Did the Jack Daniel’s owner overpay in spending £285m on BenRiach, GlenDronach and Glenglassaugh?
From the Editors
Shorts from our editorial team
14 December 2016
Brown-Forman, the company that owns Jack Daniel’s, Woodford Reserve Bourbon and, since earlier this year, BenRiach, makes its own barrels. A lot of barrels. About 600,000 barrels a year, to be precise.
Why so many? Because, whether each barrel is filled with new make Jack Daniel’s Tennessee Whiskey, or with Woodford Reserve or any of the company’s other Bourbon brands, it can only be used once. By law.
American whiskey is on fire right now. Spearheaded by Jack, it’s sexier than ever in its home US market, but also finding new fans around the globe, from Berlin to Brisbane. More demand means more production, and more new barrels from the Brown-Forman cooperage.
Both financially and environmentally, it makes obvious sense to recycle these once-used casks and find a fresh purpose for them once they’ve been emptied of Jack, or Woodford: typically, that means selling them on to Scotch whisky distillers to mature their own spirit.
This is a nice extra source of cash for Brown-Forman and other US distillers; nice enough for the sale of used barrels to account for about 2% of the company’s revenues in its last financial year. If my sums are correct, that’s about US$80m.
But there’s a problem: just as Brown-Forman is producing more barrels to surf the whiskey renaissance, the makers of blended Scotch are buying fewer of them because their own market has softened.
Brighter prospect: Falling cask prices offer good news for distillers like Glenmorangie
It’s a lesson in the rigours of supply and demand: more supply of used whiskey barrels coinciding with less demand from the Scotch whisky company. Result? Used barrel prices down more than 10% over the past year, and still falling.
It’s concerning enough for Brown-Forman executives to spend some time discussing the issue at the company’s recent second quarter results announcement – hardly surprising if several million dollars has been wiped off your top line.
It’s also a commentary on the current fragility of the blended Scotch market around the world, thanks to a number of issues including macroeconomic factors and, in some countries, an unhelpful pro-malts, anti-blends prejudice.
But it’s not all doom and gloom. Bad news for Brown-Forman means a brighter prospect for Diageo, Chivas Brothers and the Scotch whisky industry in general. There’s a plentiful supply of casks out there, they don’t cost as much as they did – and it’s a buyer’s market.
Something to be cheerful about at the end of a trying year…
09 November 2016
It’s International Sherry Week this week, so naturally I want to talk about Port – because what’s happening in the spectacular vineyards of the Douro Valley might have resonance for Scotch.
Gripped by misty-eyed nostalgia, Port anoraks will rhapsodise about the superlative vintage Ports made during the early 20th century…
‘Sure, this 1994 is nice, but did you ever taste the 1931? And what about the 1912? Before the big companies took over and standardised everything? They don’t make ’em like that any more…’
Any of this sound familiar?
It’s easy to dismiss such fond remembrances as yearnings for a world that never existed – the Olde England of unlocked doors, affable British bobbies and honey still for tea. But even a cynic like me is beginning to wonder…
Port vineyards are historically anarchic; even today, more than 100 grape varieties are permitted, and the vines planted in the late 19th century, after the phylloxera plague wiped out nearly everything, were done so haphazardly and at high density. And yet these packed, chaotic terraces were the source of some of the greatest wines ever made.
Come the 1970s, rationality and science coughed politely, tapped the anarchic wine farmers on the shoulder and suggested a more logical approach. Focus on the ‘best’ grape varieties (five in particular were identified), plant them in separate blocks, pick them at optimal ripeness and make each one into wine before blending them all together.
The reasoning, it seemed, was faultless: use only the finest ingredients, maximise the potential of those ingredients, then use your blending skills to create the best wine possible. In terms of vineyard management, it was cost-effective too.
A river runs through it: Do the vineyards of the Douro hold a lesson for Scotch?
