Burt Notarius, owner of Premier Liquors, in Kenmore, NY, believes that Scotch can be one of the brightest areas in the spirits market.

New products and new strategies, aged whiskies and age-old heritage: combining the old with the new is a winning strategy for Scotch.


Burt Notarius, owner of Premier Liquors, a well-known and well-established retail operation in Kenmore, NY, has seen a lot of changes in the Scotch market over the years.

Like others in the beverage alcohol business, he witnessed the spirit’s precipitous decline through the 1970s and ’80s, when Scotch saw almost 60% of its case volume disappear.


But what does Notarius think of Scotch now?

“It’s one of the brightest areas in the whole spirits market,” he declared. For Premier Liquor, Scotch is one of the most popular spirits. Dollar-wise, its sales are second only to vodka.

And Notarius has gotten into Scotch big time. His store carries about 180 different bottlings of single malts as well 85 to 90 blended brands. He holds single malt tastings for groups of up to 100 people at a time and even buys special single malts by the barrel and half-barrel.

“What consumers like about Scotch is that it is almost like wine,” he said. “The people [behind its production] and the process are authentic and that can be hard to see with other spirit products.”

What Notarius and others in the beverage alcohol industry are seeing is the increased popularity of the finest and most expensive Scotch brands. “It seems the premium to superpremium part of the market is experiencing growth and certainly single malts continue to grow and bring new consumers into the fold,” observed Bob Dubin, Scotch category manager for Seagram Americas, the company behind Chivas Regal, The Glenlivet and the Heritage Selection of single malts.


While the Scotch market as a whole continues to decline, superpremiums, including both blends and single malts, are up. According to suppliers, the single malt segment continues to grow at the rate of about 15% a year. And many superpremium blends boast growth as well. Schieffelin & Somerset reported, for example, that all of its Johnnie Walker brands above Red, its premium label, grew last year: Black by 6% and Gold and Blue, both small, ultrapremium brands, by over 20% and 40%, respectively.

And the people who are interested in these higher-end Scotch brands are particularly desirable as consumers. According to a recent survey done for Hiram Walker & Sons by Alden & Associates, the consumers of single malt Scotch tend to have higher than average incomes (55% of those surveyed reported incomes of $75,000 and above) and are not afraid to spend their money on spirits (more than 50% reported spending an average of $35 or more on a bottle of single malt).


Though the single malt portion of the Scotch market is still small — sales of about 600,000 9-liter cases, according to Adams Business Media research– its double-digit growth and the attention it attracts from both consumers and the media continue to make it a hotbed of activity for suppliers. The number of single malt brands available, for example, has exploded, from about 10 brands in 1985 to more than 170 today.

And as more brands hit the shelves, the single malt market continues to take shape. For example, Brown-Forman Beverages Worldwide has positioned its newest offering, Glen Moray, introduced in October, as an “entry-level” single malt, relative to its more premium Glenmorangie line. In April, Barton Brands will introduce a higher-end single malt — Old Pulteney — to complement its existing offering, Speyburn. Old Pulteney is expected to retail for a little over $30, while Speyburn, which the company sees as more of an introductory single malt, retails in the $18-$20 range.

Meanwhile, suppliers, including Brown-Forman, have beefed up the higher end of the single malt market, most often by introducing more premium versions of existing brands. These brand extensions represent two trends in the single malt segment: the addition of products that have been aged longer and the addition of products that have been aged differently.


The Macallan, the third-largest-selling single malt after The Glenlivet and Glenfiddich, has long stressed its difference from other single malts: unlike most other Scotch brands, which are aged in either new oak barrels or ones that had previously been used for bourbon, The Macallan is aged entirely in sherry casks. According to Hilary Peck, the brand’s marketing director at Remy Amerique, The Macallan has been outperforming the single malt market for a number of years, growing at annual rates of 20% and above.

Other suppliers, however, have taken note of The Macallan’s success. For example, last February, Hiram Walker introduced a new version of The Glendronach, an 18-year-old whisky aged entirely in sherry casks, as one of the three brands in its new Defenders of the Malt collection. (The other two are Laphroaig 10-Year-Old and Scapa 12-Year-Old.)

And Brown-Forman has developed an entire line of wood-finished single malts. It introduced its Port Wood Finish brand extension of Glenmorangie in 1995, and followed it with two other specially finished versions of the brand, Madeira Wood Finish and Oloroso Sherry Finish, in the fall of 1996. In the case of Glenmorangie, the whisky for all three finishes is first aged for 10 years in casks that had previously been used for bourbon, just as the base product, 10-year-old Glenmorangie, is. Then, the whisky destined to be specially finished spends two more years in one of three kinds of previously used casks: a port pipe, a Madeira drum or a sherry butt. Brown-Forman plans to release a limited-edition, claret-wood-finished product this summer.

According to David Dorsey, vice president and group brand director at Brown-Forman, the special finishes have been well received. “Through November, sales were up by 18% for the total line and the brand had a very strong December,” he said. The Glenmorangie line includes an 18-year-old product and a 1971 vintage product as well as the original 10-year-old brand and the three finishes.

