Pernod Ricard has struck a deal to acquire a majority stake in US flavoured whisk(e)y brand Skrewball.
The deal, announced today (21 March) will see the peanut butter-flavoured spirit join Jameson Orange in Pernod Ricard’s flavoured whisk(e)y roster. Financial terms were not disclosed.
In a release announcing the transaction, the Martell brand owner hailed the appeal of flavoured whisk(e)y and its role in growing the broader whisk(e)y category.
“Flavored whiskeys appeal to a wide range of consumers, going beyond traditional whisk(e)y lovers,” Pernod Ricard said. “It remains one of the fastest growing spirits categories in the US, representing a quarter of the overall whisk(e)y sales in the world-leading market.”
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Skrewball was founded in 2018 by Cambodian refugee Steven Yeng and his wife Brittany, a former chemist. The 35% abv drink sold 500,000 nine-litre cases in 2022 and is available in the US, Canada and Puerto Rico.
It carries an SRP of US$28 per 75cl bottle, making it more expensive than the flagship offerings from Brown-Forman’s Jack Daniel’s (circa $21), Campari’s Wild Turkey ($20) and Beam Suntory’s Jim Beam ($14) brands.
Ann Mukherjee, the CEO of Pernod Ricard’s operations in North Americ, said Skrewball’s peanut butter flavour offered a point of difference to consumers.
“Skrewball has proven its uniqueness and success with a large audience, so we are delighted to have this brand as part of our portfolio,” she said. “With a product that brings an iconic American flavour to the spirits world, Steven and Brittany have found a true point of difference in the category.”
Following the group’s half-year financial results last month, Pernod Ricard’s CEO Alexandre Ricard discussed the role of flavoured whisk(e)y as an entry point to the broader category.
Ricard revealed he had bowed to consumer pressure in launching Jameson Orange, and said one in two consumers of the drink was new to the Jameson’s franchise.
“The reality is that consumers want absolutely want to see brands experiment with new flavours, new propositions, and then they like them or they don’t,” he said. “In Jameson Orange’s case, they absolutely do.“
“It’s doing precisely what it was designed to do,” he added.
In a note recirculated following the acquisition, Nadine Sarwat, an analyst at AllianceBernstein, praised Skrewball for its contribution to flavoured whisk(e)y growth, stating the brand had gained a 9% volume share of the US flavoured whisk(e)y market in the last three years.
Sarwat warned, however, the segment may be reaching an inflection point following an explosion in the number of whisk(e)y brands offering flavoured extensions.
Comparing the development of flavoured whisk(e)y to that of flavoured vodka, Sarwat said there was a risk of “flavour fatigue”.
“At first flavours are exciting and novel,” Sarwat wrote. “But once consumers can pick any flavour ranging from the traditional (honey) to the extraordinary (root beer) they become overwhelmed. The category eventually feels crowded and commoditized to them, and therefore boring.”
Last year, Pernod Ricard’s European peer Campari made a flavoured whisk(e)y move of its own, taking a minority interest in Catalyst Spirits’ Howler Head, alongside the exclusive rights to distribute the Kentucky Bourbon brand globally.
The deal – valued at $15m – saw the Aperol brand owner buy a 15% stake in Howler Head, with a medium-term view to owning the brand outright.