But, about 10 years ago, some began to question this received wisdom. A new generation making unfortified table wines in the Douro noticed that the neglected old vineyards, in which dozens of different grape varieties were sprinkled at random, were making more characterful, complex, simply better wines.
Now the scent of revisionism is in the air. All but forgotten grape varieties replanted, mixed vineyards acquiring a renewed appreciation, different grapes fermented together. No, not everything will be perfectly ripe when it’s picked – but those imperfections, when moulded with skill and experience, only add to the final wine’s quality.
What’s this got to do with Scotch? Listen to David Guimaraens, head winemaker at The Fladgate Partnership, producer of Taylor’s, Fonseca and Croft Ports. He reckons the changes in the Douro during the 1970s did their job in terms of achieving greater consistency – but at a price.
‘We pulled the bottom up,’ he says. ‘But we also believe that we have pulled the top down… we have lost some of the complexity and we have certainly lost the diversity.’
Did this happen to Scotch? The entirely rational drive for greater efficiency and consistency may well have improved the average quality of blends – ‘pulled the bottom up’, in other words – but in the process, was something precious mislaid?
The chaos of distillery floor maltings, different strains of yeast and manual operation undoubtedly resulted in some pretty inconsistent spirit – but, when the whisky gods conspired, did that chaos also create lasting greatness?
And, if it did, how can we get it back?
02 November 2016
How much would you pay for a bottle of whisky? Nearly US$200 for a 16-year-old Longmorn? More than £7,000 for four single cask single malts from an independent bottler? How about £16,000 for a Black Bowmore 50 Year Old?
The fact of whisky price inflation has become as predictable as the outrage that greets it on the blogosphere. Assessing true value in this age of ‘whisky investment’ and flipping has never been more challenging.
But, rather than throw up your hands and mutter dark things about ‘capitalism gone crazy’, how about using a bit of old-fashioned common sense?
For two of these three launches – Golden Decanters and Black Bowmore – forget any noble notions of ‘pure’ value based simply on the quality of the liquid.
Releases at this level of the stratosphere are more bets on future monetary value than assessments of current worth; the trick for those selling them is to pitch them at a level low enough to attract buyers, but high enough to maximise returns – rather than seeing the same bottle sold on for twice the original price one month after release.
Getting this right is – to judge from these two examples – not easy. No quarrel with the Black Bowmore 50 Year Old release price of £16,000. Given that the 29-year-old 1st Edition is now offered at £12,000, it seems fair enough (if you’re really happy to spend more on a bottle of whisky than I’ve ever spent on a car).
Last in line: The final Black Bowmore bottling will set you back £16,000
But Golden Decanters? Four single cask single malts, including a Glenlivet 34-year-old, a Bowmore 26-year-old, an Auchentoshan 22-year-old and a Ben Nevis 19-year-old. You have to buy all four, and they’ll set you back £7,250.
Yes, the gorgeously tactile packaging from Scottish design studio Timorous Beasties more than lives up to its luxury brief. But the company’s claim that collectors are now ‘a little tired of tartan and twee’…?
Really? What tartan and twee? At this level of the market, bagpipers yielded the stage long ago to Lalique crystal and handmade oak. And anyway, Golden Decanters’ rejection of Scottish cliché might hold more weight if the company hadn’t identified its whiskies with, er, fishing, shooting, golf and Highland coos. Can the deep-fried Mars bar expression be far away?
Luxury look: But does that make Golden Decanters’ whiskies worth the money?
Single cask whiskies like these also involve more than the usual level of trust on the part of the purchaser. More than £7,000 for four malts is pushing it for an independent bottler with a long and distinguished reputation; for a debut range, it’s frankly astonishing.
However, I’m not remotely angry (unlike a number of people on the internet) about the Golden Decanters release – just utterly bemused by its wild optimism. If it works, and the whiskies sell, it’ll certainly tell us something about the current state of whisky collecting and investing.
