Is Scotch a victim of its own success?

These are tricky times for the international trade in Scotch whisky. A number of factors – falling oil prices, currency headwinds in developing markets, the implosion of the Russian economy – have conspired to bring three consecutive years of export declines, according to HMRC figures for shipments from bond.

This is unprecedented in the industry’s recent history. Look back over the past 50 years and – prior to this poor run – you could count the years of export value decline on the fingers of one hand: 1969, 1983, 1998, 2002 and 2004.

Booming sales of American whiskey, which is tipped to overtake those of single malt Scotch within five years, prove a competitive threat to the category.

Beyond the obvious macroeconomic causes for the recent decline, we might hypothesise a number of other reasons, including the competitive threat from other spirits categories and the restrictive impact of constrained supplies of single malt (the value of malt exports fell in 2015, but market share increased because blends fell faster).

Over the past half-century, Scotch whisky has been transformed into a global powerhouse of an industry, and one that is increasingly reliant for growth on the performance of developing markets in Asia, Latin America, Eastern Europe and sub-Saharan Africa.

Scotch’s aspirational status makes the rewards here potentially huge, but the flipside is market volatility. Brazilian consumers might lust after Johnnie Walker, but if the weakening real sends Red Label prices up 30-40% in a year, they’re likely to go back to drinking locally produced cachaça instead.

The greater truth behind the numbers is the relative maturity of Scotch whisky around the world. According to WhiskyInvestDirect analysis of the HMRC figures, 27 countries imported more than 500,000 cases of Scotch in 2015; in 1985, the figure was just 14.

Scotch is an industry that is increasingly mature in its global footprint, and that is both a boon and a potential burden: it constitutes a spread of risk (if one market falls, chances are that another will pick up the slack); but it also reduces the headroom for future growth.

Don’t get me wrong: there are still vast opportunities for Scotch around the world, but the number of untapped markets with true and large-scale growth potential is unquestionably smaller than it was a generation or two ago.

To that extent, Scotch whisky has become a victim of its own international success.