The Distilled Spirits Council of the United States held its annual economic briefing in mid-February and it’s official: whisky is hot. Again. Or rather, still. Bourbon and rye are up almost six per cent to 24.5 million cases, which translates into $3.6 billion in revenue. Single malt Scotch volumes are up 7.6 per cent to 2.3 million cases, a 9.4 per cent revenue increase to $843 million. Irish whiskey, up 10.2 per cent to 4.7 million cases, is soaring for the ninth straight year.
The whisky boom has been a headline for many years now. It’s been chalked up to the retro television series Mad Men. It’s been chalked up to education. It’s been chalked up to people seeking out products with genuine stories and heritage. But I ask the following question not because I’m a pessimist, but because I’m a realist: whenceforth cometh the whisky bust?
For shame, you say. How dare I? If anything were to take down whisky, and I speak of whisky as a whole category, it would be a David over Goliath victory, even if you consider legal marijuana. Since whisky surpassed U.S. sales of the seemingly immovable vodka category in 2014, it’s hard to imagine any other spirit coming close to moving the dial.
But it’s the basic laws of physics, couldn’t you say? For every action, there’s an equal and opposite reaction. Celebrities fall, comets fade, stock markets crash, and, as the poets say, nothing gold can stay. You can also think of it like so: at some point, someone will finish a marathon in record time and no other runner will beat it. The human form just cannot move faster. At some point, the iPhone won’t be able to process information any faster.
According to the council’s numbers, revenue growth far outpaces volume, indicating that consumers are not drinking more, they’re drinking better. This idea of not drinking more got me thinking. Moderation and safety are, of course, a standard that every community, society, and individual should abide by.
I ask the question because I'm a realist: henceforth cometh the whisky bust?
What makes this trend interesting now is that it’s in some part the result of Americans’ obsession with what we’ve never been obsessed with before: health and wellness. This is especially true among millennials, who, demographically speaking, are a sweet spot for liquor companies. A 2018 report from Berenberg Research found respondents in their teens and early 20s were drinking more than 20 per cent less per capita than millennials, who drank less than baby boomers and Gen Xers did at the same age.
But younger generations’ decision to drink less is driven by more than health. It’s fuelled by “surveillance culture.” Get yourself tagged in one embarrassing Instagram photo and a would-be boss might spot it down the line. Opportunity, ruined. I’ll call this bust-bound theory #1.
Bust-bound theory #2: politics. Our global trade situation is, simply abysmal. At the time of writing this, Brexit had yet to be sorted, leaving the future of Scotch exports anyone’s guess. Meanwhile, Trump’s tariff fixation has taken a toll on some of America’s most prized products, Bourbon included. According to the council briefing, since the administration introduced tariffs in 2018 on foreign aluminium and steel, $763 million worth of American spirits exports have been subject to retaliatory tariffs. The severest duties have been seen in Europe, which levied a 25 per cent tariff on American whiskey.
Bust-bound theory #3 is the most radical, yet, I fear, feasible of, them all: climate change. My worry goes far beyond extreme weather’s impact on grain crops and other things that could influence production. Based on the United Nations Intergovernmental Panel on Climate Change’s so-called Doomsday report, we have until 2020 to take serious action to avoid catastrophe. If the report’s numbers aren’t enough, consider that a recent heat wave in the Northern Hemisphere killed dozens and some of California’s most destructive wildfires burned more than a million acres of land. Hurricanes in the Pacific forced three million people in China to flee and it goes on. Certainly nobody is going to be drinking whisky if calamity forces them to become climate refugees. Or worse. Now, if you’ll excuse me, I need to go pour myself a drink.