Noah Rothbaum is a New York-based journalist whose work has appeared in as diverse publications as O, The Oprah Magazine, Fortune Small Business and Food Arts. His latest book is “The Business of Spirits,” in which he explores at length the complex world of distilling and spirits sales and marketing. He spoke recently to NRN about the industry trends he covers at length in the book.
One continuing theme of your book is that consumers are trading up to premium and ultrapremium spirits. How important is that trend to the recent development of the market?
It’s been huge. There is an overall trend towards “premiumization” in all consumer goods, including spirits.
But where a luxury car can be out of reach, even if you can’t afford, say, a really expensive Scotch whisky, you can probably afford a glass of it in a bar. It’s an affordable luxury.
“Recession” is a word on a lot of minds these days. Are premium spirits particularly vulnerable to the effect of a recession, if one does arrive?
That’s a hard question because it’s difficult to define the word “premium.” At the very high end, some of the $5,000, $10,000 and $20,000 bottles might be hard to move, but at the same time, people are always going to drink. And with the recent trend of “trading up” to higher-priced but better-quality spirits, people are worried about paying too little because they equate price with quality.
You talk a lot about flavored vodkas in the book. Are they reaching their limit in terms of varieties and selection?
I hope so. But I think we will see flavoring move into other areas, like the flavored tequila I just recently tasted.
You also give considerable space to Scottish whisky. Is it still a force to be reckoned with in the spirits world, or has its time as a market influence passed?
I think that we’re just seeing the beginning of the whisky trend. Younger drinkers in their 20s and early 30s are really coming around to whisky, and they’re very interested in single malts. I think this market is going to be huge.
Are premium spirits only strong in the major urban areas, or is this something you see everywhere?
I think it’s across the country. The market is demanding premium spirits, whether you’re in New York City or central Pennsylvania.
You chronicle extensively the current cocktail renaissance, but really, how far does its influence stretch beyond places like New York, Los Angeles or Las Vegas?
To be honest, I believe that, like whisky, this is just the beginning for cocktails. We’ve already seen the trend of bottle service [where full bottles are sold at nightclubs] creep across the country, and while it’s going to take some time, I think cocktail culture will follow.
One interesting fact that appears in “The Business of Spirits” is the growth of the spirits sector, cited as increasing by nearly 60 percent between 1997 and 2005, versus the 35 percent decline in per-capita spirits consumption between 1975 and 2005. How do you explain that?
It’s the mantra of the industry that people are drinking less, but drinking better. So they’re spending more, but actually buying and drinking less.
You write about the recent history of bourbon, including the trend towards a smoother, sweeter spirit. How do you relate this to the current fashion for sharper-edged American rye whiskey?
It’s sort of like with chocolate. People begin with sweeter milk chocolate, but they soon start craving darker and darker chocolate. In whiskey, people are introduce d to the category by these sweeter, smoother whiskeys, but then they want stronger, bolder flavors.
You talk a lot about premium tequilas, even mentioning them in your chapter on the “New, New Thing,” but we’ve been hearing for years that tequila would be the next big thing. Is it now at its apex?
The premium-tequila world is divided in two right now: the single best seller and all of the rest. I think there’s still room for growth in the segment, though, especially within the higher-end categories of reposado, añejo and the new designation, extra añejo, which needs to be at least four years old.
Gin is a spirit that’s a favorite of mixologists and maybe even the “next big thing,” and yet it receives scant mention in your book. What do you think the future holds for gin?
In recent years, gin has been taken over by the vodka category to the point that it’s often overlooked by drinkers of white spirits. But in the last year or so, I’ve seen a lot more interesting gins come out. I don’t think a comeback is out of the question.
AT A GLANCE Title: “The Business of Spirits”Subtitle: How Savvy Marketers, Innovative Distillers, and Entrepreneurs Changed How We DrinkList price: $24.95Publishing info: released in 2007 by Kaplan Publishing; 189 pages including index and eight pages of color photos; hardcover
What in your view is going to be the “New, New Thing”?
Cachaça has a real chance. Tequila is a safe bet; it’s here and will only get larger. Pisco has a chance. Savory rather than sweet aperitifs—flavored with herbs and artichokes and those sort of things—are really coming on strong now.
You close the book talking about the upper threshold for cocktail prices, but we’ve seen some restaurant prices soar, to the point that we now live in the age of the $80 steak. Do you really think a mental price barrier for cocktails exists?
When an entrée is $25 and a cocktail in the same restaurant is $15, it seems like something is out of whack. Once the price of a drink approaches the price of the main course, I think people will start to back off.
Stephen Beaumont is a veteran beer writer and author of five books on the subject. His writing on beer, drinks, food and travel appears in a wide variety of national and international publications.