But Longmorn? Pricing the 23-year-old north of US$1,000 is ambitious enough. But almost doubling the price of the entry-level (in age stated terms) 16-year-old single malt to US$189 on the pretext that it’s been ‘reinterpreted’ is breathtakingly cheeky. They might at least have had the decency to up it to an 18-year-old (after all, The Age Matters, doesn’t it?).
‘Breathtakingly cheeky’: Longmorn’s 16yo has nearly doubled in price
Rare whiskies aimed at collectors and investors are playing a different game to the Longmorns of this world. Succeed or fail, will Golden Decanters have any significant impact on the overall Scotch whisky market? I seriously doubt it.
But you can’t say the same about a more mainstream whisky such as Longmorn, and the range revamp reads like an exercise in market-led cynicism. Not so long ago, its 15-year-old bottling was replaced by the now ‘old’ 16yo, accompanied by howls of anguish on the internet about the concomitant price rise.
Now the price (but not the age) has gone up again, while the lower bracket has been filled by NAS expression Longmorn The Distiller’s Choice, introduced last January.
Price hikes and NAS whisky… There’s an awful lot of ill-judged, knee-jerk hysteria about both subjects on the internet, but on this occasion I have more than a little sympathy with it. Sometimes this industry does itself no favours at all.
30 September 2016
9.21pm, Wednesday, 21 September, One Marylebone, London; Diageo Special Releases tasting:
‘Have you done the maths?... I’m sure you have.’
The last question I was asked at Diageo’s Special Releases tasting was also the most perplexing (but, when you’ve just tasted 10 cask strength whiskies, perhaps that’s not surprising).
Had I done the maths? Well, I’d worked out that the nine age-stated whiskies among this year’s 10 Special Releases (barring Cragganmore) had a collective minimum age of 250 years-plus. Was that what my fellow taster meant?
‘No no no. The Port Ellen. Less than 3,000 bottles for £2,500 a pop. That’s nearly £7.5m!’
As Oscar Wilde once wrote, a cynic is a man who knows the price of everything and the value of nothing. So – for just a moment – let’s be cynical.
If we strip out Caol Ila and Lagavulin from this year’s Special Releases (unknown, but ‘limited’, quantities available), we have eight whiskies, 32,618 bottles, worth £22,551,020. Average price per bottle? £691.37.
Lucrative line-up: Secondary market trends have forced up Special Releases pricing
How did we get here? Simple. If you sell a product for a few hundred quid, then see the person who buys it flip it shortly afterwards for a few thousand, you might want to rethink your pricing strategy. This year’s Port Ellen takes a bit longer to sell out? So be it.
I get that. The confusion kicks in when I taste the whisky. Not because it’s bad. Not because it’s anything other than excellent, in fact. It is, indeed, special, in almost every case. But that beguiling Auchroisk 25-year-old that wouldn’t let me go? It’s £280 and it’s my bargain of the tasting. I still can’t afford it.
At the end of the room, the salivating masses jostling for a drop of the latest four-figure Brora and Port Ellen might have been queuing for a thimbleful of the latest en primeur Lafite or Latour.
And why shouldn’t it? If we can agree that the finest Scotch offers a transformative, transcendent sensory experience, why would the monetary value placed on it differ from fine wine, designer fashion, classic cars or luxury watches?
I left Brora and Port Ellen, and went back to the near-deserted Auchroisk table, and was happy. But it’s still £280, and I have a toddler, a house that needs work and a mortgage, so I’ll buy the Lagavulin – or, more likely, nothing at all.
11.58am, Tuesday, 20 September, The Union Club, Soho, London; White Horse retrospective tasting:
‘How good is that? Seriously, how good is that?’
Spirits entrepreneur Marcin Miller has the air of a proud father as he contemplates the glass in his hand. We’re not sure quite how old this whisky of his is, but best guess is it’s a pre-war bottling of White Horse. And it is, on its own terms, without even a thought of its age and provenance, stunning.
Tasting old bottlings is a hugely entertaining (when they’re not yours) game of Russian roulette. Of the six on show, three are at various stages of decrepitude thanks to closure imperfections; three, including this pre-war bottling, are simply beautiful.
