While the world stayed at home last year, alcohol markets performed extremely well. But now that the containment measures are mostly over, normalcy should prevail, right? Not, it seems, for the rich.
“Spirits are on fire right now. They’re really growing from the premium to the prestige segment of the industry,” says Kieran Healey-Ryder, head of Whiskey Discovery at The Dalmore distillery in Scotland.
The premium market starts at $100 a bottle and the prestige at $1,000, which gives you a rough idea of who is buying spirits right now. But many of today’s buyers go even further.
In June, for example, Sotheby’s sold 24 bottles of China’s famous Kweichow Moutai liqueur for $1.4 million, breaking previous records for the spirit. It “totally and completely changed the market,” says Healey-Ryder. Next month, Sotheby’s will auction The Dalmore Decades, a selection of six single malt whiskeys from six decades.
Records are set in all areas, but mainly in Asia. China is a rapidly growing market for all spirits, but Scotch whiskey is the main one. France and Taiwan are the biggest markets for Scotch, “but China and America are right behind them,” says Healey-Ryder. And it’s the Chinese that whiskey distillers are watching closely.
“There’s a generational shift. The younger generation is starting to learn about whiskey,” says Thorsten Hartmann, director of the IWSR, which tracks the global beverage industry. “These are emerging consumers who are starting to fall in love with whiskey. They may not have been exposed in the past, but they definitely are now.”
At a recent Sotheby’s auction of rare whiskeys and spirits, 80% of buyers were Asian and 60% were under 40 years old.
“There are guys in Asia who have really raised the bar for whiskey tastings and tickets to those tastings sometimes cost tens of thousands of dollars and they open all kinds of bottles,” says Jonny Fowle, senior whiskey specialist. spirits at Sotheby’s. . “It’s pretty regular for people to open bottles up to $50,000 and up per bottle.”
Like wine tastings before them, expensive whiskey is sought after both to drink and to show off. “There’s definitely an element to conspicuous consumption, showing off your wealth,” Hartmann says.
This is the complete opposite of what has happened in Western markets over the past year. The lockdown has driven the whiskey market in the UK and US crazy as wealthy connoisseurs, consoling themselves or just bored at home, have started drinking their rare whiskey collections like never before. Of course, they then had to put them back together.
While this brutal consumption may have slowed, the market has not. Investors are realizing that if more young, wealthy Asians discover a love for whisky, the market will only grow further.
“We’re still in the early days of the single malt renaissance,” says Healey-Ryder, referring to the market for single-origin whiskeys rather than blends. Whether or not it is your choice, the market is also open to outside investors.
For around £3,000 ($4,122) you can buy a cask (barrel) of Scotch whiskey as an investment. “Given current growth rates, you should be able to turn a profit immediately,” says Jonathan Hook, founder of MacInnes Whisky, a whiskey investment firm. “But after you hit the 15-year mark, the gains go up a bit.”
The idea of buying a keg rather than a bottle is becoming more and more common. “If you bottle a wine, it appreciates. With whiskey, once you take it out of a cask and put it in a bottle, overall the flavor doesn’t improve” , explains Hook.
But when it’s time to bottle, you can either sell the whole cask or bottle it and sell it instead.
That’s not to say the price of bottles isn’t going up either. Whiskey houses have recently commissioned artists and architects to decorate limited-edition bottles.
Architect Sir David Adjaye has designed a decanter and case for the oldest single malt Scotch whiskey ever bottled, an 80-year-old Glenlivet. These bottles are due to be auctioned off at Sotheby’s in London next month.
But the main reason for the increase in the whiskey market is that people continue to drink it. As long as this continues, says Hartmann, there will be a growing market: “Consumption is a very important part of whiskey collecting that we need to spread so we can grow the market.”