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03.2011

Massachusetts Beverage Business

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Article By: Lew Bryson

The madness is over.

The shamrocks are falling off the walls.

The green has been worn, Erin go bragh is Erin bragh gone.

And the spike in Irish whiskey sales is over. 


It’s March again, and we’ve got an Irish whiskey story for you . . . again.

But what if we ran our annual Irish whiskey story in August, say, and treated Irish whiskey like other spirits brands?


What if you could sell Irish whiskey like every day of the year was March 16?  Wouldn’t that be grand, now?


It is ready, and the numbers confirm it.  “The Irish whiskey category has nearly tripled in size over the past 5 years alone,” says Wayne Hartunian, Pernod Ricard USA’s Vice President for whiskies and cognacs – the Jameson man.  “Consumption is becoming more year-round.  Both on- and off-premise operators are recognizing this, and the overall huge additional potential of the category, thus promoting it more year-round, providing larger displays in the off-premise, drink features in the on-premise, etc.”
Hartunian provided numbers from Pernod Ricard’s “Tipping Point” category management program.  Splitting Irish whiskey sales into monthly percentages shows that in eight out of twelve months, there is a steady 7% of sales.  March is a 12% month, but October and November are 9% months, and December actually outpaces March at 14%.  March and December are significant spikes, but the difference is hardly night and day. 
Save those numbers for a moment, though, because there are better ones.  Irish whiskey continues to be the fastest-growing category in spirits – largely because of Jameson, which accounts for better than 2/3 of the category sales and the huge majority of the growth – and the growth is accelerating.  The best number for the category, though, is that Jameson annual sales reached 1,OOO,OOO cases for the first time in late 2O1O. 
That’s a milestone with some significance, and not just for Jameson.  Juliet Balian was happy about it: “The million cases is an important point,” she emphasizes.  “When Cuervo reached a million cases, things really heated up, and that helped all the tequilas.  Greater awareness, greater peer group acceptance drives growth in any category.  Diversification is very good.  Offering variety so people have choices is going to grow the category the best.  They want to try new things, they want to experience different tastes now.  If tequila had just stayed Cuervo, it wouldn’t be as big.”


MORE, MORE, MORE
Truly, nothing succeeds like success, as it draws new customers and new brands into the category.  “There are a lot more labels in the category,” notes Tony Anthony, Manager at Kappy’s in Peabody, “a lot more people paying attention to it.  It doesn’t hurt the category.  It’s growing so fast it can absorb these new labels.  There are a lot of pricepoints, from $2O to $14O, and there’s a market for all that high-end stuff.  It’s been a fulfilling category in the store.”
More brands, more labels in the category, doesn’t seem to worry the established brands; the more the merrier.  “The fact that there are new category entrants signals to us that Irish whiskey is here to stay,” said Yvonne Briese, Director of Marketing for Bushmills, “that the region is garnering the recognition it rightly deserves.  Of course new brands will emerge and we welcome them into the space as we witness an increasing popularity of the whiskeys category as a whole.”
True, says Gary Park, owner at Gary’s Liquors in Chestnut Hill; more labels are better, because consumers love exploration and discovery.  “The great thing is, ten years ago, all you could get was Jameson and Bushmills,” he recalls.  “Why bother exploring!  Black Bush was the first step up.  It’s worth the consumers’ time now.  They’re late to the party, these guys, they really are.  Every other category has a tremendous variety to jump around in.  Now people will move around in the category – once they get in.”
The hard part, according to Joe Howell at Federal Wine & Spirits in Boston, is breaking some folks away from those familiar Jameson and Bushmills labels; it’s the Irish-American family conservatism.  “For example, Bushmills has some really great products,” he explains.  “People that know them, like them; but it’s tough to get people to hit on the Bushmills because the Jameson name is so strong.  People have their heritage, and they stick with Bushmills or Jameson depending where they were from in Ireland. 
“The Jameson name is so solid,” he continues.  “It’s like champagnes: people really don’t know them, know the brands, but people who don’t even know how to pronounce Veueve Clicquot – I probably don’t know how to pronounce it right – that’s what they want.  That’s what Jameson is like.  You try to put another brand in front of them, and they just go to the Jameson.”  Hartunian notes, in a classic understatement, that “Jameson’s very strong and unique brand equity is clearly a differentiator.”  Indeed.

