The following article appeared in The Economist recently……and we feel it adds to the growing debate on globalisation and the growing popularity of scotch whisky with Sheep Dip being championed by benwardsbr .
We think you will enjoy the article and can add to the debate!!!!!
Production of Scotch whisky is starting to boom
Jun 17th 2010
FOR a long time it seemed as if Scotland’s whisky makers were stuck at the back of the bar. While whisky volumes were almost flat, vodka production rose by 3.5% a year for 20 years. The explanation is not difficult to find: Scotch whisky, even basic blends, has to mature in a cask for at least three years, while vodka can be distilled on Monday and bottled, shipped and drunk by the end of the week. As demand flagged, many smaller distilleries closed or were bought by international drinks groups. That led to a change of strategy: a move upmarket which is now paying off handsomely.
With the “premiumisation” of both blended and malt whiskies (some of which are aged for 12 years or more), Scotch exports have risen by over 40% in value since 2000. Despite a global slump, records were set last year: the volume of exports rose by 4% to 1.1 billion bottles worth £3.1 billion ($4.9 billion).
Investment is pouring into Scotch production—about £600m over the past three years. New distilleries are springing up and old ones are expanding. Last year Diageo, the world’s biggest drinks group, which dominates whisky sales with blended brands such as Johnnie Walker and J&B and Lagavulin, a malt, opened a £40m distillery near Elgin, the first new one in Scotland for 30 years. Its whisky will come to market in two years. France’s Pernod Ricard, the world’s number two in drink with brands such as Chivas Regal, Ballantines and Glenlivet, recently unveiled a £10m modernisation plan to boost production of Glenlivet by 75%. It hopes to rival the world’s bestselling malt, Glenfiddich, made by William Grant, still an independent firm.
Although France, America and Spain are the largest Scotch whisky markets the biggest growth is coming from South American countries, such as Brazil and Venezuela, where premium blends are appealing to increasingly affluent consumers. Much of the investment in boosting volume is to build up reserves in the expectation that something similar will happen in India and China.
At present international spirits such as whisky and brandy account for less than 1% of the Chinese market. The Chinese are getting a taste for whisky, although the challenge for Scotland’s producers will be to ensure that they choose Scotch. Just as France’s champagne-makers found when expanding abroad, local imitators will emerge even though they cannot use a regional name. That is already starting with whisky. Kavalan is being made by a new Taiwanese whisky distillery with its sights set on the mainland Chinese market. Kavalan may be fruitier than a smoky single-malt Scotch, in order to appeal to Chinese palates, but the local tipple is eliciting praise from some connoisseurs.
There go my vatted malts such as Old Sheep Dip. Won’t be anything left to blend down, although a useful secondary market in used bottles is always a srong mover. Pity