In late 1998, Schieffelin & Somerset plans to introduce a “Distiller’s Edition” of its Classic Malts collection. The Distiller’s Edition will feature a special version of each of the collection’s six brands (Glenkinchie, Lagavulin, Cragganmore, Talisker, Oban and Dalwhinnie). Each will have been finished in a different type of wood.

Meanwhile, Glen Ord, from United Distillers & Vintners North America (UDV), a brand introduced in 1995, also markets its use of sherry wood. In the case of this brand, 75% of the whisky is aged in standard American casks, 25% in casks previously used for sherry and then the two are combined. In the three years since its introduction, Glen Ord has grown in size from a little over 8,000 cases to a little over 14,000.

And The Balvenie, from William Grant & Sons, is also available in differently aged versions: Doublewood, Single Barrel and Port Wood products as well as 10-year-old Founder’s Reserve.


Even when they do not change the type of wood they use, many single malt suppliers are releasing older versions of their whisky brands. Some of the newest of these releases include an 18-year-old and a cask-strength 25-year-old Highland Park, a brand from UDV North America, and a 15-year-old version of Isle of Jura from Heaven Hill. Aberlour, marketed by Austin, Nichols, offers both different ages and different types of aging. Its newest versions, introduced last October, are 15-Year-Old Sherry Wood Finished, which has been aged first in bourbon casks and then in sherry ones, and 18-Year-Old Sherry Wood Matured, which has been aged entirely in sherry wood.

“The older products are very popular,” said The Macallan’s Peck, whose brand is available in 12-, 18- and 25-year-old versions. “People love the idea that something was made 25 years ago. Anything that’s rarer is more desirable, and when something’s old, it’s like drinking history.”


Both suppliers and retailers wonder if the appeal of the single malts can be extended to the blends. The potential result of stirring up the rest of the 9-million case Scotch market would be enormous. However, Premier Liquor’s Notarius noted that, thus far, interest in the blended brands he carries has declined overall even as interest in single malts has surged. “Suppliers need to find a way of relating single malts to the blends,” he said.

Many companies are trying to do just that. Some focus on educating consumers about the fact that the blended brands contain single malts. As part of its Mentor Program for the Johnnie Walker brands, for example, Schieffelin & Somerset sponsors component tastings for consumers, where the single malts contained in the Johnnie Walker brands are sampled along with Johnnie Walker itself. “Part of our challenge on blends is, number one, to educate consumers that one [single malt versus blend] is not better or worse than the other, they’re just different, and number two, that the malts they know and respect are part of our blends,” said Steve Meyers, brand manager for Johnnie Walker Black and Gold.

The Famous Grouse is taking this tack with a gift box promotion, available until Father’s Day, that combines a bottle of The Famous Grouse with miniature bottles of Highland Park and Tamdhu, two of its component malts. And, in an interesting reverse, UDV North America has also included a 50 ml bottle of The Famous Grouse as an on-pack to the single malt Highland Park. “We’re trying to change the way malt drinkers think about blends,” explained Whitney Repp, marketing manager for the brands.

Suppliers seek to bridge the gap between single malts in two other ways: with vatted brands and with super- and ultrapremium versions of their blended brands.

Vatted Scotch is different from blended Scotch. A blended Scotch combines both single malts and grain whiskies. A vatted, or pure malt, Scotch is made by combining several single malts but contains no grain whisky.

Some suppliers — such as Jim Beam Brands, with its Sheep Dip, and Heaven Hill Distilleries, with its Glen Salen — position these brands below the single malts in price. “Glen Salen [which retails for $12.99 to $14.99] is for someone who isn’t quite sure about single malts and about taking the leap to them,” said Stephen Kauffman, group marketing manager for Heaven Hill.

Other vatted brands are meant to be superpremium products themselves, such as Chivas Brothers The Century of Malts, a vatted brand made of 100 single malts, introduced last April by Seagram. The brand retails for approximately $50.

And Schieffelin & Somerset plans to position its vatted brand, Johnnie Walker Pure Malt (to be introduced at the end of the year) as a superpremium, probably somewhere between Johnnie Walker Black and Johnnie Walker Gold in price.

Super- and ultrapremium blends also to act as bridge between blends and single malts. Seagram recently introduced a limited-edition 18-year-old Chivas Regal, retailing in the $60 range. “We have two goals: number one, it helps put a halo around Chivas, and number two, it addresses the growing market for superpremium Scotch whisky. People are looking for the best Scotch and for something new and different,” explained Seagram’s Dubin. He believes that the single malt phenomena has already sparked interest in blends. “The emerging superpremium market [for blends] definitely has been triggered by single malts,” he said. “There are a lot of articles in consumer magazines, larger Scotch sections in stores and a lot of enthusiasm.”

