SCOTCH WHISKY

Great Scotch!

Brydie Allen looks into the current state of the Scotch whisky market in Australia, and how to make to most of it coming into a peak season for the category.

Each second, 44 bottles of Scotch whisky are shipped from Scotland to around 180 markets across the world, according to the Scotch Whisky Association.

That equates to 1.3 billion bottles each year, which, when laid end to end, would almost reach the moon. In short, that illustrates a huge global demand for Scotch whisky.

Australia is of course no exception – Scotch is well known as a glowing category that continues to perform well in the offpremise market.

There are several reasons that the category has sustained itself so well for so long on our shores, according to Oliver Maruda, CEO of The Whisky List which distributes Scotch brands such as Bunnahabhain and Ledaig.

“Scotch whisky is and continues to be the most sought-after type amongst whisk(e)y drinks in Australia,” he said.

Glendronach Distillery

“[This is due to a] combination of great price, brand presence, availability across all retailers from major chains to small indie bottle shops, ambassadorship and education, great support from head offices back in Scotland, plus presence in bars and online tastings, and whisky festivals like The Whisky Show.”

Through this visibility and support from so many angles, Scotch has been able to develop with the times to appeal to a wider audience for more occasions. The category has shown, time and again, that it’s not just for older men to sip neat in darkened dens, but for everyone at any time.

Kristie Asciak, Marketing Manager for one of the world’s biggest whisk(e)y producers, William Grant & Sons, said this expansion of occasion has had quite the impact on the category. The company has noticed this via its classic Scotch brands such as Glenfiddich.

“Scotch used to be about quiet fire-side sips. We’re now seeing it move into higher energy, more sociable occasions,” she said.

“Scotch whisky and continues to be the most sought-after type amongst whisk(e)y drinks in Australia.”

Oliver Maruda, Co-founder and CEO The Whisky List

“Most brands in the category are pushing an agenda to break down whisky traditions and promoting Scotch cocktails. So retailers should remember that there’s more than one reason a shopper might like to buy a Scotch… or more reasons for a shopper to buy more Scotch!”

Stewart Buchanan, Global Brand Ambassador for Brown-Forman’s iconic Scotch brands Benriach, Glendronach and Glenglassaugh, said Scotch is on an unprecedented journey of growth, but still isn’t close to its ceiling.

“Everybody has expected a flattening or lull, but I think we’re riding a wave that we’ve never seen before in the industry and I personally don’t see it stopping,” Buchanan said.

“At a global scale, we’ve not scratched the surface for a lot of whisky consumers across the world.”

Home base for premium dark spirits

From its highlands to its coasts, Scotland is a truly unique place. And there’s a simple reason that the Scots have been distilling since as early as the 15th century– they’re bloody good at it.

It’s the best of the best end of Scotch whisky that is a key factor for its growth and performance in recent years, as more people choose to ‘drink less but better.’

This is noted by Andy Milne, Portfolio Manager at SouthTrade International, which features Scotch brands like an Cnoc and Old Pulteney.

“Scotch continues to grow steadily across Australia, growing four per centMAT and five per cent on the QTR (AusProjected Retail, 9LE FBS Volume IRIData to 17/07/22). Bourbon is declining slightly MAT at negative one percent, driven primarily by the mainstream and value sector, showing that people are seeking premium quality spirits.”

Ben Inglis, Head of Sales at SpiritsPlatform (which distributes Scotches including Bruichladdich and TheMacallan), believes this trend will continue, noting: “Within the Scotch whisky category, we will see the more premium brands grow in value over volume and the mainstream brands to continue to suffer small declines.

“The largest jump in Scotch whisky is the over $100 per bottle single malt section, with enormous growth in volume and value.”

Asciak said alignment to this premium trend is what is helping Scotch differentiate itself in the market. It’s building more mainstream recognition for the differences between its styles and how consumers can trade up without moving categories.

“Scotch plays perfectly into the broader trend of premiumisation – buy less but better. There’s not many other kinds of whisk(e)y that have the same age and price ladder indicating quality and step-up options,” Asciak said.

One key point that drives consumers understanding the benefits of premium Scotch is enhanced opportunity for trial. As Maruda explains, “the growing number of opportunities to try single malts, be it online at virtual tastings or in person at whisky festivals, is increasing,” leading to a higher uptake of the premiumisation trend.

Influences on Scotch shoppers

When shoppers head in-store looking to buy a whisky, Asciak notes that “recall and recognition can’t be stressed enough.”

