In this whisky market update, we take a look at the key trends that characterised the first half of 2021, and what investors can expect from the rest of the year.
American Single Malts
Single malt whiskies have been a mainstay of the whisky world for decades, yet in one of the world’s largest whisky markets there is still no legal definition for “single malt” whisky. Now, the Treasury Department’s Alcohol and Tobacco Tax & Trade Bureau has taken the first baby step in the process of creating a legal standard for “American Single Malt” whisky. This new category could help create a better-defined premium category for American whisky and help consumers differentiate in a crowded domestic market.
China’s Continued Growth
According to Euromonitor International figures, value sales of whisky in China are predicted to reach about £2.2 billion by 2022. As China’s interest in whisky continues, Valentine International have hit the headlines for their involvement in a venture to ship an entire whisky distillery from Scotland to inner Mongolia China. More than 35 tonnes of equipment, including stills, flooring, control valves and pipework, is leaving Buckie in Moray for the port of Tianjin.
The equipment will be assembled at a facility being built in Inner Mongolia, and is part of a £3m “design and build” deal signed between Forfar firm Valentine International and China’s Mengtai Group in 2019. Valentine International has also signed a “strategic agreement” with Mengtai to supply bulk whiskies for China, although as yet they have declined to name the whisky distiller in that deal beyond indicating it is a “long-established” firm.
Unscrupulous Whisky Investment Firms
A report from The Times in July 2021 has highlighted the increasing trend of unscrupulous investment companies offering “guaranteed” returns that were many multiples of potential profits on other luxury investments. The Scotch Whisky Association is quoted as saying that it was concerned that unchecked growth of the cask market worldwide would lead to more of these companies and damage the industry as a whole. According to industry figures, purchases of casks grew 14 per cent last year alone. Genuine investment companies, distilleries and industry bodies are keen to distance themselves from any rogue operators.
Bourbon Hits New Heights
Bourbon has also been making headlines with the sale of a barrel of 10 Year Kentucky Straight from Michter’s Distillery in Louisville for £166,000. “This is the highest price ever paid at an auction for a single barrel of Bourbon anywhere in the world, far exceeding previous records,” according to Justin Sloan, cofounder of Justins’ House of Bourbon. The sale took place at a charity auction in London held for the benefit of hospitality professionals affected by the COVID-19 pandemic.
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