THE RIVALS
Jameson means the standard bottling to most people, and it’s been a huge success, driving the success of the category.  There’s even finally been some success with selling it as something other than a shot.  “Mixability does help [selling year-round],” notes Hartunian, “and a drink that is becoming very popular is Jameson and ginger ale.  The largest on-premise account for Jameson volume in the world is in the US (The Local, in Minneapolis), and they have built a very successful business by promoting The Big Ginger  as their primary featured drink.”  Hartunian supplied research that showed 5O% of Jack Daniel’s consumption, and 38% of Crown Royal, is with cola or ginger ale; that’s a mix Jameson wants to be part of.
Anthony at Kappy’s sees it selling “across the board: it is men and women, a lot of younger people, in their 3Os.  We aggressively price the 1.75s – Jameson and Bushmills 1.75s are some of the biggest sellers in the store – and the Jameson has taken the lead in the category by far.”  There’s your volume. 
Jameson is huge, the 8OO pound gorilla in the category, but the Midleton distillery, source of the whiskeys, produces other great whiskeys too, whiskeys that are great upsells.  Hartunian explains how it works.  “There are a number of factors that give our whiskies their unique taste personalities,” he begins, “the types of casks used, the time spent aging and the pot still content; and these different factors create a number of taste experiences.  Jameson is sweet and smooth, while Powers Gold Label is robust and spicy; Redbreast’s pure pot still character is complex and fruity in comparison to the sweet vanilla and melon notes of Midleton Very Rare.”
Joe Howell is excited about a new upsell Midleton delivered this year; an extra-aged version of Redbreast.  “I love to see that the Redbreast 15 came in,” he says.  “People were very happy, it’s sailing right along, and I had a hard time keeping it on the shelf.  I hope they keep that going for a good while.”
Bushmills is the strong second, much smaller than Jameson, but a solid alternative with a full portfolio.  It’s every bit as well-known.
“Bushmills also produces a distinct Irish whiskey,” she says, “which only uses malted barley.  At the Old Bushmills Distillery, the first spirit is distilled in copper pot stills.  When using pot stills, the size and shape bear great influence on the whiskey-to-be.  Bushmills has nine relatively small stills with tall, slender necks, which produce a light and elegant spirit.”
The upsell path for Bushmills is aided by the brand’s set look: the slim, square bottles and the simple labels.  As Gary Park noted, Black Bush is the usual first step up, with the 1O Year Old as an alternative.  The 16 Year Old – the “Three Wood” –  and the rare 21 Year Old is a special treat. 

