3 Spirits to Watch Out for Next Year
September 27, 2019
Around the XenoPsi offices, we’ve been watching some emerging spirits that have all the markings to see serious growth in US markets, both on and off-premise. Here are the categories the beverage industry should be taking seriously.
AMERICAN SINGLE MALT WHISKEY
In some ways, single malt whiskey is one of America’s oldest spirits traditions. There are records of malt distilleries dating back to the 1780s in Kentucky. As Irish and Scottish immigrants made their way to the new world, they brought their preference and knowhow of cooking and fermenting malted barley. But, as they found corn and rye to be more abundant in their new home, they quickly translated their techniques into Maryland and Pennsylvania-style rye whiskey and, eventually, the corn whiskey known as bourbon.
These days, for perhaps the first time in centuries, the United States is finally producing aged whiskeys, made from single malted grains, that are able to compete with the Scotch and Irish whiskeys that define the style. The reason is evident: as the whiskey boom in the United States took hold over the last decade, a whole host of new craft distillers began to look for a way to stand out from their larger bourbon and Tennessee whiskey competitors. They dialed in the recipes for original and inventive single malts (like sending straight award-winning craft beers through their stills), and placed the results in barrels to age. In the last few years, the spirits are now reaching their peak maturity.
What’s exciting about the category is that it represents some of the biggest strides in innovation in the market, enticing both consumers in the U.S. and global audiences. Small batch by nature, these whiskeys must compete with other single malts from established producers, so the bottles are comparatively affordable. As a hyper local twist on American whiskey, these distilleries capitalize on regional ingredients, and can age their products under different climate conditions than the standard regions, offering a serious sense of terroir. (Think: coastal whiskeys that taste of the sea.)
Many American Single Malts are also experimenting with smoke, echoing the use of smoldering peat in Scotch and Irish whiskey. But U.S. distillers are turning to different sources to create that signature aroma and flavor: local hard woods like oak, cherry, and mesquite, echoing the great American barbecue traditions.
It’s these differences that distinguish these whiskeys from their counterparts in the British Isles and Canada, and from American bourbons and ryes. On the shelf, they are less expensive that most single malt Scotches, but more expensive than bourbons of a similar age and proof. (This is a business reality of being a small, independent distiller competing with larger producers.) The business questions that loom are: do they meet the needs of their target audience? Are bartenders and retailers able to use the hyperlocality as a selling point? And is it worth the effort for, say, a consumer in New England to seek out a west coast Single Malt?
For collectors and enthusiasts, the innovation factor seems to indicate a resounding yes. As whiskey clubs, local societies, and on-premise programs continue to push the new and the novel rather than just the hard-to-find, the growth opportunities are evident.
RUM…WELL, PREMIUM RUM
In the past few decades, rum has continued to struggle to earn reputation as a high-quality, refined spirit with U.S. consumers. On the whole, it has been one of the slowest-growing over the past twenty years.
While rum is still the second largest category in the United States (following vodka) it has failed to grow in number or price of case sales nearly every year in the last decade. As base spirits like gin or whiskey have repositioned themselves with distinguished status, many major rum producers have struggled to progress. According to Pernod-Ricard, a “mere 3% of rum is defined as ‘super-premium’, or more than US $25 retail.”
It is specifically because rum is selling, but lacks premiumization, that there is big opportunity for growth. Bartenders are leading the way, prioritizing the category as a new go-to in the ever-evolving cocktail culture. Rum is versatile, very mixable, and complements a wide variety of flavors. Toning down the sweetness and playing up the vegetal, herbal, and charred-barrel complexity of aged rums has opened up the spirit to a whole new audience who crave more flavor.
Plus, the big players are getting more involved. This month, Campari bought two major Caribbean rum brands, as well one packaged for the local market in Martinique, where they’re produced. The acquisition includes not just the brands and their distilleries, but all land holdings, visitors centers, and a large inventory of high-quality aging rum.
Established producers are also wagering on premium. In 2018, Bacardi debuted two new upscale brands —Añejo Cuatro and Gran Reserva Diez — and reintroducing a third, Reserva Ocho, in response to consumer research. The distillery had found that while some 25-35% of premium spirits consumers do purchase rum, they typically trade down to medium-grade bottles in the $18-22 range. By offering an extra-aged rum to those who don’t hesitate to spend more than $25 in other categories, Barcardi hopes to capitalize on both its name recognition and higher retail prices to grow sales.
