World Whisky Day: Scotland’s global export

‘Too much of anything is bad, but too much good whiskey is barely enough,” Mark Twain reputedly declared. The author might have been referring to his own tastes and drinking habits, but as dram-lovers around the globe celebrate World Whisky Day today, his words are also proving prophetic, with the insatiable demand for top-end malts provoking a quiet revolution in the way we enjoy our national drink.

Last month the Scotch Whisky Association (SWA) announced that Scotch whisky exports had reached a record £4.3 billion in 2012 – an astonishing 87 per cent increase over the previous ten years. A closer reading of the figures reveals a more complex picture: after massive increases in previous years, the value of whisky sales did rise again in 2012, but the quantity sold actually fell in key European markets.

Scotland’s liquid gold is one of our country’s great economic strengths, accounting for one quarter of the UK’s entire food and drink exports, and at the heart of it all lies whisky’s secret weapon: luxury-brand single malts.

Single-malt exports have risen over the past ten years by 190 per cent, from £268 million to £778 million. The USA is still the biggest foreign market, but malts are also impressing big-spending drinkers in Singapore, Latvia and Venezuela. But with so many single malts being gulped down on exotic shores, what does that mean for those of us looking to enjoy our favourite drams in home surroundings?

A slump in production in the 1980s led to distilleries across the country being dismantled or mothballed. Over time, remaining stock of the best of those, such as the now near legendary Port Ellen, has become increasingly hard to find and prohibitively expensive for most drinkers. The wider impact was that there were simply not enough casks put aside to meet the current demand for aged whisky.

Many of the top-selling A-list malts that once made a name for themselves by virtue of their maturity are trying to shift focus from the fact they simply are not as old as they once were.

If you have got £16,500 to spare you can slurp down a special-edition 60-year-old Macallan from a Lalique crystal bottle whenever you like, but try to pick up a bottle of 15-year-old in your local off-licence and you will most likely find yourself directed to a bottle marketed on whether it is Gold, Amber, Sienna or Ruby in colour.

It is not necessarily a bad thing. While in most cases age mellows your malt, the type of cask it has been aged in also plays a vital role in the finished flavour and colour. And as Kilchoman – the newest Islay distillery, established in 2005 – is already proving, a young malt can still be immensely enjoyable. Those in Scotland seeking older drams are starting to explore the world of single-cask whiskies.

The move to focus on more than age alone also reflects the determination among many of the big-name single-malt brands to capture a younger market, as well as to encourage more female drinkers to swap from clear spirits to gold. And that trend is being picked up by Scotland’s cocktail makers.

What was once the preserve of serious old men and passionate enthusiasts is now being mixed with marmalade and orange liqueurs in city-centre bars. Still, we have got some way to go before we reach the exotic cocktails of some other nations.

Blair Bowman, founder of World Whisky Day, said: “It’s a very interesting time for whisky in Scotland, with the shift from age giving people a chance to make up their own minds about what they’re drinking.

“One of the exciting things about being involved in WWD is seeing the myriad ways people enjoy their whisky. Whether with green tea in China, condensed milk in Costa Rica or cocktails made specially to let whisky flavours shine through, it shows how versatile whisky is, as well as being a fantastic drink on its own.”

So just who in the world is drinking all this Scotch? And how do people in other countries enjoy their whiskies?

NORTH AMERICA

They gave us Jack Daniel’s. And Coke. We gave them £758 million’s worth of Scotch. America remains the biggest Scotch market and is still growing. Exports to the USA broke through the £700m barrier last year with a 16 per cent rise in sales.

While whisky in the USA is still primarily bourbon, there’s a growing interest in single malts and the SWA predicts demand will continue to increase “as consumer confidence grows and many people trade up to premium brands”.

Jillian Scott from California is an ambassador for the Scotch Malt Whisky Society and tweets as @whiskychica. “There is definitely a special place in people’s hearts for bourbons, I think that’s always going to be the case with a home-produced product, but Scotch malt is seen as a premium product, and the best you can get,” she says. “We’re also starting to see single malts being made in America. The Virginia Distillery Company, for example, makes a single malt in traditional copper stills brought over from Scotland. The Balcones distillery in Texas has managed to make a smoky whisky without using peat. You can find it in a couple of specialist bars here in Scotland. It tastes like smoked maple spirit.”

But she doubts that American single malts will prove a threat to Scotch imports any time soon. “I think there’s an attempt to emulate what’s happened with the success of Japanese whiskies, but there’s already a history of bourbon here and that’s going to be hard to break away from.

Scott says the new trend for whisky drinking by young people in other parts of the world is also being seen in the USA: “It’s still very much seen as a man’s drink, but there’s a boom here with youngsters getting into it who want their drinks to have more depth and pack a lot of flavour.”