Russian roulette: Tasting old bottlings is a fascinating and entertaining exercise
Their combined value, at current prices, is roughly equivalent to a bottle of the 2016 Special Release Brora. When they were purchased… Well, they were somewhat cheaper. And, even when they’re not perfect, they are huge fun to open.
So yes, I have done the maths. I loved the Special Releases, and it was a privilege to taste them, but that particular market has left me, and most people I know, behind. I’m a little sad about that, but not bitter or angry, because I’ve seen fine Bordeaux and Burgundy do the same in my lifetime, and these whiskies deserve that kind of billing.
And yes, I could go back again to that near-deserted Auchroisk table, and be happy. But: £280; toddler; house; mortgage. So I’ll buy some early 1980s White Horse instead. And be happier still.
26 July 2016
The best-selling whisky brand in the UK isn’t The Famous Grouse any more. It isn’t Bell’s, or Whyte and Mackay, or Grant’s. Instead, it’s that most American of drinks products, Jack Daniel’s of Lynchburg, Tennessee.
How should Scotch react to this? First of all, it’s important to remember that the figures released last week by The Grocer refer to value, not volume (Grouse still leads on that score, although possibly not for much longer). We’re also talking Nielsen statistics, which cover the supermarkets and other major retailers, but not pubs and bars.
And now we also discover – adding still further to the intrigue – that Jack’s figures also include sales of Jack Daniel’s Tennessee Honey, which is not a whiskey at all, but a honey liqueur ‘infused’ with the real thing. Oh, and also the brand’s RTD products, such as its cans of ready-mixed Jack Daniel’s and Cola.
Be that as it may, it’s clear from the comparative figures and anecdotal evidence that, while Jack is hot in the UK, blended Scotch – including its leading brand, Grouse – is most definitely not.
Given Scotch’s long-term overseas success story – only partly undermined by the last three years of export declines – do producers care that much about what happens in their own back yard? After all, Cognac exports 97.5% of its production, and you’d hardly say that Hennessy was on its knees.
Some coverage of the story extrapolated Jack’s success into a broader trend of American whiskey supplanting Scotch in the nation’s affections, arguing that consumers are turning their backs on the blends their fathers and grandfathers enjoyed in favour of a little Americana.
From Lynchburg with love: Jack Daniel’s sells more than 1m cases in the UK
There’s some truth in that, but let’s not get carried away. This is the story of one brand’s success, not that of an entire category: American whiskey sells more than 1.5m cases in the UK every year, but roughly three-quarters of that is Jack. Compare that to blended Scotch at about 5m cases, plus malts at approaching 1m cases, and the picture doesn’t look quite so bleak.
So everything’s all right, then? Not quite. Leaving aside the question of pride – that distillers would really like their fellow countrymen and women to drink more of their product – the UK is a large and dynamic market, in which any spirits category worth its salt would like to be doing considerably more business.
It also offers a microcosm of the malaise afflicting Scotch in a number of its more mature markets now (and especially in the US): the ‘malts are better than blends’ consumer mentality, a prejudice that Scotch producers did much to encourage, and which they are now belatedly trying to reverse.
But more specifically, it is Jack Daniel’s accomplishments which should be closely scrutinised. This is a whiskey that has long understood – and exploited – its essential DNA, mining a seam of retro-Americana and beneficial celebrity endorsements to create a brand with a broad demographic appeal.
Furthermore, having once recognised the power of that appeal, it has stayed true to its winning strategy, keeping its brand message clear and consistent. Young and old, male and female, whatever your socio-economic group – everyone, it seems, loves Jack.
Can any Scotch whisky brand operating in the UK today make a similar claim?
08 June 2016
In December 2005, when spirit first ran from the stills at Kilchoman, it became Islay’s eighth working distillery, and the first new one in about 120 years. Now there are plans, at various stages of development, for at least three more.
