The whisky world has been looking east over the past year or so to a market that has bounced back quickly and strongly from the COVID-19 pandemic thanks to strenuous efforts to contain the virus in early 2021.
The wider Asia-Pacific whisky market was worth £1.36 billion in 2021 and is expected to hit £1.77 billion by 2025 with a CAGR of 5.25% (Market Data Forecast). Focusing in on Scotch in particular, exports have skyrocketed
from £10 million in 2000 to £89 million in 2019.
South Korea is tipped for significant growth according to the Fact MR report with growth of 16% by value and 22% by volume from 2015 to 2020. Total whisky revenue for 2021 in South Korea is estimated at $234 million by Statista with a CAGR of 7.13% for 2021 to 2025.
According to research by the IWSR, Scotch is a key player in the South Korean whisky market. US Whiskey currently has a very modest market share along with Japanese and Irish whiskey.
According to the Hurun Research Institute’s China HNWIs Whiskey Consumption Behavior Report, whisky is the third most popular alcoholic beverage among Chinese people. Unlike other markets, Chinese consumers are embracing premium whiskies with 30% of buyers willing to spend over 1,000 RMB or approximately £115 on a bottle.
This growing appetite for premium whisky is closely related to the rapid expansion of middle-class households in China and in the wider Asia-Pacific region. According to a study by McKinsey & Company, 76% of the Chinese population is projected to achieve a salary equivalent to US$34,000 by 2022. This threshold indicates a middle-class lifestyle and level of disposable income. This is especially remarkable when you consider that just 4% of the population met this criteria in 2000!
The Hurun report notes that interest is particularly strong amongst the young and wealthy who are curious about Western culture and open to trying new things. Brands have moved swiftly to respond to China’s changing demographics; earlier this year Diageo debuted their Johnnie Walker Blue Label Forbidden City Edition as well as a limited edition Chinese New Year bottle celebrating the Year of the Ox which quickly sold out.
The growing appetite for premium whisky in the wider Asia-Pacific region is good news for investors, unlocking greater opportunities for secondary market growth especially for big name distilleries like The Macallan.