The whisky world is changing

My life isn’t all swish launches and whisky festivals, you know. There’s a business to consider, which is how I ended up being invited to Edinburgh for the Scotch Whisky Association’s (SWA) annual Members Day. The theme this year was ‘The Changing World of Whisky’. As the SWA’s chief executive Karen Betts said in her keynote address, ‘Scotch whisky is the world’s number one internationally traded spirit, and more Scotch is enjoyed worldwide than American, Irish and Canadian whiskies combined.’ But that world is changing rapidly.

Let’s put this in some sort of context. In 1870, the world of aged spirits had four major players: Cognac, and Irish, Scotch and American whiskies. By 1900, the global battle was between the last three. By 1921, only Scotch was left and it remained that way for the rest of the century. Okay, American whiskey came back post-war, but never forget that Canadian whisky still outsold Bourbon in the United States until the end of the century.

Top dram: Will Scotch continue to be the most popular whisky in the future?

Since then, the whisky world has changed utterly. It’s worth remembering that Japan only started to export in any volume in 2000. At that point there were three whiskey distilleries in Ireland. Now there are 35, while there are 20 in England and… well, I could go on. All of that has happened in the last decade. The century of Scotch is over, as is its hegemony. To paraphrase Judy Garland: ‘Toto, we’re not in Kansas anymore’ (though we perhaps should be aware of what is going on there).

As the SWA’s chairman Peter Gordon said in his opening remarks, ‘Whisky across the world has seen an increase in activity, but Scotch’s share has fallen… We have real and capable competitors across the world, and while I remain optimistic, there are headwinds to overcome.’

His cautious warning underpinned Betts’ vision of the state of Scotch in 2050, and the multifarious ways in which the SWA would be involved (something which I think isn’t as well-publicised as it should be): climate change and the aim for the industry to be carbon neutral, free trade, training and skills, taxation, gender balance and diversity, packaging, transportation, farming, social responsibility and… yes… Brexit, which might just be sorted by then.

Her belief is that ‘Scotch will remain the world’s pre-eminent whisky… its global competitors… will have done their best to knock us off our perch in the intervening years. But they will not have succeeded. Because Scotch whisky’s consistency, quality, diversity and authenticity, alongside its heritage and its stories, will win the day.’

Industry rebirth: New Irish whiskey distillers, such as Killowen, are opening

There is no reason to doubt this, but without wishing to diminish the importance of all of the elements in Betts’ perceptive analysis, for any of it to happen depends on the quality of the spirit and the ability of the industry to change with the times.

Whisky is a long-term industry where innovation, by necessity, takes time. Scotch, however, is having to learn how to be nimble and meet challenges it has never encountered before.

‘Our industry is good at change,’ Betts added, ‘and remarkably resilient in finding balance between continuity and change… By 2050 we will have innovated in our products, so too will we have innovated in the way that we make Scotch.’

This is no time for complacency and seeking comfort in the mistaken belief that just because Scotch is the biggest player it is automatically the best. It’s pretty easy to be the biggest and best in a field of one. Those days have gone.

For Scotch to retain its pre-eminent position it is important to understand the difference between pride and arrogance. The SWA has realised this; what about all of its members?

Star spirit: Japanese whisky continues to enjoy a surge in popularity

Delivering Betts’ vision will necessitate hard work and open minds. It will mean all of the industry understanding that Scotch’s competitors are every bit as obsessive about quality as it is. It involves tasting these new rivals and discovering why a new consumer might be excited by the new wave of Irish, Danish, Aussie or American whiskies. Whether their industries are smaller than Scotch is immaterial. How good is the juice, and what can Scotch do to compete, without losing its own identity? Those who don’t see the need for change are the ones who will suffer.

As the world of whisky evolves so too will people’s idea of what whisky is in terms of flavour, production, sustainability, occasion and method of consumption. That will mean that definitions will inevitably have to shift, another facet of Betts’ innovations in the way in which Scotch is made.

The arrival of a multiplicity of new, small, independent distillers also means that the SWA itself will have to change in order to accommodate their thinking, and understand their challenges – and I’d argue that it is best for all Scotch firms to be inside the tent (as the saying goes).

As Betts said, ‘2050 isn’t far away.’