The history of American whiskey gives us great insight into what its future might look like. There have been tough times for American whiskey as a category, first in the form of unscrupulous business owners trying to pass-off fake whiskey as genuine before there were laws against such practices, then in the form of total Prohibition of spirits for over a decade, save for medicinal purposes.
There were two wars that took production away for the war effort to produce ethanol, at which point came several decades when vodka, wine and beer reigned supreme. Through this all the industry banded together and agreed upon things like advertising practices and just generally worked to keep the industry alive. Now thanks to tariffs and the trade war, the industry is once again under fire. What will the next year and beyond hold?
Recently Ken Lewis, co-founder of New Riff Distilling shared his predictions. There are a couple of things on which we both agree. First, the whiskey boom will continue thanks to efforts toward creating and promoting premium brands. That’s not to say there’s no market for value brands and shelf standards, many consumers need a lower point of entry to decide whether to try a brand’s premium product.
The second point is that single barrels will continue to be very popular. For Lewis, this will happen because they are perceived as special and it will tie into the localisation and personalisation trends. For me, however, this will continue because single barrels showcase the range of flavour profiles you can get from the same mash bill, made at the same distillery and stored in an identical location, in the same barrel. Even two barrels beside each other can be dramatically different.
I recently sampled four barrels made by Bourbon historian, Michael Veach and Jack Rose Whiskey Bar owner, Bill Thomas at Kentucky Artisan Distillery and even though they are all from the same batch and stored together in a warehouse, each one had different characteristics.
Lewis did have some predictions on which we differ significantly, however. While he sees the supply catching up to the demand soon, in part because of the tariffs, the Distilled Spirits Council of the United States is already working to open up new markets, of which there are still plenty. I see the industry working together even more diligently to solve the myriad problems being created by the current administration.
Historical precedent has shown the industry coming together to face challenges as a united and organised front and we’re already seeing this across the industry in response to potentially rising federal taxes.
There will be some challenges on the horizon for the entire distilled spirits industry in the United States, but already there are several examples of folks across the industry working together to address them. Parts of 2020 will be difficult, but the upward trajectory of American whiskey categories will continue.
Gavin D. Smith
It hardly takes a crystal ball to predict that ‘innovation’ will be a major feature of the Scotch whisky industry’s future. Where this innovation may differ from that generally seen in recent times is that it is highly likely to involve something of a ‘deconstruction’ of the whisky-making process, taking a fresh look at the basics.
For some years now, the Scotch whisky industry has not appeared interested in yeast as a potential flavour-contributor to its spirit. As a new generation of independent whisky-makers appear, focused on the importance of flavour differentiation rather than yield maximisation, yeast is one of the items that is being put under the microscope – quite literally – to explore how the use of different strains can potentially have an influence on ultimate spirit character.
Another variable in Scotch whisky production increasingly being explored is grain, with InchDairnie having produced rye whisky and even, in 2019, whisky from oats, the first time that oats have been used in Scotch whisky production for over a century. Bruichladdich has also tried its hand at rye, while Arbikie Distillery has already released a well-received limited-edition rye whisky.
The use of relatively low-yielding ‘heritage’ barley is also on the agenda, with Bruichladdich having bottled several iterations of single malt distilled from the ancient six-row ‘bere’ barley variety. Arran Distillery has released Orkney Bere Barley expressions.
Innovation is being driven by smaller, more flexible distillers and frequently, new entrants to the ranks of Scottish whisky-makers, so we should look out for interesting developments from Edinburgh’s new Holyrood Distillery and BrewDog’s Lone Wolf Distillery, too.
A few long-established, large-scale distilling companies have also decided that they should be seen to offer something outside the mainstream, with William Grant & Sons following its Experimental Series with Kininvie Works. Meanwhile, Whyte & Mackay’s recently-formed Whisky Works offshoot has launched a 29-years-old single grain whisky – probably from Port Dundas – and King of Trees, a Highland blended malt that has been part-finished in native Scottish oak.
Scottish distillers sometimes complain that official definitions of what can be marketed as ‘Scotch whisky’ are too restrictive, but 2019 saw a relaxation of legislation relating to cask types, meaning that Tequila cask-finished whiskies may well be on the market by the time this is published.
All very exciting, but remember that one of 2019s most dramatic whisky innovations was The Glenlivet’s edible whisky ‘pods’ – released for London Cocktail Week. Although intended as a bit of light-hearted fun for consenting adults over a very limited timespan, these pods led to social media outrage, and even the suggestion that under-18s would be likely to use them as suppositories.
