The Global Outlook for Whiskies

September 2019

Whiskies has been a standout category within spirits around the world in recent years, with the still-dominant Scotch category increasingly sharing the spotlight with the vibrant and growing American, Irish and Japanese whiskies. Rising incomes in key markets and strong premiumisation trends should keep category growth strong in the years to come, although there are also threats looming in the form of mindful drinking trends, innovation in rival categories and trade disputes.

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Key Findings

Whiskies is one of the best performing categories in global spirits

Global demand for whiskies rose at an average of 2% annually over 2013-2018, cutting across all major whisky categories, as well as all geographical regions. Growth was even stronger in value terms, a sign of the success of premiumisation trends pushing consumers in the direction of value-added products.

A handful of key markets dominate global sales

The major current consumers of whiskies, notably India, Japan and the US, are still growing strongly, and will remain the critical components of the global market. A handful of well-established European markets, like France, are showing weakness but this has been compensated for by surging growth in developing markets like Mexico, Russia and Turkey.

Economic growth is the most important driver

Overall, the single largest factor behind whisky growth is rising incomes, especially in the developing world. Growth is coming primarily from the two largest categories of whiskies – blended Scotch and locally-produced Indian whiskies – both of which are reliant on developing world consumers for rising consumption.

Scotch whisky remains the most important category but new geographies are rising

Scotches, especially blended ones, are the core of the category in most of the world. This will remain the case, but the growth rates of Scotches have fallen behind American, Irish and Japanese products. The global outlook is increasingly fragmented as a result, as non-Scotches rise in importance.

Major challenges facing the category include mindful drinking trends and political issues

Despite the overall good news for global whiskies, there remain challenges ahead. In the short term, macroeconomic and political troubles will be the most important issue for the category, especially a wave of new trade barriers in the EU and US. In the longer term, declining drinking rates among young people pose the most important threat to consumption of whiskies.

Scope
Key findings
Whisky is one of the strongest performing types of spirit
Map: s oftness in some large markets but strong growth in emerging ones
The key markets will remain the same in the coming years
Share gains in the key markets apart from Western Europe
Map: gains and losses against other spirits categories
Rising incomes are the most important driver of category growth
Map: the most important growth drivers by market
Key trends in whiskies around the world in 2019
Challenges and opportunities by category (1)
Challenges and opportunities by category (2)
A diversifying picture in global whiskies
Blended scotch continues to grow as an aspirational beverage
Single malt scotch remains the global standard for quality
Single grain whisky struggles to go mainstream
Slow but respectable growth for Canadian whisky
Supply shortages in Japanese will force creativity
Upwards and outwards for US whiskies
The Irish whiskey renaissance continues
High quality whisky can now come from almost anywhere
An emerging world of whisky
Final thoughts: the changing role of geography
Diageo loses share but remains on top
Map: the global competitive landscape of whisky
Pernod and Suntory likely to gain further on Diageo
Major challenges and opportunities facing whiskies in the years ahead
Premiumisation in all categories but at different rates
Trade barriers are inhibiting the expansion of some categories
Looming macroeconomic threats could dent whisky sales
Younger generations are looking to cut down on alcohol
Possible responses for whiskies in a time of mindful drinking
The green spectre: the effect of cannabis
Molecular whisky could disrupt the entire industry one day

Spirits

This is the aggregation of whisk(e)y, brandy and Cognac, white spirits, rum, tequila, liqueurs and other spirits.

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