Whiskey assets have become a prominent topic of discussion among both journalists and investment experts. Prices have surged in recent years, showing no signs of slowing down. With over 9 million whiskey consumers in the UK alone and continued growth anticipated, it seems another decade of remarkable performance lies ahead. However, accessing this market can be challenging for investors due to the intricate networks needed to acquire top-quality casks. ITW has a stellar reputation in portfolio selection, asset management, and client care, making us your ideal partner in navigating this thriving market.
WHISKEY SUPPLY VS DEMAND: A PERFECT IMBALANCE
The Scotch single malt industry has a history dating back further than income tax. Initially, the market was predominantly domestic, with the UK boasting a smaller population and limited affordability among drinkers. However, times have changed.
Today, Scotch single malt has evolved into a global phenomenon, deeply ingrained in societies worldwide. Recent statistics reveal that whisky now surpasses Tequila sales in Mexico and Cognac consumption in France. Despite a 60% increase in production over the past decade, Scotland annually produces only approximately 800 million liters of whisky, with a mere 40 million liters retained as single malt. This quantity seems minuscule compared to the 500 million whiskey consumers worldwide, resulting in a stark oversupply of Scotch single malt, creating a perfectly inverse supply/demand imbalance.
The export value of Scotch whiskey in 2019 illustrated a clear upward trajectory in demand, with export levels surging by 4.4% (£208 million) compared to 2018, setting new records. This trend continued as bottle exports reached 1.31 billion, marking a 2.4% increase from the previous year. Today, Scotch Whiskey constitutes over 20% of all UK food and drink exports and is distributed in approximately 180 global markets.
While the USA remains the largest export destination for Scotch Whiskey by value (£1,069 million), India is emerging as a significant market player. Despite a hefty 150% customs duty on imported whiskey, India now ranks as the second-largest export destination for Scotch Whisky by volume, with 131 million bottles sold, marking a 16.1% increase from 2018. The ISWAI (International Spirits and Wine Association of India) anticipates potential reductions in customs duties, paving the way for even greater volumes of Scotch Whisky to enter the Indian market.
With demand for Scotch single malt reaching unprecedented levels and supply nearing its peak, it's evident to us that prices are poised to rise.