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US whiskey rides popularity wave.

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US whiskey is riding high these days, led by a revival at home and the popularity of Americana abroad. Total global US whiskey sales reached 34.4m cases in 2012, up 6.3% over 2011. This represents an acceleration of the five-year compound annual growth rate (CAGR) of 3.5%. Preliminary indications are that US whiskies continued to gain at a brisk pace in 2013 in both domestic and export markets. The lofty $16bn valuation that Japanese drinks group Suntory is prepared to pay to acquire Beam Inc. serves as testament to the bullish growth prospects for the category.

Much of the current success in the US is attributable to a sweeping generational change under way in the US. It is now easy to forget the category was facing a real crisis just a decade ago. Its consumer base was ageing and Baby Boomers had largely eschewed brown spirits, which they saw as their father’s drink, instead opting for vodka or beer. US whiskey shed almost 44% of its total domestic volume between 1985 and 2002. One or two generations on, and the Millennials and Generation X-ers are again looking to differentiate themselves from the previous generation – only this time by returning to whiskey.

Brown-Forman senior VP, managing director Jack Daniel’s, John Hayes says: “Back in the 1960s Bourbon was king in the US and then went on to lose well over half of its volume over time, whereas vodka and white rum were the drivers of total distilled spirits growth. Jack Daniel’s did hang on and grow during that time of significant decline, but it is certainly new for the category to be growing. The real positive is that the growth has been driven by younger men and we never really had them in the recent past. We call them the lost generation of US whiskey users. There is a rediscovery of US whiskey by this group, and even women are in on it. It is cool to be drinking Bourbon right now.”


April, 11th 2014

Read the full article in the April issue of the IWSR Magazine.

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