The business challenge centers on convincing consumers that there are sophisticated rums on par with whiskey, wine, and brandy that are worth sipping… and worth the extra price.
This comes from storytelling, Particularly, XenoPsi sees big opportunity in educating U.S. consumers about rhum agricole, a which is produced by distilling freshly squeezed sugar cane juice rather than processed molasses. The narrative for this product should be: molasses is often a byproduct of industrial sugar refining. But the flavor of rhum agricole varies from everything from the variety of the sugar cane used to soil type, climate, and farming techniques used to grow it. Additionally, spirits enthusiasts will be interested to know that rums of all types age much faster due to their tropical climate. The hotter temperatures can see as much as 10% loss to the angel’s share each year, whereas aged spirits from France, Scotland, or United States typically evaporate at a rate of 2-3% per year.
Consumers are excited to learn about the provenance of what they’re sipping, and bartenders have been are happy to share their knowledge and growing interest in rum over the last few years.
The next step is bringing that passion to the retail shelf.
In the early-to-mid 2010s, the Dutch spirit genever (pronounced yuh-NAY-ver), received a slight push among the armband-wearing, tincture-dropper bartending crowd, who were looking for ways to make their cocktail menus stand out. In response, more producers and importers are bringing the spirit to North America and the gin-loving UK.
Genever is a botantical-infused malt spirit associated with The Netherlands and Belgium. It’s often defined as the Dutch predecessor to gin. Flavored with angelica, orris root, coriander, orange, and juniper, Brits discovered the spirit during the Thirty Years’ War in the 1600s. They took their love of the bold botanicals back home, and the Britain’s beloved and historic relationship with gin was established.
But to describe genever merely as an antecedent to London dry limits its potential to connect with new audiences. In reality, these spirits share just as many characteristics with Scotch and bourbon. Unlike gin, its base is not a neutral distillate, but a grain-forward spirit that tastes of its cereal origins —usually barley, rye, and wheat. This makes it more akin to a young whiskey.
Herein lies the opportunity for growth. Bartenders, cocktail bars, and retail shelves should be positioning the spirit not just as a historical spin on gin, but also relate it to a botanical-infused whiskey.
Many styles of genver are even aged in charred oak barrels to impart vanilla, caramel, and toffee flavors that match its botanical profile. Increased sales will center around positioning genever as a cool, crisp spirit for people who “don’t like gin” and as an “up” cocktail base for whiskey drinkers. As gin-fatigue continues to settle in for audiences in the UK and continental Europe, genever is a new/old take that connects with those who enjoy the malted barley taste of beer and whiskey.
What this means, on and off-premise, is that genever has a place in clear, cold cocktails typically associated with gin and vodka. With some excellent examples at the $25-30 price point, this is an exciting time for the spirit. The key to growth here is simple: consumer education.
Recipes from the XenoPsi Bar
A few of our team members share their favorite ways to enjoy these emerging categories:
Premium Rum: El Chamo
Junior Designer Ana Greik says “I learned to love rum in my dad’s ‘famous’ rum punch, complete with passion fruit, lime, mango juice, grenadine, and two kinds of rum. But I enjoy my finely-aged rum in a much simpler twist that’s easy to make at home.”
- 2 oz aged rhum agricole
- 1/4 oz. maraschino liquor
- 2 dashes orange bitters
- Garnish: lime twist
Add the liquids to a mixing glass, and still with ice. Strain into a rocks glass with a single large cube or ice ball. Peel the lime over the glass, rub the zest around the rim, and garnish.
Genever: Breakfast in Rotterdam
Account supervisor Brock Whitfield likes his genever oude-style, which are produced via traditional techniques and are often barrel-aged.
- 1 oz oude genever
- 1 oz cold black tea (such as Stash English Breakfast)
- 3/4 oz orange liqueur
- Garnish: grapefruit peel
Shake the first three ingredients with ice. Strain into a chilled coupe or Nick and Nora glass, and garnish.
American Single Malt
Senior Content Writer Chris Gardner says “It’s single malt whiskey… perfect exactly as it is. Just pour 1.5 oz in a heavy, wide glass, and enjoy. I’ll take mine outside on the front porch during the fall months.”