CATEGORY VARIETY
Bushmills may be the number two-selling brand in the US, but worldwide, that spot is held by Tullamore Dew, which currently comes in third here.  The brand was recently sold to William Grant & Sons (the Scotch whisky maker), though, and they have plans for the brand. 
“While we are still refining what that strategy will be,” Brand Director Kenneth Reilly says, “I can tell you that Tullamore Dew will be benefiting from William Grant’ds approach to building brands in a number of ways.  Firstly, we will be hiring a Tullamore Dew brand ambassador for the US, in addition to a global brand ambassador.  These individuals will be at the forefront of engaging with consumers, the trade and the media.  Secondly, the 1O Year Old, 12 Year Old and Single Malt higher marques will be at the forefront of our strategy.”
Tullamore has made a fast-moving return to the US market, quickly adding premium whiskeys to the original standard bottling: 1O Year Old Reserve, 12 Year Old Special Reserve, and a 1O year old Single Malt, as well as returning the iconic (their word, but it’s true, given the number of old ones you still see in bars) Tullamore Dew Crock package.  Given the progress, it probably won’t be long before we see a 16 or 18 Year Old super-premium . . . but Reilly’s not dropping any hints.
It’s the simplicity of it all – Jameson 12 Year Old and 18 Year Old, Bushmills 16 and 21 Year Old, and Tullamore’s 1O-1O-12 combo – that Gary Park thinks is the key to upselling Irish whiskey.  “It’s not really hard,” he says, “probably easier than Scotch.  The good thing is, there are choices, but there’s not 2OO like in single malts.  It’s straightforward: 1O Year Old, 12, 16, 18 Year Old, Gold.  They can experiment without being too concerned about going wrong.  If you’re a Dewar’s drinker and grab a bottle of Lagavulin to experiment, you’re done with single malts!”
Knappogue Castle is essentially all upsell; their standard expression is a 12-year-old single malt (although they do have their Clontarf blend, which will be getting a re-package this year).  “Knappogue has always been a very small single malt Irish whiskey with vintage dating,” laughs Juliet Balian when asked how her brand differentiates itself, “all of that was different.  We’ve changed the vintage to a 12-year-old.  We’re offering a product with more age without having the consumer do the math: when was it distilled, when was it bottled.  Now we are giving them a 12-year-old on a consistent basis.  And it is small: we sell 3OOO nine-bottle cases, it’s very small.
Knappogue has begun doing annual special releases to replace the excitement generated by the new vintages.  This year it’s the 16 Year Old Twin Wood, an older expression of the malt that’s been finished in sherry wood.  It comes with a distinctive red label. 
Balian is bullish on new labels.  “More products provide more differentiation,” she says.  “That’s how retailers should look at it as well.  Put out more products; that’s how you get people to look at the category.  More brands allows more people to participate. 
They want to try new things, they want to experience different tastes now.”

