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Single Malt’s Leading Players Investing For The Future

October 10, 2022

After a strong rebound from the pandemic and much needed tariff relief last year, single malt Scotch whisky is in range of reaching the 2-million-case mark in the U.S. this year, where it accounts for about one-quarter of all Scotch whisky volume, according to Impact Databank. Along with much of the spirits market, the single malt category is now running up against tough comps and a tightening economic outlook, with total volume down 7.5% in control states year-to-date through August, but it may still reach 2 million cases with help from the buoyant on-premise segment. Key single malt players are continuing to invest aggressively, betting that the category’s long-term upswing will continue even amid an uncertain economy.

Diageo has identified single malt as an area where it intends to ramp up its efforts moving forward. “On Scotch, historically, we’ve always underperformed in malts in market share, which has always been my biggest frustration for a company that owns these 28—soon to be 30—beautiful distilleries all around Scotland. We were spoiled for choice, and we’ve been seeing what’s changed in the last three years,” Ivan Menezes, Diageo’s chief executive, told analysts recently. “We now have a very focused long-term strategy on malts. So Singleton is a major play for us going at, let’s say, the more mainstream malts. We’re very clear on Talisker where we want to build it. Mortlach at the high end. Mortlach is a jewel and it’s going to be a long play. It’s going to be 10 years but I’m really encouraged with what we’ll see there.”

Earlier this year, Pernod Ricard’s Chivas Brothers arm announced that it was investing £88 million ($100.5 million) into two of its single malt distilleries, Aberlour and Miltonduff. The expansion will bring the company’s total production to 14 million liters per year, as well as make sustainability-focused improvements toward reaching net-zero distillation by 2026. “This expansion will allow us to increase our volume to capitalize on the increased demand and interest in Scotch, but also supports our drive to reduce emissions in line with our sustainability ambitions,” said Jean-Etienne Gourgues, chairman and CEO of Chivas Brothers. “We’re once again betting big on the future of Scotch so we can bring in new consumers to the category and continue to shape a sustainable future of whisky.”

Moët Hennessy is also investing to attract new consumers for its Glenmorangie and Ardbeg malts. The luxury giant has debuted new packaging for Glenmorangie’s core lineup—the 10-year-old Original, the 12-year-old La Santa, and the 14-year-old Quinta Ruban—with the core whiskies now featuring orange, red, and green labels and boxes. “Our whisky is truly delicious and our reimagined packaging brings its flavors to the fore. We see this as an opportunity to welcome new drinkers with a playful elegance which reflects our creativity in whisky making, and to ensure our single malt stands out by using bold colors and enhanced branding,” said Louise Dennett, Glenmorangie global head of brand.

Brown-Forman recently announced a $30.5 million investment in the GlenDronach distillery in Scotland. The investment will go to bolster production and storage capacities, and follows the 2020 redesign of the Highland single malt distiller’s visitor center. The project will take roughly three years and will double distilling capacity as well as improve energy efficiencies. Along with GlenDronach, Brown-Forman’s single malt Scotch portfolio includes fellow Highland malt Glenglassaugh and Speyside malt BenRiach.

Meanwhile, William Grant is targeting the online segment, teaming up with e-commerce facilitator Thristie to launch dedicated online stores for Glenfiddich and the Balvenie (Brown-Forman recently did the same for BenRiach). Consumers are able to order whiskies directly through the websites and orders are fulfilled by partnered liquor stores in the buyer’s area. The move was concurrent with the introduction of a new addition to Glenfiddich’s core whiskies, a 12-year-old single malt finished in Sherry casks. The 43% abv whisky is rolling out in limited markets at first, hitting shelves in California and Florida for a suggested price of $55 a bottle.

At Edrington, where the portfolio is centered on malts like The Macallan, Highland Park, and Glenrothes, the company boosted brand reinvestment by 46% in the year through March to £171 million ($183m). Among The Macallan’s recent initiatives is the debut of The Macallan M Collection, a new line of limited edition whiskies celebrating its Six Pillars concept, representing the fundamentals behind the brand.

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