Perhaps the future of Scotch whisky in America can be best discerned by going to the source. In the Gleneagles Hotel in Perthshire, Scotland, the beverage manager, Tom Jolly, is about to double his offering of blended Scotches at the velvet- and marble-rich Century Bar to 20 labels. “Blended whisky is becoming popular again,” he says. “I see it in what my customers, many of whom hadn’t tried blended Scotch in a long while, are ordering here. They’re sipping blends, they’re drinking them in highballs with soda and they’re asking us for new cocktail recipes. Blended Scotch is on the rise. There’s a movement going on.”
That movement could well cross the Atlantic. Gleneagles, which reserves one lounge called the Blue Bar as a showcase for the prestige blended marque Johnnie Walker Blue Label, caters to a substantial American clientele that can afford $150 pours of Scotch, rooms priced at $800 or more a night and its tournament-level golf courses. When they aren’t engaged in falconry lessons and hunting for deer on the resort’s sprawling grounds, Gleneagles’ guests are tastemakers who know their way around a well-stocked back bar.
It certainly isn’t a groundswell yet, but blended Scotch sales in the United States eked out a nearly 1-percent gain in 2016 to 6.19 million nine-liter cases, according to Impact Databank. The growth came after a decades-long decline for the category, which has lost volume ever year since 1983. Even at current levels, it’s worth noting that blended Scotch still outsells its celebrated single malt cousin by nearly 4 to 1 in case volume.
The drinkers who once kept the biggest blended brands afloat are aging and dying, pushing Scotch marketers to find a new audiences for blends. Thus it was that the brand manager for Bacardi-owned Dewar’s was at the Pitchfork Music Festival recently in Chicago, with the Bacardi booth sponsoring chef Michael Voltaggio’s Scotch eggs and the mixologist Gn Chan’s cocktails made with Dewar’s Scotch. When not listening to Angel Olsen and Parliament Funkadelic onstage, the young crowd thoroughly enjoyed the Scotch vibe.
Young people aren’t necessarily drawn to the Dewar’s White Label at $21.95 a 750-ml. But they are discovering the mid-tier 12- and 15-year-old Dewar’s, priced at $27 and $45, respectively, according to Dewar’s brand director Michael Calabrese. “Our research shows the sort of millennials who attend Pitchfork are willing to experiment with our higher-end blended Scotch,” he says.
Chris Vogt, brand manager for Edrington Americas’ blends Cutty Sark (the Original is $21 a 750-ml.) and Famous Grouse ($24), is targeting the under-35 set. “We have to become more relevant and do a better job of educating young people that not all Scotch is peaty and smoky,” he says. “I’m also trying to get bartenders to use more blended Scotch in cocktails. We want to get our brands front and center in the whisky repertoire at bars.”
After losing nearly 4 percent of its sales in the United States in 2015, Johnnie Walker regained it all last year, led by an 8-percent jump in the flagship Johnnie Walker Black Label ($34 a 750-ml.). Brand owner Diageo North America is working hard to keep the Johnnie Walker name fresh by introducing new expressions clustered in its Blenders’ Batch range, priced at around $30. The latest offering is the Wine Cask Blend, which launched in August. Similar new releases are expected to follow.
Sandra Padmanabhan, senior brand manager for Johnnie Walker, believes that blended Scotch has been unfairly pigeonholed as a subcategory of single malts. “There is the feeling among consumers that blended Scotch is lower quality, which is certainly not the case,” she says. “Right now single malts are trendy, while blended whisky is misunderstood. We’re working to change that.”
Diageo and others rely on a stable of roving ambassadors for their marketing. Pernod Ricard USA employs a half-dozen representatives in the United States to support Chivas Regal, and the company is considering an increase in that number later this year. “We like to get our ambassadors in front of the trade and educate them about our products,” says Chivas brand director Shefali Murdia. “They’re becoming the voice of our brand, and our ears out in the marketplace as we listen to feedback.”
Like its competitors, Chivas Regal is adding more premium expressions to get people to move beyond its entry-level 12-year-old ($24 a 750-ml.). Chivas Regal Extra, featuring liquid matured in part in Oloroso Sherry casks and priced at about $35, was introduced in a few markets in 2015 and this year went national. Then there’s Chivas Regal Ultis, a blend of five single malts introduced a year ago and priced at $200. It’s moving beyond its original markets of New York, Texas, Florida and California to Illinois, New Jersey and Washington, D.C. These non-age statement blends stand in contrast to older Chivas expressions such as 18-year-old ($80), 25-year-old ($300) and Royal Salute 21-year-old ($200). “These days age statements are becoming less important,” Murdia insists. “Younger consumers entering the category care more about other things, like the nose and the taste. You’re likely to see fewer and fewer age statements in the future.”
In 2015, William Grant & Sons introduced its Grant’s Ale Cask label ($23 a 750-ml.), positioned just above the standard Grant’s blend ($21). A Sherry-finished version is available in the United Kingdom, but there are no plans to bring it here. Grant’s also offers a range of age-statement whiskies ranging as high as 25 years in Canada, but has no plans to bring them to the United States.