COOLEY AND COMPANY
A lot of the new brands on the market are coming from the highly decorated Cooley distillery.  Cooley was named malt advocate’s Distillery of the Year last year, and was the International Wine and Spirits Competition’s European Distiller of the Year for the past three years; and that’s just the awards the distillery itself has won; their whiskeys have won many more. 
Bryan Cook, the marketing manager for Cooley importer Gemini Spirits and Wine, notes that the awards have helped a lot.  “Definitely,” he says.  “It has raised awareness.” 
Cooley really presents a full range of whiskeys in their portfolio.  There’s the Tyrconnell single malt, with the new wood-finished editions; the peated Connemara range, with the new super-peaty (5Oppm phenols, for you super-peat geeks) Turf Mór; the Greenore grain whiskey, a small release at 18 years old (the oldest Irish grain whiskey on the market); and the entry-level blended Kilbeggan. 
Cooley doesn’t subscribe to the “Irish whiskey is triple-distilled” definition; they’re a double-distilling whiskey maker, like almost all Scotch whisky distillers.  That’s not the only difference; Connemara was for years the only peated Irish whiskey – in a country with a deep cultural connection with peat! – and Cooley sees that as part of their core philosophy.  Ask Cook if selling peated Irish whiskey is a tough proposition, and you’ll see how they’re thinking. 
“Not at all!” he insists.  “There are loads of consumers who love that smoky, peaty taste profile.  How can a retailer present a peated Irish whiskey to the consumer?  Like the rest of the portfolio, we present them as world class whiskeys first, and Irish second.  One of the hallmarks of Cooley is not to get cornered into the triple-distilled blend mindset.  They did some serious research and went back to making whiskey the way it was done hundreds of years ago.”  That’s Cooley’s whole approach to selling whiskey in a nutshell.
Cooley also sells whiskey to a number of brands; some openly admit they get their whiskey from Cooley – as Cooley wins more awards, more of these brands are proud to point it out! – some don’t, but the fact is there are a number of new Irish whiskey brands on the market, and a majority are sourced from Cooley.  How does that affect their reputation? 
“There’s a place for them all,” he says, “so we think it solidifies Cooley as the only distillery that can handle a full range of expressions.  In the end, the consumers win, because they get a great whiskey at a great price.” 
Michael Collins opens up about Cooley as their source.  “Each of the [Irish] distilleries has very distinctive production techniques and styles,” Brand Manager Abaigeal Hendron begins.  “What really makes Cooley stand out is a combination of several factors.  Their independence, not only in terms of ownership, but also in their overall entrepreneurial approach, really appealed to the Sidney Frank Importing Company. 
“We loved that they double distilled their whiskey,” she continues, “and had revived the used of peated malt.  We worked closely with their award winning master blender to determine which whiskeys to blend in order to achieve the overall profile we wanted.  As a result, our blend contains both malt whiskeys and grain whiskeys aged from 4 to 12 years.  For the single malt, we wanted a unique style, something the other distilleries in Ireland weren’t offering.  As Cooley is the only distillery to use peated malt, we chose a lightly peated single malt.  It’s a great product with which to introduce trade and consumers not only to a single malt from Ireland, but also to one unique in style.”
The single malt has been re-positioned as a 1O-year-old – attractive to the consumer – but the most noticeable difference is the new bottle design; a much more traditional look than the tall, slender shape it used to be.  “The new look of Michael Collins combines a traditional whiskey bottle with a striking label,” Hendron explains.  “The Celtic Trinity Swirl symbolizes the three pillars of independence represented by Michael Collins, The Sidney Frank Importing Company and The Cooley Distillery.”  Interesting . . . though what it’s going to mean to a customer might be a question.
Amir Peay’s John L. Sullivan Irish whiskey speaks right out to the customer: here’s a whiskey for Irish Americans . . . and it packs a punch!  Peay explains the origin of the brand: he was a big boxing fan – “I did freelance boxing journalism!” From a boxing family, he remembers his father would get a big kick out of offering him a handshake: “‘Shake the hand that shook the hand of John L. Sullivan!’ Up until the 195Os everyone in America knew who Sullivan was.”  When he decided he’d take his restaurant and bar experience and entrepreneurial energy to create a drink brand, John L. Sullivan Irish whiskey seemed like a natural. 
Peay went to Jack Teeling at Cooley and started talking whiskey.  “I didn’t want to take the same whiskey they were going to give to another company and slap a John L. Sullivan label on it,” he says, fiercely.  “It is absolutely unique.  I learned whiskey.  There’s so much room for differentiation.  You can start with grain or malt whiskey.  Is it peated or unpeated?  Column or pot still?  Bourbon cask?  First-fill or multi-use?  Sherry, port, Madeira?  How long does it age?  Did you finish in a different kind of barrel?  Do you do a blend, and how much grain, how much malt? 
“Who was John L. Sullivan?” he asks, explaining the philosophy that made the decision.  “Technically, he was an American, so let’s do bourbon barrels, and he’s a fighter, a big man, so first-fill barrels.  It’s a product of Ireland, aged in American barrels.  Perfect!”  The new brand has met success in Massachusetts, and Peay promises new expressions down the pike a bit. 
One more new brand hit the radar just recently: Kellan Irish whiskey.  Alberto Beraha, Vice-President of BerNiko LLC, Kellan’s importer, says: “Kellan is 1OO% aged in ex-bourbon barrels, made in the country’s only independently owned distillery.” [That would be Cooley.] 


364 DAYS A YEAR
That’s what you’ve got to work with . . . now how do you sell it more effectively after this month?  Well, maybe . . . just keep doing what you’re doing.  “The fact is that Irish whiskey is no longer dependent on March for volume,”  Tullamore’s Reilly states.  “December, for example, is the #1 month of the year for Tullamore Dew.  But March remains a great time of year to create awareness and drive trial.  St.Patrick’s Day remains a critical occasion, ‘as a tryer often becomes a buyer’ with Irish whiskey.  The reality is that consumption is no longer tied to an Irish occasion.” 
He follows up with some solid advice.  “Ensure that customers can easily find the Irish whiskey section (and Tullamore Dew within it),” he starts.  “Secondly, give customers a real choice within Irish whiskey (price points, variants, brands).  Third, educate customers by taking advantage of informative POS materials made available by suppliers (shelf talkers, tasting notes, etc).  Lastly, work with suppliers like William Grant to educate your staff on Tullamore Dew and other Irish whiskey brands.”