So, innovation in the world of whisky can still meet with resistance, it seems. Talking of resistance, beware the current US craze of ‘hard seltzers.’ They sound as though they would be as serious a challenge as alcoholic suppositories.
I don’t think it really matters what I think, as Sam in TV show Cheers used to say , “This is just one guy’s opinion.” No, as I told fellow Whisky Magazine writer Greg Dillon, who’d gently teased me for opening this question up on Twitter, I’m more of a vox populi, vox Dei sort of guy.
On Twitter I heard from fans and industry veterans around the world, some who echoed my own views, some who challenged them. These are the key themes that came up.
Relaxation of rules leading to experimentation. There is a lot of positivity around new ways of working, and most would require a relaxation of the regulations, especially in Scotland. @MShilling’s response summed up the views of many, “More cross-distillery collaborations, higher quality ‘craft’ products, more experimentation with yeasts and non-traditional mashbills.” @CDNWhiskyDoc echoed much of this with, “Bigger bolder (peat or rye hybrids) and yeast becoming more important.”
@PotStillWhiskey felt it was more at the grain level with, “Experimental grains. Hopefully triticale in an Irish Pot Still mix.” There was a strong feeling that cask finishes were themselves finished in the next decade.
Looking more broadly, @scottcouper feels, “There’s going to be ever increasing attempts to capture a new generation of drinkers, resulting in types of innovation that will split the crowd” and supporting this, @Ryyyaaannn remarked at the reference to The Glenlivet’s famous/farcical whisky pod concept, “All whiskey will be consumed in pod form.”
Rise of the new world. Perhaps obvious, but worth noting, the ‘new’ distilleries will have, in the next 10 years, some finely aged stock ready to hit the market. They will have a choice of casks to blend into single malt, refining the taste of their output into something that should move them from being a promising oddity for whisky geeks, into something that your average whisky consumer might choose over Scotch. We’re already seeing a new generation of whisky drinkers that choose on taste and provenance, who don’t elevate a Scottish whisky above all else just because ‘one should’.
Still, with all this aged spirit dropping into the market at the same time, there is also a very serious issue brewing. Too much whisky. The last time this happened in the 80s, production outstripped demand and the bottom fell out of the market, marking the silencing of many famous distilleries. What would a modern flood do for business?
So is the next 10 years less rosy than we’d admit to ourselves? @TheRealTomLynch is frank with his vision, “A lot of bankrupt craft distilleries. Thousands of new ones built in the last 10 years, most nowhere near capacity and burdened with debt.”
Not everyone was so gloomy however, with @WhiskyRanker highlighting the positives for consumers, “I think the recent increase in production will catch up to demand causing a combo of falling prices, more mature whisky.”
So, the next 10 years might bring great collaborations, wild experiments and tasty mature, reasonably priced whisky, or it might be the end of things. With so many young people going teetotal maybe it will only be us left to sup the brown stuff, looked on by healthy Seedlip-swilling youths, like we might look on the last smoker on earth.
Most whisky companies have been hedging for various different Brexit scenarios for a couple of years now since it became clear that it was not going to be easy, or indeed fruitful, so I would not expect to see any supply or volume issues surrounding our favourite tipple – Lord knows we will need a dram or two to get through the fallout.
Without a doubt, we will see innovation in Scotch go from strength to strength; that’s actual innovation instead of the innovation with a small ‘i’ – no more ‘we’ve used a sherry cask you’ve probably not heard of before’, with more cask types entering the fray thanks to the updated Scotch rules handed down from the SWA.
For me, it is still quite a wonder why, despite being involved in the lobbying for the rules around the use of traditional maturation cask types to be relaxed, Diageo – pertinently Johnnie Walker – has not released a plethora of different limited edition releases finished in Tequila casks, Baiju casks and whatever else they would have almost certainly been experimenting with in the warehouses… I would assume that the timing was not right given the Game of Thrones limited-edition schedule and associated marketing and media campaigns and budgets would already have been set. Who knows, but I would expect there to be some interesting cask finishes we have not seen before entering the Johnnie Walker travel-retail and limited-edition ranges, as well as their single malts too.
In Irish whiskey I think there will be a coming of age from a few of the newer distilleries as they settle on their house style and distillery character.
That will arguably be the most exciting area of the whisky world for me in the next year, as Irish is yet to have its day, and with Method and Madness, along with the extensions to the Jameson Caskmates range and even the gentle broadening of the Midleton range too, Irish Distillers are certainly playing their cards against what they feel will be strong competitors, such as Teeling, Dingle and the JJ. Corey bottlers going forward.
