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News Analysis: Blending heritage with innovation
(Marketing Via Thomson Dialog NewsEdge)Whisky brands are attracting a new generation of drinkers with radical NPD, design and promotions.
When market-leading premium Kentucky bourbon Maker's Mark unveiled plans to focus on the UK whisky scene (Marketing, 29 March), established Scotch brands barely flinched. Traditional players are used to whisky brands arriving on these shores from as far afield as Japan and India, and there is growing evidence that the newcomers are helping to attract new drinkers into the wider whisky category.
The threat to what has been seen as a traditional drink choice, weighed down by hackneyed Highlands imagery and consumed by an older demographic, has also abated as the bigger brands invest in new product development to broaden their portfolios. Recent innovations in whisky from Diageo include J&B -6 deg C, a pale-coloured Scotch aimed at younger, style-conscious drinkers of white spirits, and Green Label, a 15-year-old blended malt, joining the core Johnnie Walker range to cater for growing interest in the blended malt sector.
Speaking at last month's World Whiskies Conference in Edinburgh, Diageo's global brand director for whisky portfolio brands, Charles Allen, said: 'We have recently seen the best export figures for Scotch whisky in many years. Innovation has a key role to play in ensuring the continuity of that progress. It is our responsibility as an industry to keep whisky relevant, contemporary and appealing to consumers.'
Fighting UK decline
Total export volume for Scotch whisky was the equivalent of almost 990m bottles in 2005, an increase of 4%, or 34m bottles, on 2004. The situation in the UK, however, is very different. Its market for whisky is the oldest in the world, and though bourbon and Irish sales are growing, the market remains dominated by Scotch brands, and sales of single malts, which account for about 11% of the 8m case market - fell by 5.5% last year, largely due to declines in standard blends and low-price blends.
However, industry leaders anticipate whisky's rapid return to fashion, as 28- to 40-year-olds shift their consumption habits from quantity to quality, and seek reassurance from the heritage and taste of premium brands, be they Scotch, bourbon or something more exotic.
Retail is playing a growing role in the changing perception of whisky as a more contemporary drink, with specialist retailers beginning to reverse the deflationary pressures brought by the major supermarkets. One such specialist is The Whisky Shop, a chain that has grown from six to 20 outlets in the past two years. 'The independent specialist retailer is the future for many whisky brands,' claims The Whisky Shop chief Ian Bankier. 'It protects the brand equity that many supermarkets kill, supports the trend toward premium products and is an incubator for fresh expressions and limited editions.'
Scotch producers are also investing in multimillion-pound branded visitor centres at a number of distilleries.
The Famous Grouse Experience and Dewar's World of Whisky at Aberfeldy in Perthshire have seen growing numbers of visitors and, on the back of its investment, Dewar's is relaunching its iconic White Label and other ranges in the UK through Bacardi-Martini.
Global brand director for Dewar's Neil Boyd describes the award-winning World of Whisky visitor centre as offering 'meaningful and deep experiences for the consumer'. It is supported by 'brand shrines' in major London airport duty-free shops that will be rolled out internationally.
As well as mainstream advertising, The Famous Grouse continues to support Scottish rugby through a sponsorship of the national rugby team that is now in its 15th year. This year, spectators at Scotland's closely-fought win over England in the 6 Nations saw a remote-controlled motorised grouse deliver the stand to the kicker at penalty attempts.
Imaginative strategy
Other innovative media channels exploited by The Famous Grouse include Ginger Grouse scooters, with field marketing teams promoting the eponymous whisky cocktail on Edinburgh's Rose Street ahead of Scotland's home internationals.
It is in line with the brand's 'warm, unconventional and humorous' personality, according to Gerry O'Donnell, director of The Famous Grouse at owner Highland Distillers.
Like Johnnie Walker with Green Label, The Famous Grouse has also launched a blended malt - a category effectively revitalised by the Scotch Whisky Association's decision to clarify Scotch whisky categories. Other recent entrants include Dewar's with Dewar's 15, a 15-year-old blended Highland Malt, and William Grant & Sons' Monkey Shoulder, aimed at 'style bars' as a vital cocktail ingredient.
Using naming and packaging far removed from traditional single-malt values, Grant's is attempting to attract new users.
Equally radical in design and position, Ian Macleod Distillers' Smokehead, an Islay-blended malt, seeks to attract 'peat fiends' who love the intensity of Islay single malt but are seeking a different and more extreme taste sensation. Meanwhile, also on Islay, the resolutely independent Bruichladdich has been experimenting with the strongest whisky ever distilled.
While innovation may be changing whisky's perception among a younger generation of drinkers, there is a danger that in the quest to become fashionable, its history may be forgotten. Allen's message at the World Whiskies Conference was innovate by all means, but remember that 'it is the hundreds of years of heritage and consistency of quality that are key to the aspirational reputation our product enjoys'.
DATA FILE - WHISKY CONSUMPTION (000s nine-litre cases)
Type 2005 2004 2003 2002 2001
(est)
1 Blended Scotch 6666 6868 7059 7180 7235
2 Malt Scotch 778 755 710 678 638
3 US whisky 925 873 730 647 633
4 Canadian whisky 60 90 118 120 135
5 Irish whiskey 387 378 368 363 340
Total 8816 8963 8985 8987 8980
Source: Customs & Excise/Scotch Whisky Association/IWSR estimates
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