The US whiskey renaissance

The IWSR interviews Max Shapira, president of Heaven Hill

Heaven Hill, one of the largest independent family-owned spirits producers in the US, is enjoying a period of rapid expansion as its core Bourbon business is displaying explosive growth.

 

Heaven Hill, one of the largest independent family-owned spirits producers in the US, is enjoying a period of rapid expansion as its core Bourbon business is displaying explosive growth.

Heaven Hill president Max Shapira says: “We are in the midst of a whiskey renaissance in the US. For Heaven Hill that meant focusing on that American piece of the business with great intensity. It also included beginning to look at what were the great opportunities around the world. We are primarily at this point an American-focused company, but we certainly have realised that the alcohol beverage business is huge around the world, and the US whiskey opportunity within that is quite an extraordinary one.”

Commenting on the ongoing development of the whiskey category in the US, he adds: “There is also a growing consumer interest in brands that have a history and transparency. Whiskey has really become that iconic spirit in the US that has a history, a heritage and tradition almost like no other category in the industry. This interest has also been fuelled by the introduction of new and unique mash bills and formulas for US whiskey, outstanding packaging, different alcohol strengths, different age factors and all of those things are what the consumer today seems to be seeking.”

He explains that Heaven Hill would like to revive several its long-dormant brand trademarks but is held back by supply. “We think they would be great additions to what we already have with some different styles of whiskey and historical brands that have been around for a long time. The problem is that we still don’t have enough stock to be able to bring them out. There is a lot of potential in taking an old and dormant brand and making it new again. We are looking to do more of that as and when supply constraints lift.”

Fortunately, those brands in its current Bourbon portfolio, led by Evan Williams and Elijah Craig, are outperforming what is a very buoyant market overall. Evan Williams’ sales rose by around CAGR 10.4% between 2012 and 2017 and now stands at 2.7m cases. Looking to build on that momentum, in September the company launched a new Evan Williams marketing campaign titled ‘Bourbon Done Right’. The flagship Bourbon brand of Heaven Hill Distillery will utilise the new positioning to showcase real, everyday satisfaction from a real, everyday Bourbon.

Shapira believes that the current expansion still has some way to run. “As large as the US whiskey category is today, the growth that we have had over the last several years the volume that is being sold is not as large as the category was during the 1950s and early ‘60s. Then you factor in the worldwide opportunity. Typically, if a consumer outside the US asks for a whisky-based drink they are likely to be served Scotch probably 95 times out of 100. If we could even reduce that to 92, just a small increase in market share, it would bring a substantial amount of growth to the whole US whiskey category. The opportunities around the world are really quite outstanding in a variety of countries. All of that together indicates to us that there will be long, continued and consistent growth for this category for quite a number of years to come.”

The introduction of flavours has revolutionised the Bourbon market

The introduction of flavours has revolutionised the Bourbon market, opening it to new demographics and occasions. “This is a very old industry with a lot of history and a lot of heritage and sometimes it is a bit slow to change, but changed it has in a whole range of ways,” observes Shapira. “Consumers are undoubtedly more prepared to experiment with a whole range of different styles of whiskey. Part of that is what I call flavourising the industry in a controlled way that makes sense. There has been a very good and sound expansion of the way that Bourbon has presented to consumers. There is no question that these flavours appeal to a broad and different consumer including a lot of women, which we were lacking as consumers five and 10 years ago. This has been very helpful to the business.”

 

Find out more about US whiskey in our US Craft Spirits Report, other categories in the US in our US Beverage Alcohol Review and globally in the IWSR Global Database.

For enquiries, please email enquiries@theiwsr.com or call us on +44 (0)20 7689 6841.

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