It’s a picture repeated across Scotland, around the world. We live in an era of whisky renaissance, where anyone with a dream and a beneficent investor can become a distiller. Exciting – but risky – times.
Anthony Wills had a dream when he drew up plans for Kilchoman soon after the millennium. Fast-forward to the distillery’s open day at this year’s Fèis Ìle, when long queues for the superb festival bottling snaked out of the shop and into the grounds, and you might think that the previous decade or so had been one long upward curve. Far from it.
‘I never imagined that within 10 years of starting this distillery we would be where we are now,’ an emotional Wills told a Fèis masterclass audience. ‘My dream was to start a distillery and put [the whisky] on the market at a relatively young age.’
Events conspired to fuel his early doubts. The need to raise more cash, the falling-out with the adjacent landowner, the fire that put the maltings out of commission for a year… The burst pipes, the temperamental boilers… Things go wrong at distilleries, particularly new distilleries, and they’re generally not cheap or easy to fix.
All valuable lessons for any wannabe whisky-maker. Wills has previously said that, if you think you need £5m in funding, you really need £10m. But things can go right, as well as wrong.
Uniquely Islay: Kilchoman has had its ups and downs over the past decade and more
Kilchoman bought the adjacent farm in November last year, ending those rows over the garden fence. Controlling the land means the business can plant more barley for its flagship 100% Islay product – 150 tons this year, up from 100 tons previously – and there are plans for a new malting floor and kiln to be operational by next spring. Total production will be close to 200,000 litres this year; in 2006, it was just 50,000 litres.
Through all of these ups and downs, the central message of the spirit – created and reinforced by Jim Swan and the late John MacLellan – has remained constant. Small stills, narrow neck to the spirit still, ploughing cash into cask sourcing and letting top-quality wood work its magic.
And it’s paid off. That exuberant young spirit has shaken off its puppy fat and become something richer and more complex, even in less than a decade: this year’s outstanding Fèis bottling is well under nine years old, and cask samples suggest it is no one-off.
That, in turn, has given Wills a dilemma: what to release and what to hold on to. ‘We will keep stock back for older bottlings,’ he promises. ‘That’s crucial to the long-term future of the distillery.’
That said, he doesn’t see Kilchoman releasing a 25- or 30-year-old bottling in the 2030s, reckoning that sweet, floral spirit will hit its peak somewhere between eight and 14 years. I’m not so sure he’s right, but it’ll be fun finding out.
Wills reckons he could write a book on what not to do when building a distillery which, by its nature, would also be a valuable guide on how to do it right. Part cautionary tale and part inspiration, the Kilchoman self-help manual ought be a best-seller among the emerging new generation of whisky-makers.
31 May 2016
Looking back on my first Fèis Ìle, I think two things in particular surprised me: the funnels; and the abundant sunshine. For anyone who visited the festival this year, the latter – barring one damp, midgy afternoon on Jura – needs no explanation. We’ll get to the funnels later.
Even Jura had its moment in the sun. The decision to split its distillery day in two paid off with a glorious Wednesday. Everywhere else, from the exuberant birthday celebrations at Lagavulin to the practically tropical Ardbeg Night shindig a week later, had no reason to complain. ‘You should have been here last year,’ said one veteran Fèisophile with a sad shake of the head. ‘Hideous. Absolutely hideous.’
Every distillery does it slightly differently during Fèis. As ever, there were queues, most notably at Bowmore, where the fervour to get hold of this year’s bottlings had the dizzy air of the January sales or the first day at Wimbledon. Manager David Turner left the distillery on Tuesday night at about 9.45pm, to be greeted by a dozen hardened Bowmore groupies, desperate to get their hands on one of the 200 Vintage Edition bottles the following morning.
Others played it differently; there were queues at Lagavulin and Kilchoman, sure, but there were also sufficient quantities of whisky available to satisfy everyone (I think). Ardbeg and Bunnahabhain put their Fèis bottlings up for sale on the Monday; Ardbeg’s and Jura’s will also be sold more widely afterwards.
