July 19, 2016
Craft distillers are "in for a shock" when their brown spirits simultaneously come of age and hit the market "with the same USP", Waterford Distillery's CEO Mark Reynier has claimed.
Speaking to The Spirits Business last month, Reynier, who is also the former managing director of Bruichladdich Distillery, said the "scrabble" in the already competitive 'craft' spirits market is set to intensify. "Over the next few years, so-called craft distillers are going to be selling the same product, with the same USP, at the same price and they are going to be in for a jolly good shock," he claimed.
"There are 15 distilleries set to open in Scotland and even more in Ireland, that's an awful lot trying to muscle each other out and get oxygen for their brands. I think there will be a real issue when it comes to all these distilleries releasing their whiskies. When they all come to market at around the same time there will be a scrabble, especially because they are all positioned at the super-premium end of the spectrum."
Reynier added that small-scale producers often lack the financial know-how and distribution contracts to create a sustainable business - something which may lead to a number of empty distilleries in the coming years.
According to new research by Mintel, global launches of craft spirits brands grew 265% between 2011 and 2015. Such brands have also accounted for one in seven (15%) of new spirit launches to-date in 2016. In the US - leader in the world's craft distilling scene - the market share of brands that adhere to the American Craft Distilling Institute's definition of "craft" increased from 0.4% in 2012 to 1.3% in 2015. As such, Reynier stated that big spirits brands are starting to mirror the marketing messages of 'craft' labels as they see their market share erode.
"I think they (large distillers) are shit scared. They are introducing provenance and using this sort of rhetoric because they are scared. The craft producers are economically insignificant to the big guys, but they aren't going anywhere, and big brands look at their figures and see them decline as people turn away from these big messages."
Reynier's Waterford Distillery commenced production in December last year, with plans to produce the "most profound" Irish whiskey in the industry.
Source: The Spirits Business
Reported by Amy Hopkins (18th July, 2016)