Whiskey Flavors Spice up the Traditional Market

May 28, 2016 in Alcohol Beverage, Startups

Popular spirits come and go in the U.S. market, with some new brands making a big impact on long-established trends. For instance, flavored whiskey recently drew significant attention when its growth rate outpaced flavored vodka. The Spirits Business reported that flavored whiskey accounted for over half of the growth seen in the spirits market in 2014. During the same time period, flavored vodka’s growth dropped by 5 percent. However, this data may not be indicative of the entire flavored whiskey market: much of the exceptional growth rate is tied to a single product: Sazerac’s Fireball Whiskey. The company’s Fireball revenue went from $1.9 million in 2011 to $61 million by 2013, according to the Daily Beast.

Is Flavored Whiskey a Trend or a Fad?

Sazerac sees a continued increase in Fireball sales, but gauging the overall flavored whiskey market proves difficult when a single product completely dominates. Flavored whiskey had a limited presence in 2008, with only 0.2 percent of total whiskey sales. By 2014, it grew to 11 percent, according to the Daily Beast. What’s more, flavored vodkas take up significant shelf space which limits the flavored whiskey trend to the most popular products.

Sazerac took to social media and bar scenes to spur demand for its product. Fireball’s first brand ambassador spent a significant amount of time going from bar to bar and buying shots to build familiarity. The college-age demographic proved particularly responsive to the cinnamon-flavored whiskey, which started to edge out the long popular Jagermeister and other favorites.

Flavored whiskey may have started off as a fad, but consistently strong growth rates and an expanding market segment positions it clearly in the trend category. This spirit encourages a broad demographic to try out whiskey by making it more approachable than traditional products.

Major Products in the Flavored Whiskey Segment

Fireball leads this market segment, but its success has spurred other brands to create flavored whiskeys. Jim Beam Kentucky Fire and Jack Daniels Tennessee Fire followed in Sazerac’s cinnamon footsteps. Other popular flavors include cherry, featured in Jim Beam Red Stag, and honey, prominently displayed in American Honey.

Flavored whiskeys haven’t reached the same saturation point as flavored vodkas, which feature every imaginable flavor combination. Whiskey and bourbon producers have made some moves into more specialized tastes, such as root beer and maple flavors.

Flavored Whiskey Spin-offs

This flavored trend spills over into the tequila market as well. Serrano peppers and Mexican cinnamon form the flavor base in Soltado aged tequila. Tequila drinkers have limited product options, so expanding into infused liquor helps to drive new interest. Soltado is stronger than Fireball and other whiskeys, which makes it appropriate for mixed drinks. Flavored tequila is an experimental part of the market, so it remains to be seen whether this segment spurs strong growth.

Fireball sits firmly at the top of the flavored whiskey mountain, but continued growth provides enough room for other competitors to make a strong showing. With five years of strong sales, this whiskey category is making fans out of all-aged drinkers, women, and the college-aged demographic.