News Column

Scotch Whisky Sales Raise Distillers' Spirits

December 12, 2013

Staff Reports -- HispanicBusiness.com

Johnnie Walker launched its Platinum Label aimed at high-end consumers.
Johnnie Walker launched its Platinum Label aimed at high-end consumers.

Distillers of high-end Scotch whisky have a lot to cheer about this holiday season.

Sales of super-premium Scotch whisky were up more than 22 percent in 2012, according to the Distilled Spirits Council of the United States, and are only expected to increase as U.S. Hispanic consumers continue to trade up to higher-priced brands.

Looking to grab a greater share of the $1.8 billion market, Johnnie Walker introduced its Platinum Label in August. Crafted using 18-year-old Scotch whiskies that were created for private gatherings and never sold to the public. The liquor retails for $110 per 750ml bottle.

"So far (the) Platinum Label has been incredibly well received by the vast majority of consumers and customers," said Stephen Wilson, a Master of Whisky for Johnnie Walker, told HispanicBusiness.com. "It's an affordable luxury for many people."

Thanks to an improving economy, affluent consumers are bypassing the value brands and switching to the premium brands. Sales were up for high-end premium (9.8 percent) and super premium (22.2 percent) brands in 2012 as compared to 2011, according to the trade association. During the same period, sales dropped by 8.3 percent for value brands, and premium brands were down 1.5 percent.

The trade association's report says distillers have benefited from drinkers' desire to "trade up." Since the more expensive Scotch whiskies are either aged longer or in special casks, distillers can command higher prices.

While the Platinum Label has been offered outside North America for the past two years, Johnnie Walker's parent company, Diageo, felt the time was right to bring it to the U.S.

"Johnnie Walker Platinum Label is the brand's biggest product launch since the introduction of the Blue Label," Brian Radics, Diageo's director of Scotch whisky, said in a press release. "It has been received extremely well globally. The quality of the liquid and the flavor of the whisky will continue to bolster our position as the world's leading Scotch whisky brand."

Distillers such Johnnie Walker with its Platinum Label are perfectly positioned to capture the rising market. The blenders at Johnnie Walker have 7.4 million casks to choose from, having produced Scotch whisky since 1820. For its Platinum Label, all of the Scotch whisky had to be a minimum of 18 years old.

"A great blended whisky is a combination of art and science. Our blenders are constantly evaluating all of the exceptional whiskies we have aging," Wilson said. "When creating a private label or private blend, we first think about the overall flavor profile. From there, our blenders use their knowledge, artistry and craftsmanship to create the depth, layers and flavors of our blends."

Master Blender Jim Beveridge said the whiskies used to create the blend come from a limited number of casks and from just 20 to 25 distilleries.

Johnnie Walker describes the taste of its Platinum Label as a "waxy, fruity and sweet taste mixed with slight drying astringency and subtle smokiness." The recommended serve for the Platinum Label is neat or with a few drops of distilled water.

Diageo is confident the Platinum Label will help the company deliver solid growth even as it faces increased competition from boutique whiskey distillers in the U.S. Sales of the Johnnie Walker brands were up 13 percent in 2013, according to corporate filings. Overall, sales of Diageo brands, which include notable products Smirnoff vodka and Captain Morgan rum, were up 5.1 percent in North America during the first quarter that ended Sept. 30.

Diageo CEO Ivan Menezes is focusing on countries such as Brazil and Mexico, and expects 50 percent of sales to come from emerging markets by 2015.

For now the company will have to wait and see if the Platinum Label will be as popular in the U.S. as it is internationally. Do consumers have to worry that Johnnie Walker could run out of the Platinum Label anytime soon?

"As long as we have the perfect whiskies available, we'll continue to produce Johnnie Walker Platinum," Wilson said.


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