The U.S. spirits category has been the standout performer among the major alcohols, growing at a rate of around 3 percent, according to figures presented by the Distilled Spirits Council of the United States (DISCUS). There are a number of factors at work pulling that number up: premiumization, as consumers have returned to their pre-recession trading-up habits, the rapid growth of the craft distilling segment (though its impact is minimal given that it’s less than 1 percent of the category) and the respective renaissances of brown spirits like bourbon and Irish whisky. But the one factor that seems to be exerting the strongest influence on volume is the rise of flavored spirits.
In 2012, DISCUS reports, 27 percent of overall spirits volume came from flavored products. However, the more telling figure is the fact that flavors accounted for about 46 percent of the category’s actual growth. Of the 739 products that entered the market last year, 353 of those were flavored, versus 386 considered “traditional.”
“When you look at the cocktail and culinary culture, it’s all about experimentation and innovation and flavors dive right into that,” observes David Ozgo, chief economist at DISCUS. “The consumer likes variety and by offering a wide variety of flavor you can satisfy that consumer demand.”
Breakfast seems to be finding its way to happy hour and cocktail parties, as some brands have been playing with sweet and somewhat savory flavors inspired by the most important meal of the day. Pernod Ricard USA recently launched Mama Walker’s, a line of liqueurs available in Blueberry Pancake, Maple Bacon and Glazed Donut flavors.
Mama Walker’s wasn’t the first to go the doughnut route. Glazed Donut is among the flavor extensions launched by eco-centric brand 360 Vodka. Others include Buttered Popcorn, Double Chocolate and Cola flavors.
Beam Inc.’s Pinnacle Vodka brand has been pretty active in this space, with a portfolio that includes more than 30 flavors. Last month it announced the launch of its five latest varieties: Caramel Apple, Peachberry Cobbler, Pecan Pie and Salted Caramel, along with its limited edition holiday offering, Peppermint Bark.
“One out of every three cocktails in the U.S. is made with vodka, and the proliferation of flavor has certainly helped to lead that trend,” says Beam general manager Deb Boyda.
The key demographic, Boyda notes, consists of millennials of legal drinking age and up. “Pinnacle’s playful personality and innovative spirit speak to consumers who love to have fun and explore the world around them while creating their own individual identity,” Boyda says.
Flavor experimentation extends beyond white spirits, as iconic brands like Jim Beam, Jack Daniel’s and Crown Royal have had fairly successful flavor extension launches over the past several years. Beam’s Red Stag line launched in 2009 with its black cherry flavor and has since expanded to include Hardcore Cider, Honey Tea and Spiced infusions. Brown-Forman’s Jack Daniel’s brand launched Tennessee Honey and Diageo’s Crown Royal launched a maple flavor.
“With those initial takes,” Ozgo says, “consumers reacted and they enjoyed the products…and one successful experiment begets another.’
Though many in the craft distilling segment tend to draw their influence from the traditional end of the spectrum, there are a good number who are finding considerable success with flavors—many of which are the furthest thing from traditional, even in flavored spirits circles.
Nashville, Tenn.-based Corsair Artisan Distillery, for instance, has drawn upon owner and distiller Darek Bell’s prior foray into brewing with a range of whiskeys distilled with different hop varietals.
“We’re thinking more like a brewer,” Bell says. “That’s how we really came to the table. A lot of time [consumers] aren’t really whiskey people, but they want to try our stuff. If we can seduce a few beer lovers over to spirits, great because that’s a much bigger market than the world of whiskey.”
It took a fair amount of trial and error before Corsair got the flavor profile right. “We started distilling hoppy beers and making hoppy whiskeys, but we were disappointed,” Bell recalls. “Then we started doing it more like a gin, put hops in during second distillation—that gives us more of a flavor we wanted.”
Corsair also offers a distilled oatmeal stout.
When Philadelphia Distilling, best known for its Bluecoat American Dry Gin, started branching out into flavors, it tied its experimentation in with a growing sub-segment within craft distilling: moonshine. The company offers its XXX Shine line of corn whiskey in Salted Caramel and the tea-infused LiberTea. “It works well in the corn whiskey space because we can have a brown spirit without aging it,” explains Philadelphia Distilling president and co-founder Andrew Auwerda. “There are always so many questions with white whiskey. There’s not as many questions because the coloring goes with the flavor.”
Corsair, like Philadelphia, has been known to dabble in the flavored moonshine space with its Pumpkin Spice Moonshine. Its pumpkin experimentation is not limited to moonshine, though. Corsair also offers Old Punk, a pumpkin and spice flavored whiskey aged in American oak.
In all, DISCUS’ Ozgo says, there were 220 different flavors on the market in 2012. “It was everything from the basic orange,” he notes, “to things as exotic as wasabi and fresh-cut grass.”