Norrelle Goldring from ShopAbility looks at differences and similarities between American, Scotch and Irish whisk(e)y drinkers, and opportunities this presents onpremise and offpremise. For Drinks Magazine.
The word Whisky, with or without the e, confuses people. So at risk of being technically incorrect I’m going to refer to American whiskeys such as Jim Beam and Jack Daniels as ‘Bourbon’ and Scotch whiskies as Scotch.
WHAT’S GOING ON
Within whisk(e)y globally, Jack Daniel’s has just overtaken Johnny Walker Red Label as the world’s number 1. There’s also a global trend back to Irish whisky due to its smoothness.
Australia is the world’s second largest Bourbon market, although until very recently Bourbon ran a close second to Scotch as Australia’s largest spirit (this indicates just how much Scotch we drink!) and is now poised to take pole position.
However, Bourbon is growing in Australia, where Scotch has remained relatively flat. There has been a shift into more premium Bourbons, with consumers trading up.
10% of adult Australians have consumed Scotch or Irish whisky in the past 4 weeks, with a shift out of onpremise and into offpremise consumption in line with the broader GFC trends and smoking laws impacting the onpremise in 2009.
The above would all broadly indicate that since alcohol’s share of total beverage throat is relatively flat, Bourbon is starting to cannibalise Scotch and Scotch will need to shore up its relevance to retain its share of ‘spirit throat’.
WHO’S DRINKING WHAT & WHY
Bourbon vs Scotch
Bourbon skews younger than Scotch due to its smoother palate, sweeter taste and therefore easier drinking nature. Scotch is a more challenging taste profile better suited to more mature palates. Drinking repertoires are largely set by the age of 30, so you’ve got to get at them before then. So the question is, how do you introduce consumers to Scotch to it earlier?
Blended Scotches, and particularly Irish whiskeys, have an opportunity to promote their smoothness (as opposed to sweetness) to compete with Bourbons.
In the way that you start out with a sweet tooth as a kid and your palate becomes more savoury as an adult, in theory you’d think that people might start with Bourbon and as they age, shift into Scotch.
However, Bourbon drinkers tend to stick with it … they become brand and category loyal. How can you get Bourbon drinkers to try Scotch and Irish whiskies, and is it in your interests to do so?
A lot of Scotch drinkers start with Scotch because they’re introduced to it by someone. They’re more open to variety and trying a range of tastes than are Bourbon drinkers. This means you have an opportunity to cross sell (‘if you like this, you’ll also like …’) and create experimentation via tastings and pick & mix small pack sizes.
RTDs vs Full Strength Bottle Spirits (FSBS)
According to Roy Morgan’s Alcoholic Beverages Map October 2009, 70% of dark bottle spirits drinkers are 35yo+ (driven by Scotch and Brandy) where over 50% of RTD volume is consumed by under 35s. Whilst on the face of it it would be easy to generalise and say ‘FSBS skews older and RTD skews younger’, this also means that there is at least 1/3 of consumers crossing over between FSBS and RTD dark spirits, which was exacerbated by the RTD excise when consumers discovered it was cheaper to ‘free pour’ from FSBS.
Scotch RTDs in particular suffered under the excise and now underindex in RTDs.
Because they have a mixer such as Cola or dry ginger, RTDs are a smoother, easier, less challenging drink than their full strength bottled spirit (FSBS) cousins and a natural ‘way in’ to spirits.
RTDs make consuming Scotch less challenging. Scotch RTDs are a means of entering the category and building relevance for 18-24yos – trade up into bottled Scotch (particularly blends).
You can encourage this uptrade from RTD to FSBS by bundling them together.
WHAT THIS MEANS – SOME OPPORTUNITIES TO LEVERAGE
Taken all together, the preceding facts indicate to me that the various whisk(e)ys play the following roles and have the following broad opportunities:
Bourbon: Volume/AWOP and uptrade
Scotch: Trial
Irish whisky: Awareness as an alternative.
Onpremise Opportunities
- Scotch: Encourage trial by using it as a cocktail base as a method of introduction and to underscore its mixability. Hold Scotch tasting nights to introduce Scotch and encourage experimentation. Run ambassador programs (member get member type stuff). Drinks lists featuring different Scotches and what they can be mixed with … versions of the Diageo ‘Journey of Taste’ Scotch education program, held on your premises
- Irish Whisky: Run sampling programs for Irish whisky to drive awareness of ranging and characteristics.
- Bourbon: Promote by providing incentive to uptrade/upgrade, eg ‘for an extra $1 try Jim Beam Black Label’. Provide education on how premium Bourbons should be consumed (ie straight or with a mixer) via drinks lists and table talkers.
Offpremise
- Scotch: Pick & Mix small bottle mixed packs/boxes to encourage trial and repertoire building (like with imported and craft beers). Tastings supporting promotions of specific brands. Promotions and tastings days bundling similar scotches eg all Highland Single Malts, or all blends.
- Irish Whisky: tastings and samplings.
- Bourbon: Promotion mechanics encouraging uptrade (eg ‘for an extra $9.99 get Jim Beam Black Label) or bundle mainstream with premium Bourbons (either smaller or larger pack sizes). Run tastings and samplings of premium Bourbons with supporting price promotion.
That’s a few basic ideas for starters, anyway. In developing your promotional activities if you work from the principle that Bourbon is uptrade and volume, Scotch is trial and experimentation (using blends and RTDs as entry points) and Irish whisky is awareness, you can’t really go too far wrong.