WESTERN EUROPE

Whisky in western Europe has suffered a pretty miserable blend of fortunes recently, but the drink’s growing popularity in financially stable Germany suggests it is economic factors, not a lack of enthusiasm, causing the problem.

A 25 per cent drop in sales last year to beleaguered Spain, the fourth biggest importer of Scotch, is self-explanatory, and the Auld Alliance with France suffered a blow in 2011 when the government announced a hefty excise tax increase for the following year. Canny French importers stockpiled as much as they could at the time, leading to a profit-denting 19 per cent decline in sales in the world’s second biggest Scotch market in 2012.

While many in western Europe can no longer afford to drown their financial sorrows in whisky, wealthy Germans are lapping it up.

Marcus Rudek of the Special Whisky company is hosting a tasting event at Lake Constance in Southern Germany for World Whisky Day. “In Germany whisky is rather popular, though we drink more schnapps than whisky or gin,” he says. “You get an ordinary blend in every restaurant or pub. But in the meantime there are more and more whisky enthusiasts who specialise in single malts.”

These enthusiasts helped boost a 13 per cent rise in whisky imports last year to £169 million, meaning Germany is now the product’s fifth biggest foreign market.

Like Japan, Germany is developing its own whisky industry, but according to Rudek it is unlikely to rival Scotch any time soon: “German whiskies are on the rise. Currently there are over 50 distilleries in Germany producing whisky. But most of the people compare the German whisky with the Scotch and are disappointed. You mustn’t do this as it’s simply a different kind of spirit.”

LATIN AMERICA

Blair Bowman’s tales of whisky and condensed milk served in the bars of Costa Rica may not entirely reflect the drink’s more sophisticated image in other countries in the region. According to Rosemary Gallagher of the SWA, whisky in South America is very much an “aspirational drink for young professionals”.

Sales of whisky in Latin countries are soaring. Scotch exports to Venezuela rose by 23 per cent in just one year to more than £100 million in 2012. Up in Mexico, it might have some way to go to match tequila for popularity, but whisky sales there increased by 14 per cent to £92m last year. Trade agreements with Colombia and Peru in December are expected to boost sales there in the coming year.

In Rosaria, Argentina, whisky enthusiast Matias Jurisich of Le Club Club Cocktail Bar is celebrating World Whisky Day with a range of new cocktails.

“In Argentina whisky is a premium drink, popular with wealthier customers,” he says. “Although traditionally people have chosen lighter aperitifs such as vermouth, there’s also more interest now in drinking aged spirits and, while we do have some local whiskies, I’d say nine out ten drinkers prefer imported brands.”

EASTERN EUROPE AND RUSSIA

While Russia’s wealthy elite has fuelled sales of luxury products, the rise in whisky sales in eastern Europe is also down to demand from a growing middle class, according to Gavin Hewitt, chief executive of the SWA.

Much of the £79 million of Scotch exported to Latvia and £69 million to Estonia last year will have ended up in Russia, a market estimated to be worth £200m. But with exports to these two countries rising by 48 per cent and 28 per cent in a year, it seems a safe bet a fair volume of Scotch is now being drunk within their borders, too.

Economist Michal Piasek, a whisky enthusiast from Poland and a graduate of the University of Aberdeen, says as people in eastern Europe become wealthier and have more opportunities to travel, the social changes can have an impact on drinking habits: “Historically speaking vodka has been the national drink, but it’s changing now particularly among young, city people. Even five or six years ago there were only a few poor-quality blends available and it’s not surprising most people didn’t like them. Now there’s a huge variety of good-quality malts and as people have more money, they go out to bars more rather than having house parties, and they get the chance to try great whiskies in specialist bars.”

THE FAR EAST

The far east’s love affair with whisky shows few signs of abating. Exports to the distribution hub of Singapore reached £339m last year, and sales to Taiwan and direct shipments to China grew by 7 and 8 per cent respectively.

While Asia is toasting Scottish malts, it has also been busy producing some serious contenders of its own. Founded in 1923 the Japanese brand Yamazaki has been gaining fans, not just at home, but also among enthusiasts in Europe, including Scotland.

Bob Chua of the Whisky Tango Foxtrot Bar in Kuala Lumpur, Malaysia, will tonight be hosting 150 guests for a World Whisky Day celebration.

“Whisky is still seen as an elitist and rather exclusive hobby,” he says, “although there are various ranges for various budgets. For our establishment, we are only focused on the top end of the spectrum.

“Consumption of whisky in Asia is growing rapidly, in markets such as China, India and Vietnam, as well as the likes of Malaysia and Singapore. We are also experiencing a huge interest in the Japanese range of Nikkas and Yamazakis which seem to be very popular here, especially amongst the younger audience.”