The State Of The Whiskey Union
According to the recent DISCUS report, Bourbon is no longer the top dog in the American spirits market. It’s getting fully throttled by Tequila, which grew by $886 million in 2022, compared to American whiskey’s $483 million gain. To anyone paying attention, this shouldn’t be a surprise. Every day, more and more people are looking to enjoy alcohol in the evening, while maintaining a healthy routine in the morning. While it’s illegal to market a type of alcohol based on its perceived physical effects, agave spirits aficionados have long touted the “cleaner buzz” of both Tequila and mezcal, while the Bravo housewives appreciate its low caloric content when mixed with club soda and lime. Even Prince Harry writes at length about his positive experiences with high-quality Tequila in his new memoir Spare, referencing a trip to California where he drank “good” Tequila and woke up without a hangover in the morning.
Lifestyle and fitness aside, there’s another looming reason Bourbon is losing ground to Tequila, and it’s the same reason 80’s hair metal was eventually extinguished by Nirvana. All generational fads have an innate lifecycle and American whiskey is reaching the end of that pattern. Granted, those who have been initiated will likely keep fixed to their era’s preferences and remain staunch Bourbon drinkers (queue Billy Madison showing up for the first day of high school), but as that generation ages out of any volume consumption, the Bourbon industry is going to find itself in a pickle. The studles I read each week are documenting the same phenomenon: young adults would rather drink nothing than drink Bourbon. In fact, absolutely nothing about our current drinks industry is attracting their interest whatsoever.
When I broke into the industry back in 2007, it was a foregone conclusion that young people liked to drink; it was just a matter of what. We spent most of our time educating consumers about the merit of a well-balanced diet, rather than convincing them to drink in the first place. During that era, learning about alcohol was a way to enhance one’s appreciation of it. We were introducing blended Scotch drinkers to single malt whisky, while giving Bourbon drinkers a taste of higher-proof, single barrel expressions that offered far more concentration than their standard Jack Daniels. But like many social movements before it, the whiskey renaissance of the last decade was eventually co-opted by corporations, infiltrated by posers, and turned into a fashion contest on social media. Most of the excitement surrounding Bourbon today comes from procuring a rare whiskey rather than enjoying it.
Count me as part of the group that isn’t surprised young adults in their mid-twenties don’t want to associate with forty year old men who spend most of their time stalking their favorite liquor stores, taking the exact same trophy photos, and measuring their manhood on Instagram. I’m forty-three and I want nothing to do with it either. As a marketer working inside the modern whiskey bubble, it can be hard to deviate from the strategies we see happening around us—high ABVs, cask strength, single barrel, big bold flavors, etc. However, once you’re outside that bubble, engaging with everyday consumers, the landscape starts to look a lot like politics. The most vocal participants on social media give the impression of a polarized market, when in reality the overwhelming majority of consumers are quite moderate. Catering to those extremes further alienates the middle and—from where I’m sitting—the largest subset of would-be whiskey consumers falls into this category: those turned off by the evolution of the market, yet aren’t ready to switch to Tequila.
I’m not alone in this thinking, either. There are signs of a similar consciousness in the Scotch market right now, where blended whisky is starting to make a resurgence. Last week, I was given an advance sample of a new label from a major drinks company, and—boy oh boy—did it really scratch that nostalgic itch. Imagine a delicious and supple blended Scotch whisky with a high malt content, composed of whiskies up to 25 years of age, easily drinkable at 46% and for well under $100. For those polarized in the geekier fringes of whiskey’s recesses, a product like I’ve just described wouldn’t even raise an eyebrow. However, for those who pine for the days of no-frills, high-quality Scotch for a reasonable price, I have to think this brand will touch a nerve on its release. It’s a reminder of how fun whiskey used to be, back when you could discover a high-quality product for a reasonable price, share it with friends, and repeat.
Whiskey has lost its luster with an entire generation of would-be consumers because it’s completely lost touch with the basic needs of consumerism: make it fun and make it functional. Tequila, on the other hand, fits right in with today’s lifestyle trends and is thriving as a result. It reminds me of the president’s recent state of the union speech and the post-analysis from the pundits: when Biden talks about social security and Medicare, Democrats win. That’s because when politicians get consumed by culture wars on the fringes, everyday voters start to lose interest. Modern consumers are no different. Even in the premium sector, whiskey drinkers have basic needs that must be met and will quickly tire of bullshit. In order to make whiskey exciting again, drinks companies need to remember what made it exciting in the first place.
-David Driscoll