And what of the mainstream blended Scotch brands? Currently, the number-one Scotch on the market, Dewar’s, is in limbo. When Guinness and Grand Metropolitan merged at the end of last year, the Federal Trade Commission required the new company, Diageo, to divest itself of Dewar’s. A new owner has not yet been named.

Meanwhile, J&B is expecting to launch a new campaign this summer, the goal of which is to “transcend the Scotch category,” according to Alan Weber, general manager of the aged spirits group for UDV North America. The idea is to position J&B as a “contemporary, hip brown spirit with a history and heritage behind it” that will compete against a whole range of successful brown spirits, such as Jack Daniel’s.

In a way, Scotch has turned conventional distilled spirits wisdom on its head. “The phenomenon is almost strange: entry-level consumers are coming into Scotch through the single malts,” said Nunez of Schieffelin & Somerset, who observed that consumers usually start with the premium or price/value products in a segment and then trade up.

Retailer Notarius has seen the same thing and is happy about it. “Scotch has shown that having a distinctive flavor doesn’t mean you can’t attract younger consumers, which was one of the old fallacies in the industry,” he said. “Scotch is a real bright light, one that can serve as a beacon for a new way to think about all spirits.”

Cheryl Ursin is contributing editor to Beverage & Food Dynamics and Cheers magazines. Her writing has also appeared in the New York Times and other publications.

Leading Brands of Scotch

(Thousands of 9-Liter Cases)

Brand Type Supplier 1996 1997(p) % Change
Blended Scotch
Dewar’s FB Schieffelin & Somerset 1,495 1,445 -3.3%
Johnnie Walker Red FB Schieffelin & Somerset 880 895 1.7%
Clan MacGregor USB William Grant & Sons 715 700 -2.1%
J & B FB IDV North America 690 644 -6.7%
Scoresby USB UD USA 590 575 -2.5%
Chivas Regal FB Seagram Americas 545 500 -8.3%
Johnnie Walker Black FB Schieffelin & Somerset 450 485 7.8%
Cutty Sark FB Hiram Walker &Sons 329 320 -2.7%
Cluny USB Heaven Hill Distilleries 255 255 0.0%
Inver House USB Barton Brands 245 253 3.3%
Total Leading Blends 6,194 6,072 -2.0%
Single Malt Scotch
The Glenlivet SM Seagran Americas 170 175 2.9%
Glenfiddich SM William Grant & Sons 97 105 8.2%
The Macallan SM Remy Amerique 39 52 33.3%
Glenmorangie SM Brown-Forman Beverages 22 30 36.4%
The Balvenie SM William Grant & Sons 15 23 53.3%
Total Leading Single Malt 343 385 12.2%
Others 3,362 3,258 -3.1%
Total Scotch 9,899 9,715 -1.9%
(p) 1997 brand numbers are preliminary. FB=Foreign Bottled. USB=U.S. Bottled. SM=Single Malt.
Source: Adams Handbook Advance 1998.

Springing Into Action


JOHNNIE WALKER…(Schieffelin & Somerset)

General-market and ethnic-market advertising campaigns are gearing up for Black Label. The brand is continuing its Mentor Program of consumer tastings and sponsoring an expanded ScotsFest marketing campaign.

CHIVAS REGAL…(Seagram Americas)
Chivas is due to launch a new advertising and public relations campaign this spring.

7003SC02CUTTY SARK… (Hiram Walker & Sons)
The brand is running a consumer contest, from March until June, for the chance to serve as a member of the crew on one of the ships in the Cutty Sark Tall Ships Race, which, this August, will go from Ireland to Spain. The brand will also offer a Ships Decanter pack, in markets where legal, containing a glass decanter and a 750ml bottle of the brand.

(Hiram Walker & Sons)
The Defenders of the Malt — including Laphroaig, Scapa and Glendronach — offers a tasting kit, including a video.

(United Distillers & Vintners North America)
A new gift box includes miniature bottles of Highland Park and Tamdhu, two of the brand’s component malts. Promotions include consumer offer for four historic golf posters.

ABERLOUR…(Austin, Nichols)
New advertising is set to launch in the second quarter.

BUCHANAN’S…(United Distillers & Vintners North America)
The brand is continuing its advertising and PR campaign targeted at Hispanic-Americans.

(William Grant & Sons)
A consumer offer for Clan MacGregor gear features shirts, caps and jackets.

ClunyCLUNY…(Heaven Hill Distilleries)
Cluny continues its “The Perfect Round” campaign with golf-themed point-of-sale materials.

ISLE OF JURA…(Heaven Hill Distilleries)
Off-premise merchandising includes two new shelf-talkers highlighting favorable reviews.

BalvenieTHE BALVENIE…(William Grant & Sons)
A consumer premium offer features a selection of three hand-rolled cigars, chosen to complement the Scotch.

THE DALMORE…(Jim Beam Brands)
One of several of the company’s superpremium brands is scheduled to be featured in a new advertising campaign.

…(Barton Brands)
A consumer offer, in markets where legal, for a free copy of The Orvis Fly Fishing Guide.


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