Dive Brief:
- Rye whiskey has seen 536% volume growth since 2009, totaling over half a million cases in 2014 with annual retail sales of about $300 million, according to new data from the Distilled Spirits Council of the United States (DISCUS).
- This growth is in line with the growth of the U.S. whiskey market overall, which currently leads the spirit industry and had overall category volume growth of 7.3% last year. But the rye category is far outpacing even this measure of growth.
- Some credit rye whiskey's bolder taste as why the spirit is surging, particularly as bartenders at cocktail bars experiment with more flavorful drinks. A whiskey has to 51% rye to be included in the rye whiskey category.
Dive Insight:
"The growth of rye whiskey has been phenomenal, given that as late as 2000, rye volumes were virtually nonexistent with only a handful of brands in the U.S. market," David Ozgo, chief economist at DISCUS, told Fortune. While the bolder taste of rye whiskey may be helping the spirit today, that wasn't always the case.
"There are a lot of theories as to why rye fell out of favor, though ultimately it is linked to the end of Prohibition, when whiskeys from Ireland, Canada and Scotland came into the U.S. market. Those beverages are generally milder and softer than rye, so American palettes began to shift, says Chuck Cowdery, author of Bourbon, Strange: Surprising Stories of American Whiskey. Bourbon producers caught on and toned down their recipes to match the trend at the time, but rye – with its stronger bite and spice flavors – failed to respond as quickly and fell out of favor," Fortune reported.
Today, however, rye whiskey is in full flavor and full favor of many consumers, which has caused several major alcohol brands to take notice, such as Jack Daniel’s, Jim Beam, Diageo’s Bulleit, and Campari’s Wild Turkey. Wild Turkey actually ran out of stock of its rye whiskey at one point because strong demand caught the brand by surprise.
"Because whiskey takes time to age, it isn’t always easy for producers to meet rising demand for a subcategory that wasn’t popular until just a few years ago," according to Fortune.