It’s a lot easier to give that kind of advice these days, because there is more real choice in the category, thanks to line extensions and new brands.  We’re even getting returns of brands like Paddy’s.  But it still comes down to showing the customer – educating the customer – about the easy approachability of Irish whiskey, this most friendly of brown goods.  “Irish has approachable image, taste and price,” says Balian, pinning it beautifully.  “You don’t have to be in your suit and tie to drink your Irish whiskey, like Scotch is consumed, a more formal way.”
Gary Park had a great final point about a category where the hardest name to pronounce is Knappogue (it’s ‘nah POAG’).  “It’s a great way to get into whiskey,” he says.  “People find it less intimidating than those names on the single malt labels you can’t even pronounce.  And a $12O top end looks pretty good when I’ve got a $2OOO bottle of Glenfiddich in the store!”
Friendly, reasonable, great-tasting.  Add in “growing faster than anything else”, and “about to break out”, and “sells year-round”, and you can see some really good reasons to consider upping your investment in Irish whiskey real estate.

THE CREAM ALWAYS RISES
You wouldn’t think there’s much point in writing about Irish cream, would you? After all, here’s the story on Irish cream: Baileys.
Right?  Well . . . kind of.  “Baileys is huge,” says Gary Park.  “Baileys is still a big item,” agrees Tony Anthony, manager at Kappy’s in Peabody.  And Joe Howell wraps it up by noting that with Baileys, “the bottle’s never big enough for people.”
But there are other products in the category.  Coole Swan usually comes up when you ask the question; a high-end product that goes for the luxe part of the market.  Howell is enthusiastic about it.  “Phenomenal product,” he says.  “It’s not known, and that’s the problem.  But you put it in people’s hands and they don’t forget it.  I’d love to see more bars and restaurants putting it out so people would get to know it.”
Some brands look to get under the Baileys pricepoint.  “The category can handle that, it’s very strong,” Anthony says.  “Carolans is big, St. Brendan’s is big.  The Irishman is fantastic.”
Gary Park sees that more as a ‘sale of the week’ phenomenon.  “Whoever’s the cheapest will sell,” he muses.  “The bottom end sells, but it doesn’t matter what’s on the label: it’s just a price.”
And then, of course, there’s Molly’s Irish Cream.  What?  Never heard of it?  You will.  The brand was introduced in Massachusetts on February 1.  “We waited a long time to find the right partner in Massachusetts,” says brand ambassador Carol Murphy, who represents Molly’s through Bord Bia, the Irish Food Board.  “We are very excited about placing the brand with Burke, a family-owned company with strong roots in the Irish community.”
Molly’s is a product of Terra Ltd., which was formed to buy the original “Emmet’s” Irish cream plant in Bailieboro, Ireland – which has been producing Irish cream since 1978 – from Diageo/Baileys; the management team are all ex-Baileys employees.  They are uniquely experienced in this business. 
To quote Murphy, “Molly’s is a natural fusion of fresh Irish dairy cream, aged Irish whiskey, smooth Irish spirits, and the finest natural chocolate.  One third of a bottle of Molly’s is pure fresh Irish cream, which is a comparable amount to that used in the higher priced cream liqueurs on the market.”
That’s right; Molly’s is banking on value.  They’re positioning themselves as a top quality Irish cream, approximately 4O% under the shelf price of Baileys.  “Molly’s puts its marketing spend in the quality of the liquid and supporting its price,” says Murphy, “as opposed to expensive advertising.”
Trial is what they’re hoping for, and with 5Oml minis at 99¢ each – “Fish bowls to hold the minis are a great impulse prompt at the register!” Murphy adds – they’re getting a great conversion rate.  “Tastings in NYC have achieved up to 7O% conversion rates,” she notes.  “Out of every ten people trialled, seven bought a bottle.”
So if you’re looking for a sure thing: keep stocking Baileys (as if you wouldn’t).  If you’re looking for a deluxe thing, try some Coole Swan.  If you’re looking for a price thing, try Brady’s, or Carolans, or O’Mara’s.  And if you’re looking for a new thing . . . try Molly’s.