High upon that list of influences that will make a consumer choose Scotch whisky is them remembering a reason to buy it, whether that be an impactful advertisement, or a core element of a brand or the category itself.

For Inglis, its important that these core elements are in line with what consumers are looking for across a number of spirit categories right now.

“[When it comes to Scotch], the influencing factors for shoppers are the quality of the liquid, the value for the prestige they are paying for, and the story it tells,” Inglis said.

Milne also believes this is top of mind for consumers as they navigate the Scotch category.

“History and provenance have a huge influence when it comes to selecting a Scotch. Consumers are seeking authenticity, a distillery that is honouring the craft that has been passed down over decades or even centuries,” he said.

Benriach Distillery

When comparing Australian Scotch shoppers to the rest of the world, Buchanan said our consumers are very well educated about all of this, but are still happy to explore. He attributes this to the rise of Australian whisky – through being exposed to this more, consumers are developing their palates and exploring the wide world of spirits both near and far.

“What I see in Australia is the knowledge and passion behind the consumer… I think that makes them more adventurous and a discoverer of what’s on the shelf,” Buchanan said.

Keeping consumers engaged

Tradition and history hold great value in the Scotch market – it’s obviously something that cannot be rushed, due to the ageing time required to make Scotch.

The Scotch Whisky Association estimates that some 22 million casks of whisky lie maturing in warehouses across Scotland, just waiting to be discovered and enjoyed. An industry doesn’t sit on that much stock without a good reason, understanding the value of waiting.

Glendronach Distillery

But, as previously noted, this heritage doesn’t stall innovation. which has helped the category stay relevant and keep consumers engaged as tastes and interests change.

One change that Milne has seen over time is how Scotch distilleries are using whiskies without an age statement. It’s an example of an innovation that consumers are embracing, showing they are open and interested in change, when it’s for the better.

“There was a time where NAS (nonage statement) whiskies were seen as poor quality - a way for distilleries to release younger whisky that maybe wasn’t of the highest quality that consumers had come to expect from that brand,” Milne said.

“This has definitely changed, as distilleries continue to push the bounds of quality whiskies, using different practices such as peated whisky casks or interesting wine casks, but also blending young and old whiskies together, balancing the merits of both whiskies together to create a greater sum of its part.”

Today, many Scotch whisky connoisseurs don’t enjoy the category on their own, and are brought together in communities both online and in the physical world to discuss whisky. Even with friends who have less experience in whisky, these drinkers are seeking new innovations and something interesting to explore with their communities.

Asciak said: “A number of more experienced whisky shoppers look for innovations or dinner table conversation – something unique that they can share to surprise their friends and demonstrate their expertise in the category.”

It’s these communities and connections about whisky that are not only keeping consumers engaged with Scotch, but also bringing new consumers into the category, according to Buchanan, who saw impressive results from this particularly in the pandemic.

“Throughout lockdown periods, we’ve gained more followers than ever in single malts, perhaps due to online activations people came to naturally over the last two years. People who were intimidated to go to live tastings in person felt more comfortable to approach a single malt tasting from their homes,” Buchanan said.

“I think that’s been a great win for single malts, to remove that fear factor and intimidation, because that can be quite scary… people can now be more relaxed and able to enjoy single malts in their own time, however they like.”

The season for Scotch

Christmas is a key moment for many categories, including Scotch, thanks to its strong appeal for gifting and its current wide-ranging demographic. With this season just around the corner, it’s an important time to be making the most of Scotch in-store.

For Milne, a diverse range of Scotch on the shelf at this time of year will help take the category to the next level.

Bunnahabhain Distillery

“Consumers are seeking something different, especially when gifting. Look to the smaller distilleries from Scotland rather than the big names - it will make the recipient feel that extra bit special knowing that you’ve gone the extra mile to seek out something special just for them,” he said.

Asciak noted a need to go back to basics, and said: “In-store it’s about ease of shopping, so clear category indicators like shelf visibility of the market leaders can help convert consumers.

“Give the category the shelf space this high demand, high value product deserves, and educate yourself so you can speak confidently to your shoppers to sell them the right expression or trade them up through your range when they are ready.”

As with anything on the shelf, being highly educated on the Scotch category will certainly make a positive difference when you are trying to sell (or upsell) a customer. Maruda said consumers will often be browsing without a lot of confidence in specifically what they should be looking for, and retailers can be their lifeline to making informed purchasing decisions.

