Premiumization is clearly paying off for William Grant & Sons USA. The marketer has enjoyed some of the best growth in the industry in recent years, including 5.5-percent aggregate volume growth for its portfolio in 2015. While William Grant’s more mainstream brands like Clan MacGregor blended Scotch whisky and Sailor Jerry spiced rum have struggled of late, such higher-end offerings as Hendrick’s gin, Milagro Tequila, Tullamore DEW Irish whiskey and Glenfiddich single malt Scotch are thriving. Those four brands—all of which retail for more than $25 a 750-ml. bottle—each achieved double-digit gains in 2015, combining for more than 140,000 cases in incremental growth. Senior editor Christina Jelski recently caught up with Jonathan Yusen, William Grant & Sons’ president and managing director for North America, to discuss the portfolio and plans for the coming year.
MW: How are William Grant & Sons’ whiskies performing?
Yusen: Glenfiddich’s growth is running at about 13 percent annually. Much of the excitement last year was around our 14-year-old Bourbon Barrel Reserve, which will exceed 20,000 cases this year, and we’ve recently launched our Glenfiddich Experimental Series India Pale Ale Finish. Meanwhile, Tullamore DEW will surpass 200,000 cases this year. Irish whiskey has evolved from being a one-brand story into a full category, and Tullamore DEW is now in the second spot in the U.S. market. When we acquired the brand in 2010, it was at 64,000 cases and needed a complete refresh—new packaging, new positioning and recommitment to the liquid. We invested in all those areas, and we’re now seeing the results. Elsewhere in the portfolio, Monkey Shoulder blended malt Scotch whisky is a recent success. It’s on pace to surpass 50,000 cases in 2017, and it’s in high demand. We focus on Monkey Shoulder’s versatility. It makes exceptional cocktails. We’re looking to ignite the on-trade in a Scotch category that, frankly, has been better known for retail consumption. By emphasizing mixology, we’re bringing new consumers into the category.
MW: How is Hendrick’s achieving such solid progress in a gin category that’s long been struggling?
Yusen: Dozens of new competitors have emerged in the premium and super-premium gin category, so it’s now highly competitive. That growth has been driven by the craft movement and the resurgence of the high-end gin segment, and Hendrick’s has played a large role there. Our focus is around the brand’s quirky and unusual branding, but it’s more about ensuring that people are familiar with the quality and uniqueness of the liquid. For 2016, we’ve continued to see growth that’s similar to the trends of recent years.
MW: Milagro was up 20 percent to 190,000 cases in 2015 and has emerged as one of the fastest-growing Tequila brands in the United States. What’s propelling that growth?
Yusen: Milagro benefits from playing at a few different price points. We operate in premium Tequila with the core brand and in ultra-premium Tequila with Milagro Select Barrel Reserve. We’ve seen consumers drawn to both directions of the price spectrum. Our Reposado saw exceptional growth in 2016, indicating that consumers and the trade are becoming more educated about the Tequila category, just as has occurred with brown spirits.
MW: Drambuie liqueur—which does over 60,000 cases in the United States—is a relatively new addition to William Grant’s stable, and the brand recently received a refresh. What is your strategy for raising Drambuie’s profile in the U.S. market?
Yusen: Drambuie is a diamond in the rough. Since we acquired it in 2014, bartenders and mixologists have been more creative with the brand than at any time in its long history. They’re taking it far beyond the Rusty Nail cocktail, which Drambuie is known for, and making a Drambuie Collins or a Drambuie Sidecar, as well as even more creative concoctions. People are not only discovering the brand, but also putting it on their cocktail lists. We’re accelerating our packaging work to bring back a lot of the cues from Drambuie’s storied past, but also to reference all this new creativity. That new package launched in time for the holidays, and we look forward to seeing the industry’s response.
MW: After years of rapid progress, Sailor Jerry appears to have hit a speed bump. What’s the update?
Yusen: We haven’t seen the same level of growth in spiced rum that we have in other categories. But our focus remains very much on building Sailor Jerry by celebrating the legacy of Norman Collins as the father of old-school tattoo art. This year was our first year of a partnership with New York Fleet Week, during which we highlighted Norman Collins’ heritage and his celebration of our service members. Sailor Jerry is seeing accelerated growth this year, but fighting against a very competitive spiced rum category. There’s a significant amount of price-promotion coming from some of our competitors.
MW: How is Reyka faring amid vodka’s slowing growth?
Yusen: Reyka will exceed 100,000 cases this year in the United States. It has grown by more than 25 percent annually since 2012. We continue to be enthusiastic about Reyka and, more broadly, about the overall vodka category, despite some of the challenges it has seen. Reyka benefits from the recent focus on craft spirits. The brand’s story extends to Iceland—not just the great culture, but also the glacial waters that we use to make Reyka. The liquid is absolutely paramount. We’re seeing renewed interest within the vodka category—both on- and off-premise—roughly around the price tier of $24 that Reyka plays in, as well as among brands that have a great story to tell.
MW: Where else in the portfolio do you see key opportunities in 2017?
Yusen: We continue to be thrilled with our partnership with Flor de Caña, a Nicaraguan estate rum and a brand that has thrived over the course of our relationship. When we brought on Flor de Caña in mid-2014, it was at roughly 98,000 cases, and last year, we were near 140,000 cases. We’ve also seen a lot of enthusiasm around the mezcal category, and our Montelobos brand has been in high-end bars over the last several years. We anticipate greater success with that product. Also, about a year ago, we took Hudson whiskey from a 375-ml. bottle and added a 750-ml. bottle due to demand from bartenders and retailers. With that package, we doubled Hudson’s business last year.