During the next 10 years? The above, but amplified! Traditional whisky markets like Scotch whisky will increase their presence and share in emerging powerhouses with money like China and Southeast Asia.
Then there will also be a very strong global whisky market potentially catching the traditionals by surprise with the quality, dexterity and flavour of the blends and single malts that can be made in India, Austria, Tasmania, Canada and many more – some already produce awesome whisky and whiskey, but do not have the trade deals in place to get distribution and liquor to lips… Maybe that will be a positive result from Brexit?! Probably not…
A big issue in the year ahead will be sustainability and green credentials. While in the past activity such as heat-recovery, efficiency, and environmental impact assessments were found solely in the realm of distilleries’ corporate communications, we’ve begun to see these topics being ‘PR-ified’ and drift into brands’ consumer messaging. Glengoyne has become well known for its use of reed beds to filter outgoing water, Glenmorangie made headlines with their oyster-bed regeneration project in the Dornoch Firth, and Tamdhu’s fish pass rectified a century-old blockage in its adjacent burn.
The uptick in interest in organic barley use by brands such as Deanston, Nc’Nean, Bruichladdich and Benromach indicates that consumers have an appetite for expressions with green credentials and Edrington’s new internal ‘sustainability committee’ shows that big players see the issue as internally critical at all levels of the business, not just marketing fluff.
If Old Pulteney’s recently launched ‘Rise With The Tide’ campaign, which features Blue Planet cameraman Doug Allan and focuses on the need to protect our oceans, is anything to go by, we can expect brands to launch more serious global sustainability-focused campaigns in 2020.
Perhaps less likely, but still altogether possible, is that a brand will take another stab at a bit of ‘brand activism’. That is to say, getting behind a political or social movement. Although Diageo’s Jane Walker release, timed to celebrate International Women’s day 2018, went down like a lead balloon, outside of Scotch many brands have successfully implemented campaigns that have revolutionised consumer perception of its core values. Nike’s campaign with former American football player Colin Kaepernick has been hailed a great success, while, closer to the category, Absolut’s ‘Kiss With Pride’ edition shows that brands that pin their values to the mast can do very well out of it.
Another developing theme is the gradual ‘boutique-ification’ of whisky retail, as evidenced by the opening of the flagship Johnnie Walker store in Madrid and the high-end Macallan store in Dubai Airport. This is mirrored by the gradual transformation of many domestic whisky shops, especially those in Asia, into boutiques that are more evocative of luxury jewellers than off-licenses. No doubt we’ll see this theme develop further in 2020.
Last but not least, we’re guaranteed to see more unusual wood finishes hitting the shelves in the year ahead. Though some will have been enabled by the recent update to the EU Technical File for Scotch Whisky, we likely won’t feel the full effects of that rule change until 2021–22.
Instead, I predict more releases drawing on links to other super-premium categories such as Champagne, still wine (with named vineyards becoming more common), and especially Cognac. We’ll perhaps even see the first releases of whiskies matured in ‘chinkapin oak’ Quercus Muehlenbergii, aka Chestnut oak, which I have spotted in the warehouses of at least three producers.
Whatever comes to fruition in the next 12 months, it’s certainly going to keep our minds occupied and glasses full.
As the global economy steers towards trading restrictions and mounting debts, expect a toughening of conditions to affect our industry as protectionist tariffs and eroding consumer confidence could precipitate an economic contraction.
These are already bellwethers destabilising the industry. The two largest whisky producers, Scotland and the US, with nearly 75 per cent of world production, are facing increasing headwinds. The recent US tariff wars have exposed export vulnerabilities. Most dramatically a major sales slump hit the Bourbon industry in Europe.
Over the first year of EU tariffs, sales fell by 21 per cent, June 2018 to June 2019. Brexit will likely inflict more uncertainty and pain in the Scotch industry. How much pain is anyone’s guess as it could set off a round of punitive tariffs or unfavourable trading terms such as the US’s bilateral lobbying to remove minimum age statements. Opportunities in greenfield BRIC markets are also susceptible to the vagaries of politics, trade and also economics.
On the plus side, whisky remains a globally fashionable spirit. In mature markets, positive demographic shifts from Baby Boomer longevity to the rising cohort of entry-level Millennial cocktail drinkers are lifting whisky sales. The increasing penetration and consumption by female drinkers is another growth market. Global mega-trends such as premiumisation continue to push value growth, but volume cracks are appearing on country-by-country analysis.
