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Single Malt Scotch Volumes Continue To Soar Even As Retail Prices Surge

October 9, 2013

After years of minimal increases at best, single malt Scotch prices are headed higher—in many cases sharply so. But shoppers don’t seem to mind. The category’s U.S. volume jumped 7% last year, with leading brands like Glenmorangie (+29.6%), The Glenlivet (+9.1%), The Macallan (+8.9%) and Glenfiddich (+7.5%), all enjoying robust gains.

Many 12-year-old single malt Scotch brands have now broken through key retail price points of $39.99 and $49.99 a 750-ml. for the first time—with little impact on volumes thus far. After several years at $49.99 in most markets, The Macallan 12-year-old has risen closer to $53 and $55 over the past year. The Macallan Sherry Oak 18-year-old was at $169 two years ago, and now it’s cresting $200.

“It’s hard to find a bottle of The Macallan 12-year-old at less than $50 anymore in New York City,” says Jim Brennan, vice president at Rémy Cointreau USA. “We’ve been nudging prices up. Sophisticated consumers aren’t thinking about a couple of bucks here and there. The $49.99 price-point is something the trade thinks is more important than the public does. Higher prices have everything to do with higher demand for the liquid.”

At Pernod Ricard USA, marketer of top-selling single malt brand The Glenlivet, vice president Wayne Hartunian notes that prices are rising fastest on older labels. The Glenlivet 15-year-old had been retailing at around $51, and it recently jumped to $53. The Glenlivet 21-year-old, which retailed at $140 a year ago, has since increased to $154. Another Pernod brand, The Aberlour 12-year-old, saw its price rise to $47 this year from $41 a year ago. “Aberlour’s organic growth has been very strong,” Hartunian explains. “We simply believed that it deserved to be in that price range.”

At the very top, the price increases have been even more dramatic. In 2011, William Grant & Sons USA was fetching $16,000 a 750-ml. for its rare Glenfiddich 50-year-old. Its retail price escalated to $23,000 in 2012, and then hit $27,000 this year. Glenfiddich’s overall volume was up nearly 8% in the U.S. last year despite retail price hikes across most of the portfolio. Glenfiddich 18-year-old, for example, has jumped from $90 to $100, and the 21-year-old has risen from $150 to $180.

Like most retailers, Brent Barnett, general manager of McScrooge’s Wines and Spirits in Knoxville, Tennessee, which stocks 425 single malt SKUs, has been amazed at single malt’s price increases. His price on The Macallan 18-year-old has risen from $160 last year to $225 today. The Macallan 25-year-old is now at $800—up from $225 a decade ago. The Balvenie 12-year-old has jumped from $49.99 to $59.99 in the past year. “I’ve been able to keep The Macallan 12-year-old at $49.99, but only by increasing the quantity I buy from my wholesaler and shortening my margins,” Barnett explains.

 

USA – Top Four Single-Malt Scotch Whisky Brands
(thousands of nine-liter case depletions)
Percent Market Share*
Rank Brand Importer 2011 2012 Change 2011 2012
1 The Glenlivet Pernod Ricard USA 331 361 9.1% 30.8% 31.4%
2 The Macallan Remy-Cointreau USA 146 159 8.9% 13.6% 13.8%
3 Glenfiddich William Grant & Sons USA 120 129 7.5% 11.2% 11.2%
4 Glenmorangie Moet-Hennessy USA (LVMH) 71 92 29.6% 6.6% 8.0%
Total Top Four 668 741 10.9% 62.1% 64.4%
Other Brands 407 409 0.5% 37.9% 35.6%
Total Single-Malt 1,075 1,150 7.0% 100.0% 100.0%
* addition of shares may not agree due to rounding

Source: IMPACT DATABANK

 

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