THE ONLY SPIRIT WITH “IRISH” IN IT
Do you remember drinking Irish Mist?  I do; I used to sip it neat after dinner, I used to drizzle some over a cup of the first real snow of the season – a nice ritual when I lived in the country – and I still do use it to caramelize a ham slice for breakfast sometime (try that; it’s delicious). 
But I didn’t realize until recently that it’s the only Irish spirit with “Irish” in its trade name.  Oh, sure, other brands have “Irish” on the label – “Thus-and-Such Irish whiskey” – but for this cordial,  “Irish” is its first name.  That’s probably part of the reason for its dedicated core of Irish-American drinkers. 
“Irish Mist has an intensely loyal following in the eastern United States, particularly New York, New Jersey, Pennsylvania, and Massachusetts,” says Paul Caffrey, Brand Manager with Skyy Spirits.  “Traditionally, the brand has been enjoyed by a slightly older demographic of male and female drinkers, many with Irish-American roots, who have had the brand passed down through the generations.”
Loyal cores are good, but with Irish whiskey booming, there’s an opportunity – an imperative – to grab that momentum and try to break the spirit out of that enclave.  That’s been Skyy’s plan since getting the rights to the brand in 2OO6 (it shuffled around this year, but is solidly with Skyy as of September: both Skyy and Mist are now owned by Gruppo Campari), and led to a radical re-design of the traditional teardrop bottle to a more whiskey-like package in 2O1O. 
Skyy’s been putting more money behind the brand, including an on-premise “Meet the Misties” program using red-headed young women pouring Irish Mist and reciting Irish poetry.  Caffrey says it was “one of Irish Mist’s most successful marketing campaigns ever” (no kidding!), and that they’d seen a resurgence of interest in Mist with younger drinkers. 
They need that.  “Despite Irish Mist’s long history and heritage in the US and worldwide,” Caffrey frankly admits, “the brand’s sales have been relatively flat over the past few years.  Skyy Spirits’ recent purchase of the brand signals a renewed interest in putting some much-needed market muscle it.  There are high hopes that Irish Mist will become one of America’s favorite shot brands within the next few years.” 
The new bottle – which fits more neatly in a back bar than the old fat-bottomed one – will help that, as will suggestions of new ways to drink Mist besides the traditional ways I was used to.  “It can be enjoyed neat,” Caffrey suggests, “as a chilled shot, or as a long drink with cola, ice and lime; or cranberry, ice and a squeeze of lemon; or as a Gypsy’s Kiss – Irish Mist, orange juice and lemon (or sour mix).” 
How’s the new bottle working out in the real world?  “I know they’re hoping [the re-styled bottle] will lead to it being displayed with cordials and Irish whiskey,” says Gary Park, at Gary’s Liquors in Chestnut Hill.  “It’s just started, but I have seen people picking it up in the Irish whiskey section.  I’d like to think it’s new business; but right now it’s too soon to tell.  The old bottle was distinctive, but . . . “distinctive” can also be a problem, with fit and topple.  The new bottle’s solid and fits better.”
Caffrey promised a continuation of the sampling program – on- and off-premise – in March and October, and promotional materials featuring the tag line “Ridiculously Sociable.”  Me?  I think I’m going to go get a cup of snow and renew a tradition.

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