Spirit industry analysts are forecasting whisky’s global consumption will grow to average around five per cent CAGR over the next few years; assuming no major consumer shock or black swan event like a threat to Saudi oil supply at the time of writing.
Add the commissioning of large new distilleries, major plant upgrades and over two thousand new craft distilleries during the past decade, annual production volumes have increased to historically unprecedented levels. Pundits predict this is unsustainable, hastening an inflexion point which will open a delta between supply and demand.
This watershed moment could be caused by an economic contraction, triggering the whisky bubble to deflate – when and by how much and over what period are the unknowns. Then we could again hear the 1980s sales mantra ‘stack ‘em high and let ‘em fly’. Remembering a distillery can only keep whisky in cask for so long before risking over-extraction and spoilage.
The imperative will be to move excess stock through retail channels and push consumer sales by deeper discounting. What is good news for whisky buyers is bad news for shareholders and distillery margins.
Craft producers with less than one per cent of global whisky sales are the most vulnerable with higher price points, limited distribution and minimal cost efficiencies in manufacturing and marketing expenses. In the event of industry oversupply, they have little or no leeway to manoeuvre as prices fall and retail retreats.
If the global economy starts to shrink in 2020 batten down the hatches, otherwise, it’s business as usual with continuing headwinds with plenty of good whiskies entering the market.
Some conspiracy theories need to die, such as the one that has look-a-like William Campbell replacing Paul McCartney after his late 1960s death. Or Microsoft covertly financing microwave mind-control experiments. In the whisky world, it’s the decade-long plot to keep Canadian whisky in its place – a conspiracy with truth.
For the past decade, each time the category has shown signs of rebounding, greenhorn whisky snobbery drags it back down.
So, peering into a second-hand crystal ball that I found in a bin outside a permanently closed Psychic, I’ll predict what the 2020s have in store. And what do I see? A reprise of the Roaring Twenties and the death of the conspiracy against Canadian whisky.
But first, where did this conspiracy come from? It seems whenever Canadian whisky breaks new ground, some deep state whisky ‘expert’ with a clear bias for other categories shouts that Canadian base whisky is neutral grain spirit or brown vodka. You can spot them easily with their t-shirt proclaiming, “Whisky N’ Guns Are For Shootin!” In 2020, if they taste these flavourful base whiskies and stands by those words, I predict a tongue transplant for the poor soul.
A few Canadian blenders will take the first step in 2020 to silence that loathing by using tolerant regulations for good instead of evil. They will fight back, not by pointing fingers in a Coke vs Pepsi whisky war but by leading by example with flavour-driven whisky.
Ages ago, French chef, Auguste Escoffier introduced Hollandaise sauce to the world. Then, horror of horrors, another innovative chef added herbs to the sauce and called it Béarnaise. True, operatives with tinfoil lined chef hats took to wearing butter stained “Herbs N’ Swords Are For Dicing!” t-shirts. Still, Béarnaise blasphemy never fuelled a significant scandal like today’s social media-driven culture would. The 20s will see Canadian whisky makers channel those classic recipes to spark real innovation.
At first, a small group of blenders will use low doses of expensive oak-aged spirits blended into their whisky to enhance the tasting experience exactly as so-called ‘finishing’ does.
That craze will shift into the country tapping into the endless list of unconventional wood cask types, avantgarde infusions and unexplored wood stave treatments.
The possibilities for Canada whisky will be enduring like branching from a mother sauce. Throw in Canada’s mushrooming microdistillery scene where new whiskies will hit their stride, and there will be a flood of mouth-watering variety.
But my prediction that the Canadian Whisky Conspiracy will die at the hands of people who enjoy whisky for its flavour won’t happen unless we taste with an open mind and not gospelise the neophyte’s negativity. Listen to each whisky maker’s story and not the outraged influencer who hates everything unless it’s a bottle that flies their flag.
I hope these predictions are right and the crystal ball I gazed into is genuine instead of some child’s lost bouncy ball.
But here it is: The Canadian whisky conspiracy will be extinct by 2029, and when that day arrives, I will legally change my name to The Great Whiskyistic! (You are all witnesses to this, make a note in your diaries - ED.)
Many new kids on the whisky block do not shy away from experimenting with our beloved drink. Flavoured whiskies for instance are bon-ton nowadays, but we may wonder whether these new expressions are to be called whisky.
