It’s no secret during the last few years the whisky world has been expanding. Twenty years ago, any kind of threat to the three-way oligarchy of Scottish, Irish and American whiskies would have been unimaginable, yet nowadays limited release single malts from India and Japan sell out just as quickly and change hands for many times their release price in the secondary market.
So how has this situation come about? Even with the benefit of hindsight it’s difficult to separate demand from supply as the root cause in this case, but it’s likely that it was the initial work of pioneering importers and retailers taking a punt on new whiskies that led to their discovery by adventurous whisky aficionados.
Once present in the market any new brand must prove its quality to survive. Outside their domestic markets new whiskies from non-traditional countries arguably have to be better than their established rivals to prove themselves worthy of their place on the shelf.
It’s clear new world whiskies have succeeded as part of a more general upswing for quality spirits – meaning the new single malt drinker is very open to other categories.
"The real long term threat to single malt is two fold: American whiskey and Rum"
In other words, the fact that there is currently an increased demand for high-quality single malt emphatically does not guarantee that whisky companies are going to have it all their own way in the future. Modern consumers may have broader palates and be more open-minded than at any point in the past, but these qualities are two-edged. Their desire to taste a wide spectrum of flavours and willingness to experiment will lead them to other brown spirits as well.
The reality of the modern drinks market is that, in terms of choice, consumers have never had it so good. In the long term there’s no telling how good these rivals could become, and certainly the quality of some of the new arrivals should be enough to make the Scotch industry sit up and take notice.
The real long term threat to single malt is two fold: American whiskey and Rum. There are three common threats from both of these spirits: accessibility, flavour and production.
Aged rum has an incredibly diverse and complex flavour spectrum, while the new wave of US distillers have thrown away the rulebook and, lacking the hindrance of a body like the SWA to stifle innovation, are producing some of the most exciting new whiskies on the planet.
Nevertheless, the most significant threat to single malt posed by both Rum and American whiskey lies in the differences in production. Firstly, the majority of both are made with the continuous still, meaning output is both cheaper and far more efficient.
Secondly, the warm climate enjoyed by our neighbours across the pond means that although evaporation loss is greater, their new spirit requires a much shorter maturation period.
Together these two factors mean that both Rum and American whiskey can offer the new consumer a better value mature spirit of arguably equal quality to single malt.
All this adds up to a big challenge for whisky producers. While blends are relatively safe and malts may benefit from an influx of newcomers, they face increased competition to retain younger consumers, who do not possess the same kind of brand or category loyalties of older whisky drinkers. This is even more true in the developing economies.
When the Irish whiskey industry imploded in the early decades of the 20th century, Scotch was perfectly placed to step in and take over as the world’s favourite aged spirit. In 20 years time, if the Scotch industry is found wanting in either supply or quality there are credible contenders for the crown. In years to come the SWA’s decision to ban Coffey-distilled single malt in Scotland might just transpire as an appalling own goal. Twenty years ago, French wine producers laughed in the face of Australian chardonnay. Après ça, le déluge