Single malt hit the big time in 2012. Director Ken Loach made a film called The Angels’ Share and it put what many see as a specialist category in the spotlight. Literally.
If a film about whisky showing at mainstream cinemas isn’t enough to convince you that consumers have a thirst for malt, then the Scotch Whisky Association’s assertion that the value of single malt went up 29% to £744m in 2011 should do it.
With its burgeoning popularity comes new dilemmas. Not everyone is on the same page and, in some countries, consumers are still a chapter or two behind. As consumers in parts of Asia start to make the move from blends to single malts and look for the prestige associated with age statements, more mature whisky markets, such as the US and western Europe, are looking beyond age to help them decide what to drink. And so producers are looking beyond age statements for other options – including vintages.
Vintages have fuelled the debate over the importance of age statements, with several single malt producers opting to display a year of distillation rather than an age. Vintages come from the year stated on the bottle – so in a 2000 vintage, all whisky was laid down in 2000. A 12-year-old whisky, for example, could contain any number of “vintages” of the same single malt, as long as the youngest was 12 years old.
One of the greatest benefits of vintages is that producers are effectively creating a limited edition of a product from a single year that could coincide with any number of birthdays, anniversaries or similar occasions. International Beverage head of malts Iain Baxter describes vintages as a “more fun approach to age statements”. The company’s Balblair brand made the switch to vintages in 2007. In the company’s results, released in July 2012, International Beverage reported a 13% lift in Balblair sales.
Baxter says the company is “not thinking about moving any other brands to vintages at the moment”.
He describes different consumers and says those that are whisky enthusiasts and regular consumers are “not necessarily looking for an age statement”. Although he adds that, to consumers who only make one or two big-brand purchases a year, “age is probably still important”. Baxter applauds the Berry Bros & Rudd Spirits brand Glenrothes and its Maturity Matters, Not Age campaign.
Glenrothes was one of the first to move to vintages. BBR Spirits brands marketing director Luke Tegner says: “At Glenrothes we’ve been trying to explain for years that maturity is more important than age in the resulting whisky. I think consumers are beginning to agree. Whether vintage or reserve, a mature whisky of fewer years in outstanding wood can outshine a very old whisky aged in tired, spent or overused wood.”
But not everyone is convinced a vintage approach is the right one for whisky. Diageo’s head of whisky outreach, Dr Nick Morgan, says: “Generally speaking, we’re a little uncomfortable with the vintage concept,” adding that a concept applied to wine, where a ‘vintage’ relies on annual grape harvest, “can’t be applied to whisky”.
He adds: “In the past, age statements were used as a principal signature of quality in a market that was undeveloped. The [single malt] market is only about 40 years old – so it’s far from being mature. As the market reaches maturity, and consumers become more familiar with it, they are less beholden to having a number on the label or less inclined to believe that older is better.”
Morgan says some people are even making a big deal out of younger age statements. “What people are really interested in is flavour,” he adds.
But Balvenie global brand director Julie Page argues that age statements are “reassuring” for some drinkers. “They are a really important signpost for the consumer. It’s important for them to know that a lot of time and effort has gone into a product.”
Perhaps the key, then, is getting consumers to understand exactly what the maturation process means. Cue Chivas Brothers, with its single malt The Glenlivet and its Age Matters campaign. The Glenlivet brand director Nikki Burgess says: “We regularly conduct research to better understand our consumers and have found that only 10% of whisky drinkers understand that an age statement refers to the youngest whisky in the bottle. Nearly half (48%) believe an age statement refers to the average age and 35% believe it signifies the oldest whisky present.
“The Age Matters campaign addresses this knowledge gap and is something we are committed to globally. Ultimately the campaign is about educating consumers so they can make an informed choice and we think it will benefit the whole industry.”
There is room for both, of course, and Burgess adds: “Chivas Brothers believes both aged and non-aged whiskies have a role to play in offering the consumer a distinctive tasting experience. Each product has a unique story and aims to satisfy the individual’s needs.
“For example, alongside our significant high-aged portfolio, Chivas Brothers caters for consumers looking for complex and challenging expressions such as Aberlour A’bunadh, which do not carry an age statement but are clear about the proposition – in this case, bottled in limited quantities and at cask strength.
“However, with more than 85% of the scotch whisky market aged 21 years and above, Chivas Brothers has the most comprehensive range of high-aged whisky products available on a permanent basis and therefore has a responsibility to ensure consumers understand what the age statement represents.” The Glenlivet sold 800,000 cases in 2011, according to its latest results, surpassed only by Glenfiddich, which became the first single malt brand to pass the one million case barrier. Burgess says The Glenlivet brand enjoyed “strong growth in the Asia Pacific region, with outstanding performances in Taiwan, India and Australia in particular” in 2011/2012.
The Glenlivet isn’t the only company to report prosperity in the East.
The Glenrothes has grown 51% in the past two years and Diageo’s performance to the end of June fell just short of double-digit volume growth with just over one million nine-litre cases of single malt.
Glenrothes’ Tegner adds: “Whereas in the past only Spain and the US could be considered major markets, now the footprint includes the UK, Canada, Taiwan, Duty Free Europe and Asia.”
Diageo’s Morgan says of the one million or so cases of single malt that the company sold, 60% was in Europe, 10% in the US and almost 30% in Asia Pacific.
“Four years ago, it was 2% in Asia Pacific,” he adds. Taiwan is a stronghold for Diageo – it’s the company’s second-largest export market after France and, according to the Scotch Whisky Association, it’s the third largest market in the world by value (see table).
Overall, Diageo’s Singleton brand reported some 30% growth. Morgan says it performs well in Asia Pacific and is now the second-largest single malt brand in Taiwan.
Diageo first launched the Singleton of Glen Ord in Asia Pacific and Morgan adds: “We invested money, time and passion and we’re reaping benefits of four to five years of effort.” The company announced last month that it has applied for planning permission to double the production capacity at Glen Ord distillery in the Highlands. This represents a £25m investment.
The Balvenie’s Page also cites Taiwan as an important place for investors. She says the brand’s recently launched 50 year old, priced at £20,000 a bottle, sold out in 10 minutes – though it’s worth noting that there were only three bottles available in that market. She says The Balvenie is “growing ahead of the category” and describes Asia as an area with a “burgeoning middle class” with an established “interest in cognac”.
From blends to malts
An established interest in cognacs and blended whiskies eventually leads to an interest in single malts, according to producers.
We know blends are big business in relatively ‘new’ whisky markets. Brands such as Johnnie Walker and Chivas are driving the blended category, along with the likes of Old Parr, Buchanans and White Horse, but once consumers become familiar with whisky they look to single malts, and Asia Pacific has been driving growth across the board.
Glenfiddich global brand director Katie Rawll says a “susceptibility to international brands” is apparent in Asia and describes China as a place that is shifting from blends to single malts.
She adds: “Drinkers enjoy blends first then try single malts. It feels like China is getting to this stage. We are seeing single malt whisky bars open in cities such as Shanghai.”
In China, drinking blends long with cold green tea is an established serve and Rawll describes the trend for single malts as “a new drinking ritual compared to blends”. She adds: “People are drinking single malts neat or over ice. Gradually they may opt to use them in classic cocktails.”
Interestingly, western Europe and the US are probably seen as emerging markets for products such as baijiu – who knows how many different types there are and when we might be ready for aged variants?
Right now, though, aged or not, single malt is enjoying more than just the angels’ share.