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Blended Scotch Whiskies Struggle As Market Shifts To Single Malts

October 12, 2018

While it’s been a difficult stretch for some of the larger blended Scotch whisky brands in recent years, the overall Scotch category has carved out solid gains in value terms lately, driven by consumer thirst for upscale bottlings, especially in the rising single malt segment. According to Impact Databank, global Scotch volume rose 1.5% to 85.3 million cases last year. While volume growth has been sluggish—with the category roughly flat over the past five years—export value rose 9% to £4.4 billion ($5.8b) in 2017. That performance capped a run from 2010-2017 in which Scotch shipments jumped by a sum of more than £900 million ($1.18b).

Export growth continues to ramp up on a per-case basis, particularly in the U.S., where per-case value has leapt by 64% since 2010, reaching £92.98 ($121.91) in 2017. Total Scotch depletions in the U.S. slipped 3.1% to 7.6 million cases last year, and are down by around a half-million cases since 2005. Yet the Scotch category continues to show sterling value progress, largely due to the rising share of single malts.

In the U.S., market leader Johnnie Walker continues to grow at a low-single-digit pace, advancing by 1.3% to nearly 1.8 million cases last year, with expressions like Black Label and Blue Label performing particularly well. Portfoliomate Buchanan’s also saw U.S. growth in 2017, up 3.1% to 502,000 cases. Recently, Diageo has supported Buchanan’s with an advertising push and a new blended malt whisky, Buchanan’s Select 15-year-old, retailing at $50. “Buchanan’s is a very significant brand in Latin America, and its U.S. demographics are of course favorable, with the Latin American cohort driving growth,” says Diageo North America president Deirdre Mahlan.

Chivas Regal was down nearly 10% to 304,000 cases in the U.S. last year, continuing its long-term trend. Lately the Pernod Ricard brand has attempted to draw attention to higher-end blended malts with its Ultis bottling. The $200 whisky launched in 2016, and consists of a blend of Speyside malts. Pernod Ricard has been putting more focus on single malt portfoliomate The Glenlivet, which has expanded by more than one-third in the U.S. since 2010. Over the same timeframe, Chivas has declined by 24%.

Dewar’s, part of the Bacardi portfolio, also declined last year, and could slip below 1 million cases this year for the first time in decades if current trends hold. Like Pernod, Bacardi has lately been emphasizing its single malt range, which includes Aberfeldy, The Aultmore, Deveron, Craigellachie, and Royal Brackla.

Other blended Scotch brands like the Famous Grouse, J&B, and Cutty Sark also declined by single digits in the U.S. last year. Edrington recently put Cutty Sark on the selling block, preferring to increase focus on its core single malt brands like The Macallan and Highland Park.—Shane English

U.S. – Top 10 Scotch Whisky Brands
(thousands of 9-liter cases)
Rank Brand Importer 2016 2017 Percent
Change1
1 Johnnie Walker Diageo North America 1,766 1,790 1.3%
2 House of Dewar’s Bacardi USA 1,209 1,016 -16.0%
3 Buchanan’s Diageo North America 487 502 3.1%
4 The Glenlivet Pernod Ricard USA 414 419 1.2%
5 Clan MacGregor William Grant & Sons USA 438 405 -7.6%
6 Chivas Regal Pernod Ricard USA 337 304 -9.8%
7 The Macallan Edrington Americas 234 250 6.6%
8 Glenfiddich William Grant & Sons USA 178 201 12.8%
9 Inver House Sazerac Co 170 160 -6.0%
10 The Famous Grouse Edrington Americas 160 148 -7.0%
Total Top 102 5,394 5,195 -3.7%
Total Scotch Whisky 7,805 7,560 -3.1%
1 Based on unrounded data
2 Addition of columns may not agree due to roundingSource: IMPACT DATABANK
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