle the sugar and leaves from two mint sprigs with a dash of water. Add the bourbon, stir and strain into the Collins glass. Stir until the glass frosts. Garnish with remaining mint.
2 oz. bourbon
1 sugar cube
twist of lemon
Muddle a sugar cube in the bottom of an Old-Fashioned glass with a few drops of water and a dash of Angostura bitters. Add bourbon and ice cubes; garnish with a twist of lemon.
2 oz. bourbon
Pour bourbon into chilled Highball glass. Add ice cubes and fill with equal parts ginger ale and club soda.