Building a ‘new-fashioned’ portfolio: Pernod Ricard’s ambitions in the American whiskey category

By Rachel Arthur

- Last updated on GMT


Related tags Pernod ricard American whiskey

With acquisitions such as Rabbit Hole and TX, Pernod Ricard USA is building a ‘new-fashioned’ whiskey portfolio: with the focus on pushing boundaries rather than adhering strictly to tradition.

The American whiskey category is undergoing a renaissance: drawing in new consumers as they discover the role of the drink either neat or in modern mixology, according to Craig Johnson, VP of Marketing at Pernod Ricard.

The wine and spirits giant has turned its attention to identifying, nurturing and scaling American whiskies that are breaking tradition and redefining the category.

‘We don’t expect growth to slow down anytime soon’

American Whiskey volume growth in the US has been accelerating over the last 10 years: shooting up from 15 million 9-liter cases in 2010 to more than 28 million in 2020, according to figures from the Distilled Spirits Council’s Economic and Strategic Analysis Department.

It now generates more than $4.3bn in revenue for distillers a year.

American Whiskeys are legally defined and regulated by the Alcohol and Tobacco Tax and Trade Bureau (TTB): made in any US state and encompassing varieties such as bourbon whiskey, Kentucky bourbon and rye whiskey.

So what’s exciting about the category?

“American whiskey continues to grow at 1.15x the market, accounting for 21% of spirits in the US, with the premium end of the category accounting for 42% of the growth (Nielsen 2021) - guiding Pernod Ricard towards its portfolio of super and ultra-premium brands to attract a wide variety of consumers,” ​Johnson told us.

“The category has also been undergoing a renaissance; new consumers are discovering its quality and versatility. It has recently earned its rightful place in modern mixology, and of course can also be appreciated neat.”

As with other drinks categories, today’s focus is on premium or ultra-premium products.  

“Pernod Ricard does not expect the growth and premiumization of American whiskey to slow anytime soon,” ​said Johnson. “People are enjoying whiskey in a variety of contexts due to its versatility, from at-home occasions to high-end mixology settings.”

Building out from Irish whiskeys and Scotch

Pernod Ricard’s spirits portfolio includes classics such as Jameson Irish Whiskey and Scotch whiskies Ballantine’s and The Glenlivet. But as a relatively new entrant in American Whiskey, it is building up a portfolio with newer brands often still focused on key states.

In 2017 it acquired West Virginia’s Smooth Ambler; followed by Jefferson’s bourbon via its Castle Brands acquisition in 2019; alongside Texas’ TX and Kentucky’s Rabbit Hole in 2019. Each brand has a distinct local heritage and community story.

“Pernod Ricard saw an opportunity to build a “new-fashioned” portfolio, investing in brands that are pushing the boundaries of American whiskey tradition. Our focus has been on providing a strong route to market to secure long-term development, while allowing each brand to remain true to its authentic and innovative character.

“With original brands from Kentucky, Texas and West Virginia, each brand has a distinct lineup of whiskies, with a range of heritage stories, mash bills and flavor profiles that differentiate from competitors.

“While younger than the likes of well-known powerhouse brands like Jameson, The Glenlivet, and others in the Pernod Ricard portfolio, these young brands appeal to a wide spectrum of consumers and further elevate our established portfolio of scotch and whiskey offerings.

“Our aim is to ensure that as a portfolio, American Whiskeys are a growth driver for Pernod Ricard USA. We aim to establish a firm footprint in key states and build from there.”

Founded in 1997 by Trey Zoeller, Jefferson’s embodies innovation through a unique process that harnesses the power of the ocean and ages its whiskey through a two-year, at-sea voyage (Jefferson’s Ocean). 'The constant movement of the ocean and extreme temperature fluctuations completely transform the whiskey, resulting in hyper-aged, darker, richer, and caramelized bourbons with incredible depth and complexity. This process rounds out the bourbon’s profile to create an American treasure that has been cultured as it traveled the globe.'

In 2017, Pernod Ricard USA acquired Smooth Ambler (founded in 2009) which remains focused on the local scale and is committed to positively impacting the West Virginia community that it sources its whiskey from. It prides itself on the hard work that goes into making a high-quality whiskey, and the transparency the brand provides whiskey experts and novices alike in regard to making a homemade whiskey.

Since starting Rabbit Hole in 2012 – and joining the Pernod Ricard portfolio in 2019 – Rabbit Hole Founder, Kaveh Zamanian, set out to find a balance between the traditional heritage of Kentucky and a “one of a kind” recipe. Kaveh, a native Iranian, had a vision not only to modernize bourbon, but also to make it a more inclusive industry as it has been traditionally viewed as ‘born and bred’ American, especially in Kentucky.

Also acquired in 2019, TX (founded in 2010) starts its distilling process using a cap made from recycled boots to give each bottle a unique piece of Texas – the brand quite literally bottles the spirit of Texan pride and modern-day cowboy culture. TX blended whiskey and TX straight bourbon are American crafted to showcase the rugged elegance of modern Texas, along with its culture and know-how.

Supporting growth

Building an American whiskey portfolio in this way has been done to complement the global whiskey portfolio, said Johnson, allowing the company to nurture and scale unique, American-made brands.

“Investments in this category align with Pernod Ricard’s consumer-centric strategy to offer our consumers the broadest lineup of high-quality premium brands, with a focus on building a “new-fashioned” portfolio, as each of our American brand are pushing boundaries, not adhering strictly to tradition.

“Our priority has been to grow our American Whiskey brands in the US market with pace, and win as a portfolio. We are making sure that the infrastructure and marketing investment levels for each brand support that ambition.”

"Innovation is a 'huge category driver', adds Johnson.

"Jefferson’s experimental approach to whiskey making is a great example. Jefferson’s is at the forefront when it comes to secondary maturation, recently introducing Jefferson’s Rye Cognac Cask Finish (47% ABV) – a double-barreled straight rye whiskey finished in hand-selected Cognac casks for at least nine months in Kentucky."

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