Ten years ago at a leading Boston bar, I ordered a specific whisky brand for my work colleagues. The bar manager announced they no longer served America’s most popular whisky. Why I asked. I never forgot the answer. They wanted to be different.
Wanting to be different was a mantra I would also hear repeated as craft distilleries grew from humble beginnings. Why not, everybody wants to be different. So it stands to reason, bars too. After all, in marketing jargon, aren’t they street hospitality brands seeking to attract and retain customers to their experiential destination.
The same principles apply to whisky brands. They also need to be recognised and want to be celebrated as different. If the differences make you famous, all the better. Finding those differences is one of the secrets to understanding what’s happening with craft whisky, especially the successful ones. Except at the bar we were at.
Every craft whisky brand seeks to promote something that tells their distinctive story, something that makes them sufficiently different to give their whisky a personality and buyer appeal. They pick from a bucket of marketing attributes such as place, people, process, price, past, packaging and product to help the brand stand for something.
Craft’s existential aura elicits perceptions of greater authenticity, in contrast to a mass-produced product or popular brands, adding to its artisanal allure.
Claims from innovative techniques to traditionally made, from growing heirloom varieties to estate-grown grain, made by a young ex-banker to a fourth-generation distiller, matured underwater or by heavy metal music, made to an ethical or environmental purpose. The permutations are endless. If you do not offer a meaningful and appealing difference, why do you matter?
Craft infers something handmade. For whisky, this could be where its made, how its made or a special ingredient to accentuate a flavour difference, even a different way it’s drunk. Craft’s existential aura elicits perceptions of greater authenticity, in contrast to a mass-produced product or popular brands, adding to its artisanal allure. Thanks to the pioneering efforts of craft brewers and boutique winemakers for paving whisky’s road to acceptance.
Let’s not forget most of the major distilleries started the same way as small craft-like businesses at some point over the past two hundred years. The Glenlivet, Glenmorangie to Johnnie Walker in malts and blended Scotch, to Buffalo Trace’s portfolio of outstanding Bourbons and ryes, Parker’s Heritage to Woodford Reserve’s Master’s Collection. All outstanding whiskies made to the highest standards and priced at a good value.
Evidence of major distilleries still applying their craft inventiveness and technical skills. Of course, they have one big advantage, a long head start. Interestingly, most of these whisky distilleries had their origins in legislative change, when regulations liberalised distillation and reformed taxation. Glenlivet was born out of the 1823 Excise Act; Johnnie Walker blended whisky from the 1860 Excise on Spirits Act, and the repeal of Prohibition in 1933 re-established a new breed of American distilleries. History has a way of repeating itself.
The groundswell that propelled craft distilling from a cottage industry into a movement involved a handful of collective and fortuitous influences. The main catalyst was the government. For more than 200 years English speaking governments legislated stringent regulations governing whisky distilleries, production and taxation, as whisky was a major source of national revenue.
By the 1990s, spirit excise was shrinking to around one per cent of national tax revenue throwing open the doors for more liberal attitudes to alcohol production, surveillance and consumption. Distillation licences and minimal volumes were relaxed, start-up roadblocks removed and approval barriers lowered as national, regional and local authorities were more amenable to small and even large distilleries generating new business opportunities. As more distilleries entered, demand grew for specialist industries and expert advisors to assist start-ups.
Whether you are a craft or major whisky brand, you still have to offer a quality product with good flavour at a competitive price.
Today, there are dozens of small engineering firms specialising in still and plant fabrication, boutique cooperages, industry consultants, artisanal maltsters, to distilling courses helping educate whisky dreamers with no experience. Softening liquor licence laws opened transaction channels for craft sales, from the distillery door, online sales platforms to companies like Amazon offering direct purchasing portals to consumers.
Anyone with sufficient funding and the desire can join the movement and become a craft distillery.
Whether you are a craft or major whisky brand, you still have to offer a quality product with good flavour at a competitive price. Ideally, superior flavour at good value will give your label a competitive advantage. In the spirits industry, there’s an old maxim: it takes a generation to establish a whisky brand. The craft sector has reached its quarter-century milestone in achieving critical mass by establishing commercial footholds in a few major marketplaces. Hundreds of brands have carved out a viable four percent of total spirit sales in first-mover countries like US and Australia.
Without consumer demand, there would be no craft sector seizing our attention and wallets. It was curious whisky drinkers and local liquor businesses supporting unknown brands the first to help and encourage these entrepreneurial risk-takers. Next, hipster bartenders, the ringmasters for the exploding cocktail phenomenon introduced younger drinkers to craft spirits. Especially Millennials who love the idea of discovering and supporting interesting craft labels. Craft labels are the corks seductively rising atop of the long trending premiumisation tide pushing the liquor sales to new financial heights. Higher spending drinkers are the lifeblood of craft whisky businesses where lack of efficiencies mean their pricing is at a significant premium and disadvantage to traditional brands.
As US liquor laws and distribution channels are becoming more accessible, it also means craft brands are no longer hostage to geography.
What’s the future for craft whisky in a word? Growth. Growth. Growth. In the US, the global bellwether for craft whisky, the headwinds are for continuing and substantial growth over the foreseeable future. Craft spirits are forecast to exceed 10 million cases in the next three years with whisky driving much of this volume. In this short period thousands more US craft distilleries are expected to join the 1,600 already active. Consumer research reports an overwhelming preference for craft spirits, albeit with small sales base.
Awareness and interest in the craft spirits are high, over-indexing for likeability attributes such as the importance of provenance, authenticity, farm-sourced and high-quality ingredients being reasons for considering craft. As US liquor laws and distribution channels are becoming more accessible, it also means craft brands are no longer hostage to geography. Similar developments are being repeated in other whisky-producing countries from England to New Zealand, ensuring a greater choice of craft whiskies available.
It seems the Boston bar manager was tapping into the zeitgeist. In denying us the whisky, we were forced to go to another bar. Viva la difference.
Craft Kentucky-style at Peerless Distillery
Scottish craft – Raasay Distillery