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US drinkers prefer bourbon

News, 06 April 2015
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ATLANTA: Sales of bourbon in the US are growing eight times as fast as that of Scotch whisky, with leading global players such as Diageo and Suntory switching their focus in this market.

Figures from the Distilled Spirits Council of the United States, reported in the Wall Street Journal, indicate that bourbon sales volumes have leapt 33.5% since 2010 while those of Scotch have risen only 4.2%. A third classification, Tennessee whiskey, has also increased faster than Scotch, at 9.2%.

According to Trevor Stirling, an analyst at Bernstein Research, "Bourbon, Tennessee and Irish whiskey are taking over as the engines for growth," in the US.

And Rosemary Gallagher, a spokeswoman for the Scotch Whisky Association, conceded that "bourbon is chipping into our sales".

She added that the US spirits sector was very competitive "and American whiskeys are a big factor in that" – a bottle of bourbon costs on average around 25% less than a bottle of Scotch. Bourbon also lends itself more readily to being mixed.

Major players in the world of whisky are now taking a closer interest in bourbon in the US market, with Diageo, for example, investing heavily in production facilities in Kentucky, while Suntory bought the Jim Beam brand last year.

Not that the Scotch whisky market is all doom and gloom, as top end brands continue to sell well. The Wall Street Journal reported that it was the lower priced, blended Scotches that were suffering most – with sales down around 5% in 2014.

Higher priced blends edged ahead, but it was the single malt market – brands like Glenlivet and the Macallan – that was really keeping overall Scotch sales moving upwards with volume sales up 46% over the past five years. And this is even though a single malt costs around three times as much as bourbon.

This is line with a trend towards premiumisation that can be seen around the world, with Johnnie Walker, for example, positioning itself as a premium brand in Asia to attract its target audience of men aged between 25 and 35.

Data sourced from Wall Street Journal; additional content by Warc staff

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