The inside story of the US$150m distillery, and the remarkable landscape it calls home.
So there I was, sitting at a table outside a bar in Xiamen thinking how strangely like Miami it was, when Ariel Miao said: ‘We have a saying in China that when something grows really fast it has been injected with chicken blood.’ I must have looked surprised as she quickly added: ‘I don’t mean we really inject chicken blood into our veins’, which was a relief. While I didn’t really think that it was an actual practice, it is always good to have these things confirmed.
We had stopped for a breather before the night’s dinner at the Meridien which would see top-end malts, amazing food and continual toasting, similar to what had happened the night before, and the night before that, and which would continue in the same manner deep into the following week. If you cut me it wouldn’t be chicken blood which flowed out, but whisky.
Her analogy was spot on. Two days before, at Diageo’s now annual Whisky Summit in Guangzhou, Jim Beveridge had leaned across to me. ‘Do you get the impression that this is about to explode?’ he’d asked. I’d nodded in agreement. There was a feeling in the room that went beyond the usual bullish predictions for the year ahead and rallying calls to the troops. A sense that Scotch was indeed on the verge of doing something remarkable in mainland China, and that the predictions weren’t a self-deluding fantasy but a realistic (indeed sober) reflection of a new reality.
Scotch bubble: China’s thirst for single malt is only just starting to grow
China has long been seen as the great prize for Scotch, yet it’s a market which has remained tantalisingly hard to crack. It’s almost been as if the scale of the task has made firms freeze in the headlights. How could they penetrate such a huge market without just throwing money into a huge hole and discounting heavily simply to get a foothold?
To give you an idea of the potential rewards, Diageo’s aim to grow whisky to more than 50% of the imported spirit market would deliver RNB5bn (£500m) to Scotch. If that sounds ambitious then chew on this next figure for a second. The total spirits market in China is worth RNB510bn, with baijiu accounting for 98% of the sales. Seen in that light, a 50% share of the 2% international spirits sector seems almost modest.
It’s been tried before and stymied by distribution issues, anti-corruption purges, and a clampdown on entertaining, but whisky firms’ strategies are changing and the battle for palates and minds has taken a different turn. While there’s been regular talk of the scale of the consumption of high-end (and high-aged) whiskies, there is increasing evidence that this isn’t being driven by a desire to show off but because people genuinely like the taste.
The Scotch being bought at auction, and the single casks being snapped up, aren’t being stashed away or flipped, but are being consumed and enjoyed at home and also in whisky bars, 300 of which opened in the last year alone. There is, in other words, a rapidly growing connoisseurship.
The new Chinese market isn’t being built on the back of blends as was predicted, but on single malts, and the demographics are in its favour. The country’s young, growing and increasingly affluent middle classes are finding that malts reflect their aspirational lifestyles. To grow, Scotch has to educate rather than sell cheap.
Whisky experience: Xiamen's new Whisky Boutique teaches consumers about both blends and malts
I’d spent the afternoon talking to whisky bloggers at Xiamen’s new Whisky Boutique, an elegant Diageo-backed store which manages to balance retail space – and a wide selection of whiskies from all companies – with areas where customers can learn about blending, aroma, malts, and have sit-down tastings. The emphasis isn’t on the hard sell of expensive whiskies, but on education, teaching, and flavour. Two other boutiques have opened in Guangzhou and Shantou with more rolling out nationally in the coming year.
Malts suit the Chinese dim sum mentality, of picking and choosing from a wide range of flavours, and switching between them, rather than sticking with one brand, and with more offerings and China-only releases, it would seem that the menu is getting ever longer.
In fact, the only issue is whether there will be sufficient juice to satisfy the demand as it will be impossible to sustain the growth at the top end. If growth is to be maintained, there has to be a gentle weaning off the lust for extra-aged whiskies and a recalibration of the market by finding new ways of talking about blends. It has to start soon, as the chicken blood is pulsing strongly in the nation’s veins.
From the editors 19 December 2018
Whisky must adopt a different approach to tap China’s market potential, writes Dave Broom.
From the editors 23 May 2018
In the quest for whisky information, says Dave Broom, never neglect the power of emotion.
Latest news 04 September 2019
Pernod Ricard has said its Chinese distillery won’t ‘cannibalise’ Scotch whisky’s market share.
Latest news 29 August 2019
The drinks giant has started building a malt whisky distillery in Sichuan province.