“Age statements are more important in single malts,” says Andrew Nash, vice president of whiskies at William Grant & Sons. “If I have a limited amount of 18-year-old Glenfiddich liquid in barrel, it makes more sense to sell that as a Glenfiddich 18-year-old at $100 a bottle or so than to sell it as part of a blended whisky under the Grant’s name for $60. You gain a real premium in selling single malt with an age statement compared with blended Scotch with an age statement.”
Nash’s greatest challenge may be holding on to market share of his company’s Clan MacGregor brand, which has seen volume slip by 25 percent since 2010 to 438,000 cases last year. Priced at around $20 a 1.75-liter bottle, Clan MacGregor is regularly promoted with $2 vouchers to help maintain its position within a hotly competitive value niche that includes names like Scoresby and Cluny.
William Grant employs some two dozen brand ambassadors in the United States to promote the advantages of its brands, including its upscale Monkey Shoulder blended malt ($32 a 750-ml.). That’s impressive support, but necessary in these times. “The media landscape is so fragmented today,” Nash explains. “As a result, the role of the brand ambassador has been growing.”
Still, the industry is still coming up short in its educational efforts, says Dennis Carr, president and CEO of Anchor Distilling, which distributes the Blue Hanger blend ($100 a 750-ml.) from Berry Bros. & Rudd. He thinks the brand and other upmarket blends such as Compass Box offer the quality that can get people interested in blends. “The blended Scotch business above $60 is a pretty small niche now,” Carr observes. “But it’s a great opportunity. Young people don’t really need tradition. They want quality and they want something that’s new and exciting.”
Flavien Desoblin, owner of the Brandy Library in New York City, labels the aversion to blended Scotch in some places as a sort of urban snobbery. “It’s considered fancy in New York to drink a single malt Scotch or a Japanese whiskey,” he says. “But people don’t want to admit that they actually like a Chivas Regal blend, which can be a very good value. It’s the same thing with wine—they don’t want to admit they like a $12 bottle of Cabernet.” At Brandy Library, single malts outsell Scotch blends by nearly 20 to 1. Desoblin sees a clear generational divide. “Anybody over 45 here is still possibly brand-loyal to a blend,” he adds. “They’ve made their choice and know what they like.”
Margins And Mixology
At the 6-unit Wisconsin retailer Trig’s Cellar 70, manager Dennis Kohl says brands like Chivas Regal, Johnnie Walker Black and Dimple Pinch continue to perform well among his older customers, with the Dimple Pinch 15-year-old selling steadily for $55 a 750-ml. Yet he also notices a small rush of interest from younger shoppers. “I’m encountering young people who view blended Scotch as an easier-drinking alternative to single malt,” he says.
Price plays an important role in blended sales. Jack Backman, owner of the single-location Cheers Liquor Mart in Colorado Springs, Colorado, carries Dewar’s White Label in 1.75-liter bottles ($39), but it doesn’t sell well until it goes on sale at $33. His current wholesale cost is $28. “I used to be able to sell that bottle at $29.99 on ad, and it flew out of here, but the companies have been raising their prices and sales are more challenging,” Backman says. For a 1.75-liter bottle of J.&B., Backman’s wholesale cost is $33, resulting in an everyday price of $42. “At that level, customers will step over to a lower-end single malt as an alternative,” he explains. “My cost on that J.&B. was just $28 five years ago, and I could sell it for six dollars less and really move it.”
Like many retailers, Backman is carrying a narrower assortment of sizes. Increasingly, he’s offering value and even mid-tier blends in 1.75-liter bottles. “I once had 30 linear feet of Bourbon on my shelves,” he says. “Now I have over 100 feet of Bourbon. I also have close to 200 single malt labels, which I can’t cut back. I’ve got to find space somewhere.”
At seafood and steak restaurant III Forks in Chicago, general manager Jeremy Vass carries J. & B., Dewar’s and Cutty Sark, each for around $9 a 2-ounce pour. They are all “holding on,” he says, but as in many steakhouses with a big expense account clientele, Johnnie Walker Blue Label stands out, priced at $49 a pour. “Johnnie Walker Blue is the one Scotch blend that sells across age groups,” Vass says. “It’s been so successful in marketing itself as a top-tier product.”
At the Scottish-themed Tam O’Shanter restaurant in Los Angeles, general manager John Lindquist sells Johnnie Walker Blue Label at $38 a 1.5-ounce pour, yet has seen greater interest in the Compass Box brand. At Tam O’Shanter, Compass Box Peat Monster sells for $18 a pour, while the brand’s Hedonism blended grain whisky is $20. “People are really catching on to the good work independent blenders like Compass Box are doing,” Lindquist says.
Kevin Fahey, mixologist at the Staytion Market and Bar in the Renaissance Hotel in Chicago, has campaigned to introduce his customers to blended Scotch recently. He often starts them with Johnnie Walker Black, mixing it with a house-made grapefruit chamomile soda into a cocktail called the Hummingbird ($15). He also washes Cutty Sark with duck fat and is experimenting with infusing other Scotch blends with strawberries. Gradually, he’s luring millennials away from Bourbon and Japanese whiskies to try these Scotches. “I’m trying to open the gates for the new generation,” Fahey concludes.