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Japanese Whisky Demand Soars In U.S., Straining Supply

November 1, 2016

As brown spirits of all kinds continue to boom, Japanese whisky is quickly gaining traction in the U.S., putting pressure on producers to ramp up their output.The category expanded by more than 65% to 67,000 cases last year, according to Impact Databank, and leading distillers tell SND they’re struggling to keep pace with demand.

“We’re producing at full capacity, and we’re making expansion investments, but until they’re complete we don’t really have the capability to expand production as we should,” says Naoki Tomoyoshi, international business development representative for Nikka Whisky. “No one was really interested in our whiskies five years ago, and five years is not enough time to age and blend our whiskies.”

Handled by Anchor Distilling Company in the U.S., the Nikka Whisky Distilling Co. portfolio is led by its Coffey Grain expression ($70 a 750-ml.), which accounts for around 55% of the brand’s U.S. sales. The Nikka lineup also includes Taketsuru Pure Malt ($70) and Coffey Malt ($75), as well as newcomers Yoichi Single Malt and Miyagikyo Single Malt ($80). The latter two offerings launched in September and are designed to tap the U.S. market’s growing interest in single malt whiskies. Overall, Nikka more than doubled in the U.S. last year to roughly 20,000 cases.

Category leader Beam Suntory is also fighting production constraints. Its lineup comprises Yamazaki, which includes 12-year-old ($85 a 750-ml.), 18-year-old ($250) and 25-year-old ($1,600) single malts; Hakushu, which offers 12-year-old ($85) and 18-year-old single malts ($250); and blended range Hibiki, which has a 12-year-old ($65), 17-year-old ($150), 21-year-old ($250) and Harmony ($65). This summer, Suntory extended with Suntory Whisky Toki ($40), a blend of whiskies from the Hakushu, Yamazaki and Chita distilleries, which is positioned to draw consumers from the Bourbon, Scotch, Canadian and Irish whisk(e)y categories.

“Demand for Japanese whisky continues to grow, (even as) many distillers struggle to maintain sufficient supply,” notes Maya Rubalcaba, senior brand manager, U.S. for Beam Suntory Scotch and Japanese whisky. “We’re able to meet this demand by continuing to release a range of offerings, including limited edition expressions, and new blended innovations such as Suntory Whisky Toki and Hibiki Japanese Harmony, which consist of a wide range of aged single malt and grain liquids.”

Last year, the Hibiki range was up more than 160% to 17,100 cases in the U.S., according to Impact Databank. Yamazaki slipped 3% to just over 10,000 cases, but that decline was offset by Hakushu, which posted a 126% gain to nearly 7,000 cases. “Since 2013, Japanese whisky in the U.S. has grown by 577% in dollar sales and by 508% in volume,” adds Rubalcaba, citing Nielsen data. “It’s undeniable that Japanese whisky is hot now.” —Christina Jelski

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