“My biggest tip is to focus on education, and the uniqueness of each product and/or distillery. With so much choice available, consumers often reach decision paralysis, so being able to offer advice and that unique point of difference, be it a recommendation based on what they previously like to drink, or even quick facts about said whisky/distillery, or tasting notes, go a long way to helping get over that final hurdle to choose to purchase,” Maruda said.

“We often see customer confusion about marketing terms and industry jargon, like Scotch, whisky, cask finishing, non-chill filtering, etc… Being able to help clarify what that industry jargon is, i.e. ‘Scotch is a type of whisky, but not all whisky is Scotch’, goes a long way.

“Consumers are looking for premium, high quality products and if you can help them build up their knowledge, that in turn comes back to you in trust gained, and hopefully more sales.”

When it comes to educating consumers in this way, Inglis advised to lean into whatScotch can offer. Often the story is a key selling point for where a product gets its point of difference, and this isn’t something to be afraid of bringing in-store.

Inglis said: “Be brave in opening up your selection, if you are brave enough to learn and talk about them. Consumers are craving to be told a story about a whisky they can share with their friends. Whisky has a romance to brand like no other category.”

Finally, Buchanan’s advice is to lead these educational discussions, first and foremost, by talking about flavour.

“The first question I ask the consumer is ‘what are your favourite flavours?’ If I get an idea of what their palate is like, I can guide them to a whisky on the shelf [that will suitthem],” he said.

“It’s a good way to help people understand whisky, and that it’s not just a ‘whisky taste’, and you can get apples, pears, pineapple, chocolate, orange…the education of the retailer to guide the consumer through these flavours is very important.”

The Irish whiskey element

Scotch whisky’s lively cousin to the west, Irish whiskey, is seeing performance and a market development of a similar kind.

Speaking of the wider whisky category's performance overall, Nicole Moore, Marketing and innovation Manager APAC for GapDrinks, said: “Japanese and Irish whiskies grew strongly last year, as did local craft albeit from a smaller base, as more engaged consumers come into the whisk(e)y category looking to discover something new and experiment with.

“Irish whiskey saw double-digit growth in most price bands, the Dubliner brand seeing some of the strongest growth last year +45 per cent(IWSR Australia 2022), off the back of successful global pack relaunch.”

The Dubliner brand is also looking to broaden the appeal of Irish whiskey and help consumers see the category more approachable. Earlier this year, it launched a new SKU –Dubliner Fiery Irish – a spicy cinnamon and chilli flavoured whiskey designed to be a bold, accessible and delicious exploration into what Irish whiskey can do.

“There’s no doubt that Aussies are growing in their love of these types of products, with imported spirits and liqueurs expected to account for 30 per cent of domestic demand in Australia in 2022 (Ibis World, April 2022). And as Aussies continue to experiment with home bartending and new flavours, we are excited to broaden the Dubliner range and bring this innovation to our shores,” said Moore.

Scotch Spotlight: anCnoc Peatheart

The old traditions of Scotch whisky were centred around being peated, and although many modern producers have moved away from this, Knockdhu Distillery recognised the importance of paying homage to your roots, creating heavily peated spirit, anCnoc.

Batch two of anCnoc Peatheartcaptures the essence of Scotland’srich and remote peatlands. On the nose, an initial smoky burst surrenders to a surge of fruitiness, and on the palate, this smoke is laced with leather and sweet stewed apples. Chocolate on the palate is perfectly complemented by sweet vanilla and zesty lemon, finishing with a lingering warmth and floral smokiness.

Through its range, anCnoc seeks to maintain a strong presence in the sector by educating consumers about peat through showing different PPM(phenol parts per million) levels in oneach pack. It also illustrates that not all peat is the same – mainland peat like that of anCnoc is much softer with an almost sweeter essence, standing apart from the intensity of Islam peat with its ashy, briny and wood smoked style.

Scotch Spotlight: Old Pulteney Huddart

Defined and shaped by its stunning coastal location, Old Pulteney SingleMalt Scotch Whisky owes much to its hometown of Wick. Old Pulteney has a strong place in the heart and history of this coastal community, having been established in 1826 at a time when the town was home to a thriving fishing port.

Old Pulteney’s distinctive flavour is crafted thanks to its distillation and maturation by the sea, coupled with meticulous cask selection. It’s a truly unique single malt Scotch whisky that captures the taste of these in every drop of its liquid gold, taking drinkers on a journey from vibrancy to indulgence.

Rich and warming aromas on the nose of Old Pulteney Huddart giveaway to freshly ground spices and soft vanilla on the palate, balanced with the central notes of woodsmoke and peat fire. Richly sweet and distinctly coastal chords in the background are reminiscent of salted caramel.