American whiskey has long faced intense competition from many markets including both older compatriots such as Ireland and Scotland, as well as newer distilling markets like Japan and India.
If that hasn’t been enough of a challenge, the United States’ political stance over the past few years of President Donald Trump’s leadership has led to American products becoming subject to additional tariff and trade barriers compared to previous decades, posing additional hurdles for newly-minted CEO of the American Whiskey Association Michael Bilello to overcome.
Billelo became the first CEO of the association in September last year, shortly after it was founded by several of the world’s largest alcohol firms, including Brown-Forman, Campari Group, Diageo, Pernod Ricard, Sazerac and Suntory Global Spirits.
“There are many markets throughout the world that have a lot of growth potential and big consumer demand for US whiskey, but we are subject to far higher taxation compared to whiskeys from other markets, making us less competitive, and that is an issue,” he said during a recent trade trip to Singapore.
“Let me use India as an example: Here, American whiskey faces tariffs of 150% and bourbon faces 100%, which means we cannot compete with Scotch or Irish whiskey which have better deals and trade arrangements. It’s even worse in Canada where US whiskey is being boycotted from shelves, which is absolutely having a negative impact.”
The boycott in Canada refers to an ongoing ban on American whiskey and other U.S. alcoholic beverages as part of trade and tariff dispute, where these items are not allowed on government-run store shelves across most provinces.
“The mission of the American Whiskey Association is to make American whiskey the world’s whiskey, and step one for us right now in this quest is to obtain fair market access and level the playing field, which is of course a big undertaking sue to the trade tensions and political volatility,” he said.
“Step two is that we need to get more US whiskey into more markets outside of the US itself, meaning we need to increase exports. For too many years now, we have as an industry relied too heavily on the local market for our growth, and we not need to look at export markets and engage with important markets like India and Singapore, Thailand, Vietnam, the Philippines, Oceania if we want to achieve our goals.”
Mixology more important than ever before
To do this, Billelo is emphatic that mixology and innovation are more important than ever before in the whiskey category, highlighting Asia as a leading market in this space.
“In the US, many people drink whiskey neat or on the rocks, but in Asia and especially Singapore, this is not as common — instead, creations such as highballs and other cocktails are exceedingly popular, and this is absolutely a trend that US whiskey can benefit from as its is very versatile and can be paired well with many bespoke or customised local ingredients,” he said.
“So we need to work closely with mixologists in order to ensure we can keep innovation and creation flowing, to keep on appealing to diverse palates everywhere as well as to younger demographics which are particularly fond of custom cocktails.”
Beyond this, Billelo also emphasised the need to look beyond traditional on-trade and off-trade opportunities but also emerging ones such as ready-to-drink (RTD) cocktails.
“Cocktails are growing fast, but the innovation we are seeing is not just on-trade but also off-trade in RTD cocktails,” he said.
“Proper bar-made cocktails are always going to be popular at events like sports or concerts or parties where a bar is likely to be available, but there are many occasions when consumers might want a more convenient option they can grab off shelves, which are RTDs, and American whiskey is also versatile enough that it can easily be the base spirit for many of these.”
Future outlook
Despite the obvious challenges, Billelo remains extremely optimistic for the future American whiskey.
“In order to make American whiskey the world’s whiskey, we need to engage in a very organic and non-political way with consumers – It can be done, and it will be done,” he emphasised.
“I remain very bullish and optimistic about the next few decades for American whiskey because I truly think it’s going to be a historic few decades in terms of innovation, and going to be very wonderful and exciting for consumers everywhere.”
