It’s not every day that the Alcohol Tobacco Tax & Trade Bureau designates a new official whiskey category. It’s not even every year. In fact, for the first time in 50 years, the commission recognized American single malt whiskey as a new category, elevating the libation to the level of bourbon and other American spirits.
The official designation is a special moment for Stranahan’s, which has been making a single-malt whiskey for more than 20 years. Of course, now comes the hard work: educating consumers about what it means to be a single-malt whiskey and why that is important.
“There’s not only a huge opportunity from a storytelling standpoint but also from a consumer standpoint to enter into a new phase of whiskey,” said Lander Otegui, senior vice president of marketing at Stranahan parent Proximo Spirits.
For the brand, that will begin with educating on-premise partners, such as restaurants and retailers, about the category and encouraging them to highlight the category within their menus and aisles.
It will also extend to consumers through tasting events and other programs throughout the year to literally help them understand what makes the whiskey special. Brand Innovators caught up with Otegui to discuss the new designation, how it came about and the brand’s future plans. This interview has been edited for length and clarity.
What does single-malt being “officially designated” as a category mean for your brand?
For us as a company and as a brand, it’s a major, major accomplishment. We’ve always been a single malt whiskey, but it wasn’t really something that initially we talked about because it wasn’t a thing until we started understanding that our brand was more special than any other American whiskies or bourbons that were out there.
So a few years ago, we started really elevating the brand into what we thought was going to be the next generation of whiskies for the U.S. So we started evolving the brand from what it was initially to something that can compete with the best whiskies in the world. And we started really building up a range and building up a brand to prepare for this moment. So we’ve been ready for the last three years with a really incredible range of whiskies, with a really incredible and compelling story of being one of the original American single malt whiskies.
What has your preparation for this time looked like?
We were confident that this change was coming, and we wanted to have a brand that was ready for when the announcement came. It was prepared with the right assortment of ingredients and someone to say, ‘I’m choosing American single malt because it competes against the best whiskeys of the world.’
What is the next step? I’m assuming the first parts will involve a significant amount of consumer education.
Yeah, this has been a huge project for us, I would say, over the last three years, and it comes with education from the ground up. We’re trying to educate first through our on-premise accounts, for example, because American single-malt never had a section on the menu. They would put Stranahand’s in the bourbon section or in the ‘American Whiskey’ section, and they would very rarely put it within the single-malt whiskey section in a restaurant. So there’s a lot of education to be had with on-premise accounts, for example.
At some point, we believe that the American single-malt category deserves to have its own section within the menu in a restaurant, for example, the same way you see Scotch single malt, Japanese single malt, in some places you see Irish single malt, then I think American single malt deserves its own space.
The second thing is we’ve been talking to a lot of retailers and distributors to make sure that this category deserves its own space on the shelf, similar to how we see in some stores, you see Rye has a section, you see Canadian Whiskey has a section. You see other types of whiskey have their own sections, and American Single Malt is a little bit all over the place depending on the state and the store you go to.
And we’ve proven with data that if American Single Malt has its own section, not only does every single brand that is part of that shelf sell more, but the store, in general, sells more whiskey. So it’s a case study that if we continue pushing it, it’s going to be a benefit to the overall category. We’re pushing this narrative both in the on-premise and the off-premise, plus everything that we’re doing from a consumer standpoint, like talking to media, talking to the different types of, let’s say, key opinion leaders in the whiskey space, so they become a voice for the category going forward.
So, what’s your timeline for that?
It takes time and it takes convincing and it takes a lot of different approaches through different sectors, but I think as we continue to prove that there’s value for them, they will be more motivated to do it. The first thing we try to convince them to do is let’s put a section or a display outside of the shelf that features American single malt and see how it does. If it does well, then we can transition into a specific shelf space. So it takes time. Some accounts are more difficult than others, especially when you talk about national accounts that have very strict guidelines on how their shelves should look. But the independent channel, for example, with independent liquor as with the liquor chains.
I think there’s a future here as long as we can continue to prove that there’s value for them. What I do believe is that this category has to be built by the key opinion leaders within the whiskey and the spirit space. So I think the on-premise is a key channel for this.
Obviously, you have a lead right now, but how do you anticipate other brands entering the category?
We’ve seen a lot of line extensions coming out from major whiskey brands. We’ve also seen acquisitions happening or other smaller brands that participated in this space. I think in general, awareness of the category helps everyone.
The only challenge that I’m seeing is, do consumers see this as a line extension from a brand or as a category on its own? And I think that’s where we differentiate and where we have a much stronger and much more compelling story. Because we are the market leader, we have over 30% of the American single malt category, there’s gonna be brands and it already happened, large brands that have launched their line extensions.
But I think the authenticity of being the origin of the distillery that’s only making 100 % American single malt the same way and line extending and doing it in a premium way really differentiates us from the large-scale brands that are just a short-term grab because, you know, they’re seeing this, this is having some conversations and then the category is legitimized. Let’s just try to do it.
I think the difference here is that this is the only thing that we do. This is who we are, and this is what we’ve always done. So, for us, it’s not an opportunistic approach like other brands are seeing this.
So, then, what does all of this – the acknowledgment, the new category, the anticipation of more competition, the consumer education – do to your marketing budget?
We’ve increased our budget for sure. We’re trying to get much more awareness on the category and really be prepared for when people want to have a conversation about American single malt. We are investing heavily in the on-premise as well to make sure that this category gets more legitimized within menus, that bartenders know how to use it, where to pour it, and then how to leverage the equity of the American single-malt to have a new conversation with consumers.
We invest in events, in sampling, in media, in sponsorships, like all the gamut. We have a really full plan to leverage the announcement. We also made a big investment last year and opened up a tasting room in Aspen, our second physical location besides the distillery, and those two things are a major and critical area for brand building for us.
