Welcome to Flavor Country - The Flavored Whiskey Boom

When whiskey geeks talk about new trends in whiskey, we talk about things like finishing, age statements, reductions in proof and craft whiskey.  Living in the whiskey geek bubble, though, it's easy to forget that probably the biggest and most important trend in whiskey in the last ten years, at least from a sales perspective, has been flavored whiskey.  Hardly a day goes by when I don't see a report of startling new whiskey growth figures inevitably led by flavored whiskey sales. Yes, whiskey of all types is booming, but flavored whiskey is on fire. According to the Distilled Spirits Council, in 2013, 45% of growth in the whiskey category came from flavored whiskey sales. 

Jack Daniel's is undertaking a major distillery expansion, largely to satisfy demand for its Tennessee Honey. Nearly every major American brand has a flavored category and Canada, Scotland and Ireland are starting to catch on to the flavored whiskey trend as well.

Of course, flavored whiskeys and whiskey liqueurs are nothing new.  Brands like Drambuie, Bailey's and Southern Comfort have been around for decades (though Southern Comfort no longer uses a whiskey base) and Wild Turkey introduced its American Honey back in 1976.  But the new wave of flavored whiskey took off with Red Stag.  Jim Beam introduced Red Stag, a cherry flavored bourbon, in 2009, and it's been an enormous success.  It was followed by other big brand flavor extensions, including more Red Stag flavors, numerous flavored whiskeys under the Evan Williams label, flavored Seagram's 7 from Diageo and the aforementioned Jack Daniel's Tennessee Honey.  Even premium brands have gotten into the act with Beam releasing a smoked maple version of Knob Creek.

The biggest success in flavored whiskey has been Sazerac's Fireball Cinnamon Whiskey which has been around for years but didn't take off until after Red Stag's introduction.  Fireball sold nearly 2 million cases globally in 2013, and earlier this month, Brown Forman announced it would introduce a new cinnamon flavored whiskey in the Jack Daniel's line which was largely seen as an attempt to compete with Fireball. 

How much has the category taken off since Red Stag came out?  Looking at TTB label approvals, for the entire year of 2008, the year before Beam introduced Red Stag, I found only one label approval for a flavored whiskey.  In contrast, in 2013 there were close to 100 unique label approvals for flavored whiskey of various types.  Cinnamon, honey and fruit flavors are the most popular, but I've seen labels for coffee, ginger, coconut, chocolate and even green chile flavored whiskeys, among others.

Whiskey geeks turn their noses up at flavored whiskey, and while I don't drink it, I've always defended it. It's no skin off my back if someone likes flavored whiskey, and good for the companies for finding a cash cow that can hopefully subsidize more premium products.  At this point, though, it's become so popular that you have to wonder whether the lure of easy profits is contributing to the general shortage of quality whiskey stocks.  At some point, when companies face limited stocks and the choice of releasing premium, high proof brands or stretching their stock with flavored whiskey (with its 60 proof minimum), the temptation to use those stocks for flavored whiskey might be irresistible.

Who's not making flavored whiskey?  Among the major American companies, only Four Roses doesn't have a flavored whiskey.  How long will they be able to stand up against the pressure of easy profits and enviable growth figures?

So should we be worried about the growth in flavored whiskey or will this rising tide lift all the whiskey boats?