There’s a debate to be had here: at one end of the spectrum, the desire to give festival-goers something special and exclusive – but what if you end up disappointing hundreds, who queue for hours only to come away with a bottling from the core range, a fridge magnet and a baseball cap?
On the other hand, why bother to come all the way to Islay to snag that Fèis bottling if you can order it off the internet a few days later? Somewhere between these two poles, a happy medium must exist.
Night and day: Ardbeg’s open day was perhaps the most inventive and original
There were one or two other gripes among the dedicated festival-goers. While some distilleries made a clear effort to innovate and offer new attractions and activities to keep things fresh for long-time visitors – Ardbeg being perhaps the most shining example – others stuck to the same formula as before. There’s a fine line between ‘tried and tested’ and tedium.
Contrast this feeling with the buzz surrounding this year’s Spirit of Speyside festival, where visitors were spoilt for choice, with hundreds more events taking place in a much shorter period than the Fèis. Is it just that more distilleries = greater competition = more creativity and dynamism?
Accommodation is another issue. Of course Ileach business owners want to make the most of their busiest week of the year, but when the punters decide that hiring a camper van is a cheaper and better option than taking a room, something’s gone slightly awry. Reports of vacancies and cancellations reinforce the point, as does the sight of mobile homes trying to edge past each other on the narrow roads to Kilchoman or Bunnahabhain.
At the end of what was almost entirely a joyous and sun-filled week, these might sound like ungracious quibbles, but an event like Fèis has to keep asking itself difficult and searching questions to become even better than before, and to keep those utterly passionate whisky nuts flocking to this small island from all over the world.
And the funnels? I first spotted them at Jura, then they resurfaced at Bunnahabhain when, as a masterclass concluded, the two people either side of me surreptitiously decanted the remains of their cask samples into sample bottles (always best to use a funnel when you’ve had a few drams), carefully inscribing them with a handy marker pen.
Beyond recalling Islay's proud smuggling heritage, it also prompted me to wonder what will become of these whiskies. Retasted later, at leisure? Or taken home to Germany, Finland and South Africa, to be squirrelled away and then dug out again at some future date – Islay malt's bootleg tapes?
Either way, it illustrates the kind of near-obsessive fascination that this annual whisky extravaganza inspires. Only at Fèis…
17 May 2016
We live in an age when every element of a brand’s image is constantly and painstakingly controlled, fine-tuned; this press release picked apart by an in-house committee of sceptics, that new label endlessly trialled in focus groups.
Each potential association or partnership is carefully vetted – will this project chime with our target consumer? Does that celebrity share our brand’s values and reinforce its core strengths?
But you can’t control everything. Take the case of the Russian doping scandal and Chivas Regal.
In a jaw-dropping New York Times article last week, former Russian anti-doping chief Grigory Rodchenkov lays bare the scale and sophistication of that country’s alleged doping programme, especially in the run-up to the 2014 Sochi Winter Olympics.
Years of planning, cloak-and-dagger stuff involving the FSB (successor to the KGB), swapping urine samples via a hole in the wall to ensure drugs cheats escaped detection. Russia finished top of the medals table. No athlete was caught.
Since named as the lynchpin in Russia’s allegedly state-sponsored doping programme, Rodchenkov was forced to resign and fled to Los Angeles (while two of his former colleagues died suddenly shortly afterwards in Russia).
Head start: Did Russia's athletes use drugs (and Chivas Regal) at the Sochi Winter Olympics? (Photo: kremlin.ru)
The intricacies of the Russian programme, he claims, took many years to perfect, particularly his favoured cocktail of performance-enhancing substances, which involved three anabolic steroids – metenolone, trenbolone and oxandrolone – designed to aid recovery and maintain peak performance.
But it’s the method of delivery that interests us: to accelerate the absorption of the substances and to reduce the window within which detection was possible, Rodchenkov dissolved the drugs in alcohol to a precise recipe – 1mg of steroid cocktail per 1ml of alcohol.