I don’t mind people trying to develop new drinks based upon existing ones. If that was not allowed, we’d never have blended whisky; we would not have had cocktails either and that would be a shame. The same goes for exotic wood finishes. One country welcomes innovation more than the other and national watchdogs may slow down the pace of it. I expect that the SWA will come with a sharpened set of rules regarding ‘what is whisky’.
Maybe we will see a distinction between ‘traditional whisky’ and ‘whisky-based beverages’ at some time. Harking back to the old days of whisky distilling, all kinds of additives were added to make the distillate potable and nobody seemed to fuss about some honey or spices in their drink of pride. So, what is new in the end? Or, will it end at all?
The incredible growth of, mostly small-scale, distilleries makes me wonder too. This cannot continue.
As soon as the gin craze is over, consolidation will start, if it hasn’t started already. Look at the Grants of Glenfiddich, who purchased tiny Hudson Bourbon some years ago. Recently the Laings have acquired Strathearn. Apparently these larger companies know how to cherry pick in that new pool. However, not all these small players are attractive to the big players and when it comes to market share and shelf space, the former simply cannot compete with the latter. Within the next few years we will probably see a shake out where ‘sell or die’ may be the adage for a while.
Living partly in the Netherlands I monitor the festivals in this part of the world more closely than elsewhere and noticed that the large importers and producers are slowly but deliberately withdrawing from the scene. The old style whisky festival seems to have run its course. Spearheaded by the many whisky clubs in the country, more and more consumers choose to organise happenings themselves, invite brand ambassadors, often with the help of a local whisky specialty shop. I also see smaller collectors getting in, pouring their coveted bottles at top prices per dram.
Importers watch consumers spending lots of money on obscure bottlings, of which it is too often not entirely clear if the company that presents itself as the bottler, actually is. Mostly these are merchants or smalltime importers, who get their product via a whisky broker in Scotland, have it bottled there and then import it or have that done by a third party. Various big importers do not appreciate this and that may be one of the reasons they withdraw from the large festivals. Another argument is product position. What is more effective? Be one among many or have a captive audience for your own brands in a dedicated master class? After all, the proof of the whisky is in the drinking.
Davin de Kergommeaux
With nearly every major Canadian whisky brand present at a recent industry gathering, Canadian Club found itself in an exclusive gang. It was the only brand still represented by at least some of the team who were there a decade earlier.
In the past 10 years staff have turned over like barley on a malting floor. At the same time, major new forces within the industry have changed not just the world’s perception of Canadian whisky, but Canada’s own pride in what has become a global phenomenon. However, the industry risks losing this momentum as the loss of corporate memory leads decision makers to neglect core brands and focus on trends and the whims of outspoken but novice influencers.
Two hundred small distilleries established since 2010 will continue to dominate media coverage, bringing considerable positive attention to Canada’s distilling industry as a whole. Those microdistillers that follow well-researched business plans will thrive. However, as microdistilling matures in Canada, there will also be a shake-out of others who take production shortcuts and bend rules.
While everyone waits on tenterhooks for legalised cannabis to take the edge off whisky’s market, another threat lurks in wait. A massive campaign has succeeded in eliminating plastic straws from cocktails. Will whisky be the next target? Once climate crisis campaigners realise that fermentation creates equal amounts of carbon dioxide – a greenhouse gas – as it does alcohol, they are sure to seize on it like they did cow’s passing gas. Distilleries that voluntarily capture and recycle carbon dioxide, as some large brewers already do, will get the jump on the inevitable green legislation requiring them to do so. However, the costs will be prohibitive for smaller distillers.
Taxes make up more than 80 per cent of the price of a bottle of whisky in Canada, which limits the funds available for investment. A new regulation requires that excise taxes keep pace with the cost of living. The multinational conglomerates that own Canada’s major distilleries report to shareholders and so will direct investment capital for upgrading, expansion and innovation to Scotland, Ireland, the US and Asia where the return on investment is higher. Couple this with a political decision in Canada’s largest spirits market, Ontario, to sell beer and wine, but not spirits in grocery stores and the next decade will almost certainly see the loss of at least one major distillery as convenience sales move to the grocer.
So, the 2020s will be a blended bag for Canadian whisky. Rising popularity among connoisseurs sees growth at the high-end but neglect of bread-and-butter brands. A shake-out in the microdistillery segment foretells renewed interest and innovation. Canadian whisky will certainly still be here in 2030, but it will be a decade of upheaval with no guarantees of which distilleries and brands will thrive and which simply survive.