Video: Whiskey and cherries?

By
CNBC
updated 6/22/2005 2:25:20 PM ET 2005-06-22T18:25:20

It’s a celebration of all things brown, at least in the multi-billion distilled-spirits business. At the Chicago Whiskey Festival, producers from around the globe are on hand to entice the sipping set to try whatever's new, which in whiskey usually means whatever is “old.”

“Old Fitzgerald, Cabin Still, all the imagery and the sell is tradition,” says Dean Phillips, president and CEO of Phillips Distilling, based in Minneapolis. “If you go to the vodka section you see all new, sexy, packaging, and we thought there has to be an opportunity to transfer those key learnings to this section.”

And that’s exactly what he’s doing.

“We're probably best known for inventing the schnapps category in 1935, followed by the flavored vodka category in the 1950's. My father Eddie Phillips, his vision was luxury vodka in the 1990's, he started Belvedere and Chopin vodka, and now we're trying to 'reinvent' the whiskey category.”

The reinvention is Phillips-Union, a blended, premium, small batch, whiskey -- the “union” of Canadian whiskey and Kentucky bourbon that “smoothes” out the traditional bite in the category. And Phillips hopes it appeals to a whole new generation of whiskey drinkers.

“It's the same thing Andrew Rusher did in Scotland when he was the first to take whiskey from different parts of Scotland and put them together in the same bottle. To this day 90 per cent of Scotches sold are blended scotches,” says Phillips.

But Phillips is doing more than blending -- he's “flavoring.” He’s produced the first “flavored” whiskey in America, a vanilla and a cherry version. If it worked for vodka -- and it did in a very big way with flavored vodka accounting 15 percent of all vodka sales -- why not the whiskey category? Forty-four million cases of whiskey were sold in the U.S. last year, most of it mixed with something else.

“People are ordering $12 Manhattans in New York City and often times the bartender will pour a $1.99 maraschino cherry juice in the Manhattan. Why not add natural royal ann cherry flavor to the whiskey ahead of time … you're half way there my friend,” Phillips says.

Being a small company -- only 15 members are permanent staff -- Phillips thinks he has an advantage over the bigger players in the distilled spirits business. While they're working on merger and acquisitions, he's working on new product and can afford to keep it in the pipeline and on the shelves a lot longer than they can, thus increasing his chances of success.

“If we do one days worth of Jack Daniels volume, we'll be thrilled. If we do two or three days worth, we'll be in heaven. Bottle by bottle, drink by drink, bartender by bartender, store by store is how we approach it,” Phillips says.

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