I mentioned last issue that I’d been stravaiging around Asia. It was brief, sadly, but illuminating going from the 13,000 very happy folk at Whisky Live Taipei, young, both sexes, malt drinkers, interested, educated, committed, to China, which remains the great unknown. The Chinese, a friend tells me, haven’t discovered coffee, (as a tea drinker I’d say why the hell would they want to, but I dare say that Starbucks would disagree). Neither have they discovered whisky.
Hang on, you say. Hasn’t China been held up as the future of Scotch? Well, it may be; though I’d hedge my bets on that. In fact, I get the feeling that currently there is a reconsidering of strategy taking place.
China is still at the stage of whisky being just one option among many imported spirits. Will a country brought up on the unique taste of baijo really go for wood matured spirit, or will vodka be a happier fit?
It all revolves around scale. Not just the issue of distribution of product, but of information. How can you get your message to millions of people? How can you get your liquid to touch millions of lips? There are projects underway, there are committed people, but it’s more than a one-man operation, put it that way.
Part of the issue is that we think of Asia as being homogenous, when it is a host of very different markets.
Japan gives an idea of how a mature market works, operating on a 20 year cycle, and showing ways in which even the most moribund of markets can be revived. Even if the on-trade driven HiBall boom is not yet a whisky boom, Japan has taught us about occasion, serve and service and the need for education at all levels.
Taiwan is fascinating, as it is the only market in the world where malts and blends have equal parity, with an older generation drinking the latter and a new drinker the former. It’s a demonstration of how new drinkers can come straight into malt and also, from a producer’s point of view, how to target brands to suit a very specific palate.
In contrast, Korea has been the deluxe blend market par excellence. Here, age statements are all, consumption is, frankly, uninhibited, but education is low. With economic problems besetting the country, whisky’s luxury position is affecting sales, showing that even the most prestigious drink can suffer if it does not explain why you should drink it.
There are elements within each of these markets which China can learn from, but there is no single model, no handy guide, hence the current reappraisal. The future, it would seem, belongs to ever greater concentration on the top end. Whisky should become luxurious, elitist and let the messages trickle down over time. The advantage of this is high margins and easier control, fewer consumers to target (though still sufficient to make shareholders’ eyes gleam) making it simpler to engage with the drinker and also control any form of counterfeiting.
Does it sound familiar? It’s what Cognac did in the 80s. It too positioned itself at the very top end then collapsed when the economy went south. Scotch isn’t as exposed as Cognac was, but it is still a sobering lesson.
Maybe this re-examination is good for another reason. If China is growing slowly, does it make sense to throw unlimited resources at a market which no-one quite understands, or is Latin America a better medium-term bet?
There is a balance to be struck however. It’s all very well embracing the world of luxe, but your brand must remain coherent from standard to super deluxe.
Splitting a brand between expressions does not work long term and China is a culture where long-term has the greatest resonance. Equally, while new brands might be created for the Chinese palate, they cannot lose the DNA of flavour which links a brand family. That has been tried in the past, and it hasn’t worked.