Given that this is Russia, you might have thought a patriotic shot of vodka would do the trick, but no… Chivas Regal Scotch whisky for the male athletes; Martini vermouth for the women. Discerning choices perhaps, but listen carefully and you can hear the heads of the respective brand managers hitting their desks.
Then again, come to think of it – a dram for the men and a nice glass of Martini for the ladies? I’m not sure what’s most shocking here – the allegations of a massive doping programme and cover-up… or the casually sexist way in which it was perpetrated.
04 May 2016
It’s fair to say that Vic Cameron’s article for this website – Does barley variety affect whisky flavour? – provoked a reaction. Thanks to the dubious pleasures of (anti-)social media, that reaction was not always either elegantly expressed, or free of personal prejudice against Vic, and/or the company (Diageo) for which he used to work.
For the record, I’ve no reason to doubt Vic’s credentials or his honesty. Of course, that doesn’t mean he’s right, either – so let’s have the debate, but let’s keep it civilised. That ok with everyone?
Anyway, it seemed somewhat serendipitous, given the subject matter of Vic’s piece and the affiliations of many of those who spoke out against it, that I should happen to be visiting Bruichladdich on Islay last week.
If ever there were a place to explore the counterpoint to the Cameron view, this was it. Bere barley, organic barley, Scottish barley, Islay barley… never mind fermentation times or cut points, the raw materials themselves are the hot topic here.
So did I discover an answer to the questions raised by Vic’s piece and the reaction it sparked? You’ll have to wait a few weeks to find out in more detail, but here’s a suitably ambiguous teaser: yes and no.
The discussion at Bruichladdich was not so much about barley variety as barley origin: isolating and making whisky from batches of the same strain, but grown in different locations. The Black Isle, Aberdeenshire, Lothian.
Nosing new-make spirit from all three, then cask samples of them after one year in first-fill Bourbon, one thing was clear: they were different. Not vastly different – I’ve had vodka flights with more diversity – but different nonetheless.
Enigma variations: Bruichladdich has distillates sourced from barley grown in different regions
That variation answers one question, but prompts others, and one in particular. Why are they different? Is it, to borrow a French winemaking term much used at Bruichladdich, down to terroir? Is it just because the growing season in 2015 (or 2016) was a bit wetter in, say, Lothian than in Aberdeenshire?
We’ll need years more of experimentation, data-gathering and careful analysis before we can even begin to identify the character of Black Isle barley versus Lothian barley (assuming that there is one), leave alone the impact this might have on your glass of Classic Laddie years after that barley has been harvested.
(And, as the chief engineer of this parish has noted, it’d be nice to see the spirit go into some refill, rather than first-fill, casks, minimising the wood influence and allowing the grain to speak more clearly over time.)
Anyway, it’s potentially ground-breaking stuff. Potentially. Crucially for Bruichladdich, it plays well to the company’s audience: literate whisky lovers with a more than passing interest in the way their spirit of choice is put together.
For these Laddie-ites, it’d be great if, years down the line, they could do a horizontal tasting of a flight of ‘regional’ 10-year-old Bruichladdichs, noting every nuance along the way. But, even if that isn’t to be, the journey promises to be fascinating and, if nothing else, they’ll have a bit more information about the origin of the whisky in their glass.
A bit more transparency, if you will.
03 March 2016
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.
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- Famous whisky drinkers: Dean Martin
- New whisky tasting notes: Batch 96
- World Whisky Day 2017 events
- Getting to grips with grain
Latest news 26 July 2016
Retail figures also include liqueur and RTD sales, blended Scotch brand The Famous Grouse claims.
Latest news 19 July 2016
The American whiskey has overtaken The Famous Grouse as the UK’s most lucrative whisky in retail.
From the editors 26 July 2016
Tennessee’s finest may be supplanting Scotch in British consumers’ affections. But does it matter?
Latest news 21 July 2016
Owner of BenRiach, GlenDronach and Glenglassaugh made reduced £7.3m profit in 2015, accounts show.