For many years, Scotch Whisky seemed to be just an old white man's drink as other more modern beverages such as tequila, gin, bitter aperitif and other spirits took over the market. But now, Scotch whisky and its relatives from other countries are enjoying a comeback.
The global whiskey market has been relatively stable at USD 80 billion over the past decade, but is expected to exceed USD 100 billion by 2024, according to consumer data firm Statista.
This can be attributed to several facts.
First of all, the industry recovered from the negative impact of the Covid-19 pandemic and import bans for Scotch Whiskey to the U.S. stemming from retaliating tax burdens in the Trump era have been lifted.
But even more importantly, whisk(e)y producers have launched new innovative products. The Scotch Whisky Association (SWA) issued an amendment to the Scotch Whisky Technical File in 2019 that allowed producers a wider variety of casks for maturation, including ex-Tequila and Calvados casks. The new rule allowed leading spirits producers like Diageo Plc and Pernod Ricard SA to age their whiskies in barrels that formerly held tequila, rum or craft beer and blending them with notes of agave, molasses and other aromas. In addition those companies launched lighter varieties with reduced alcohol. This move attracted consumers who had never tried traditional forms of Scotch before.
Global exports of Scotch Whisky grew to GBP 4.51bn during 2021, according to figures released today by the SWA. Growth in 2021 was driven in particular by consumers in Asia Pacific and Latin America, with value increases of 21% and 71% respectively. Key emerging markets for Scotch Whisky - like India, Brazil, and China - grew strongly. Exports grew by 8% in the United States – the industry largest market by value – despite the first quarter of 2021 impacted by the 25% tariff on Single Malt Scotch Whisky. Exports to the European Union grew by 8% in the first year since the UK left the transition period.
But the revival is not only limited to Scotch Whisky. Irish Whiskey is also recovering after decades of decline. From just four operational distilleries in 2010, there are now 42 on the island of Ireland. Annual global sales have increased from 5 million cases (60 million bottles) in 2010 to 14 million cases (168 million bottles) last year, fueled by new offerings and younger drinkers.
Especially the U.S. market is promising for Irish Whiskey. In 2021, more than 5.9 million 9-liter cases of Irish Whiskey were sold in the United States, 334% up from 10 years before, generating USD 1.3 billion in revenues for distillers.
Other countries with a major whisky production are also experiencing surging sales.
India, the largest consumer of whisky in the world, about three times higher than the second largest consumer, the US, reached a volume of 1.35 billion liters in 2020. From 2022 to 2027, the market is projected to grow at a CAGR of 17% and reach 2.82 billion liters by 2026 predicts expertmarketresearch (EMR). The vast majority of Indian “whisky” is molasses-based, owing in large part to a reluctance to use grain in the production of alcohol, meaning that this liquor is much closer to rum than traditional whisky.
Japanese brands have also exploded in popularity, raking in USD 340 million in sales last year.