Bourbon’s Growth Accelerates, Fueled By Innovation

From Shanken:

Top Bourbon marketers are fueling category growth both in the U.S. and globally, with major investments in new product development, line extensions and marketing campaigns. Three of the top five Bourbon brands worldwide grew volume at double-digit rates last year: second-ranked Jim Beam (+10.4%), fourth-ranked Maker’s Mark (+17%) and fifth-ranked Wild Turkey (+11.1%). Top-ranked Jack Daniel’s (+6.4%) and third-ranked Evan Williams (+5.1%) also posted solid growth, according to Impact Databank. “We attribute the latest Bourbon surge to innovation, premiumization and authenticity,” says Chris Bauder, general manager U.S. Whiskies at Beam Inc. “Innovation is helping to welcome new consumers into the category.”

Over the past few years, Bourbon makers have developed a wide array of new offerings to raise the category’s profile and drive volume. “This new product activity has helped expand the entire category, and the advent of flavors has drawn in a range of new consumers, including a number of female consumers,” observes Max Shapira, president, Heaven Hill Distilleries.

From a large base, Bourbon growth in the U.S. (which accounts for more than 60% of global category consumption) accelerated from 2% in 2010 to 3% last year, and that momentum has carried over into 2012. Bauder notes the entire U.S. Bourbon category is up 11.9% by dollar value in Nielsen channels for the latest 52 weeks. “Bourbon is the fastest growing of the five biggest spirits categories in the U.S.,” he says, adding that Beam-owned Maker’s Mark is up 21.8% and stablemate Red Stag is up 39.2% in dollar value during the time period.

Maura McGinn, global head of spirits at Campari America, credits a renaissance in masculinity as a key trend fueling category demand. “American men have been inspired by Don Draper of Mad Men and the Hollywood set who don’t subscribe to all things metrosexual. As a result, men are moving toward brown spirits with a bit more complexity,” she observes. Campari has committed significant investment behind Wild Turkey, which was up 0.9% to 555,000 cases in its domestic market in 2012. The company also recently developed Wild Turkey’s first U.S. television ad campaign, with the tagline “Give ‘em the Bird.”

Major Bourbon producers are also making significant investments in industry hospitality. In October, Beam Inc. unveiled The Jim Beam American Stillhouse—a visitors’ center that’s expected to attract some 200,000 visitors per year to Clermont, Kentucky—and the company’s new Global Innovation Center, a 57,000-square-foot facility dedicated to researching and developing new products. In Louisville, Heaven Hill plans to open The Evan Williams Bourbon Experience, a $10 million project, in September 2013 in the downtown area of Louisville in what was once called “Whiskey Row,” not too far from where Evan Williams had his first commercial distillery in Kentucky. Elsewhere, more than 120,000 people a year visit the Woodford Reserve Distillery. “This is a critical element of our marketing, as there is no better way to interact with the consumer than on our home turf,” says Jay Finnigan, vice president, portfolio director, North American whiskey brands, Brown-Forman.