DEWAR'S UNIQUE HISTORY

THE DEWAR SAGA

             ANOTHER GROCER TO WHISKY MAGNATE

John Dewar (1805-1880) a humble crofter and the seventh of nine children, was employed in 1828 in a wine merchant's shop owned by his stepmother’s relation, Alex MacDonald. Nine years later he was made a partner in the firm, renamed MacDonald & Dewar. In 1846, this partnership was dissolved and John became a spirits and wine merchant on his own.

The catalyst for change was Jane Gow, whom he married in 1845 and produced 10 children with. John’s aim was to get the Scottish to drink Scotch, not French Cognac and the vastly successful whiskies from the mammoth Irish whisky industry, as was the custom. John’s company, Dewar’s, didn’t own its own distillery, it simply used stocks purchased from others to make its blends, a skill he was amply endowed with. The continuing success they enjoy is detailed at this link.

In 1879, John’s second eldest son, John Alexander Dewar, joined the firm. His father died the next year leaving behind ten children and an estate valued at £34,796, some £2 million in today’s money. So, it fell to John Alexander and his younger brother Thomas Robert (Tommy) to maintain the family’s business. Not only did they ensure it survived, but they also succeeded in building a global brand. Little did they realise how successful their brand would become, a name for quality and consistency.

In the 1890s, the Dewars decided to go into whisky production and built a distillery at Aberfeldy, only two miles from where their father had been born. The site had originally been a brewery and some distillation had taken place in the early part of the century. Fed by the Pitilie Burn [where gold is still panned] Aberfeldy became the malt at the heart of the firm’s blends. A private railway line linked the plant with the firm’s operational hub in Perth. Of the two brothers, John Alexander was the sensible one. He managed Aberfeldy Distillery, which would come to be the heart of the Dewar’s blend, maintained his father’s business with meticulous care and took over responsibility for blending. But it was Tommy whose brilliant marketing captured the public’s imagination, driving sales of their whisky. He was a maverick, a traveller, a raconteur and an all-around bon viveur.     

The tenacious Tommy slipped into London as a 21–year–old in 1885, armed with two sales leads, one of whom proved bankrupt and the other dead. Rather than take the train home, Tommy stayed and for two years, working on building contacts, relationships and spreading the word about Dewar’s blends. He would go into pubs that he’d targeted because they didn’t currently sell Dewar’s whisky and ask for it. Then two days later he would send a salesman in to push the landlord into ordering that whisky.

By 1890, Dewar’s was the sole supplier for Spiers & Pond restaurants, a major account which controlled then-important London pubs such as The Angel and The Elephant & Castle. He brought three more brothers into the business and changed the company name to John Dewar and Sons in 1981. Soon, the company received a letter from the renowned American industrialist Andrew Carnegie, requesting that they send a small cask of their best Scottish whisky to his friend, promising that he would pick up the bill. The delivery address was: “The PRESIDENT, The Honorable Benjamin Harrison, Executive Mansion, Washington D.C., U.S.A.”

Being sent Scotch whisky resulted in bad press for President Harrison, who was criticised for drinking Scotch rather than American-made bourbon, but it proved a major publicity coup for Dewar’s and orders started flooding in from America. Spurred on by this boost in trade, Tommy quit London, instead opting for the life of a travelling salesman.

Departing on his first world trip in 1892, Tommy visited 26 countries in just two years, famously stating that “many a false step is taken by standing still”. While travelling he appointed a 32-strong global sales force, the sales from which drove the company’s value to £625,000 – the equivalent of some £48 million today. Upon returning he published a book “A Ramble Round the Globe” to critical acclaim.

Meanwhile, his brother John secured a Royal Warrant in 1893 from Queen Victoria, the first blended whisky to do so. John Dewar & Sons has enjoyed royal patronage ever since – only interrupted when the crown passed to Edward VIII, who was on the throne for such a brief time that he didn’t renew or award any warrants. Dewar’s is the only whisky brand able to claim patronage from every monarch since Victoria.

Things continued to go well for the brothers, who won plaudits and titles in recognition of their success. John was made Treasurer of the city of Perth by 1885 and Lord Provost in 1893, while Tommy, who had recently purchased the third-ever motor car in Britain, became High Sheriff of London in 1897. It was around this time that John decided to build Aberfeldy Distillery near where their father had been born in Perthshire.

Prior to this, the company, which also boasted a master blender, Alexander Cameron, and included a P. M. Dewar (no relation) on staff, had been largely reliant on Tulliemet Distillery [also known as Auchnagie Distillery, closed in 1912]. It had a small production line, capable of churning out 24,000 gallons annually, which very quickly became inadequate. But being able to call itself both a blender and a distiller was an important mark of standing and in 1898 John Dewar & Sons was a stronger company with the completion of its Aberfeldy Distillery.

On the completion of Aberfeldy in 1989, Tommy took off on a second world tour, embarking on the first of what would be many incredibly successful advertising campaigns. The slogan he introduced, ‘Whisky of his Forefathers’, served the company right up until 1970.

However, 1898 marked a terrible year for the Scotch whisky industry. The rogue brothers, Pattisons of Leith, crashed, taking with it nine companies and several smaller suppliers, not to mention Scotch whisky’s good name. This was compounded by the Boer War which followed a year later, eliminating Dewar’s loyal South African market for a time. These crises did not dent the Dewar brothers' ambitions and in 1899 they launched White Label, a product that quickly became its best-selling whisky. The turn of the century saw Dewar’s fortunes continue to rise with sales reaching one million gallons and new offices in Sydney, Melbourne, Calcutta and Johannesburg following the end of the Boer War in 1902. King Edward VII knighted Tommy, the same honour he had bestowed on his older brother John five years earlier.

In the early years of the 20th century, Tommy again applied his marketing genius by commissioning the Edison Company in New York to create one of the world’s first moving picture commercials – the first for a drinks brand. Notwithstanding this innovative advertising, Tommy maintained, “the quality of the product is its greatest advertisement.”

The budget spent on advertising reached nearly a fifth of the company’s total profits – though this reflected a wider industry trend. Before Pattisons folded it had been the trailblazer for Scotch whisky advertising, in one stunt giving out 500 African Grey parrots to licensed grocers, all of which reportedly could chant “buy 'Pattisons’ Whisky."

Tommy came up with similar hare-brained schemes, some utterly brilliant and others at best showing his artistic flair. One such idea was a bicycle tyre tread that spelt out ‘Dewar’s Whisky’ in the tracks it left. He relentlessly branded anything and everything from ashtrays, mirrors, silver toothpicks and letter openers to calendars, counter bells and bowls. One of his unusual tricks was to throw messages in bottles overboard while travelling, inviting whoever found them to contact Dewar’s for a whisky reward. “Keep advertising and advertising will keep you,” is one of Tommy’s most quoted phrases

It was clear by 1908 that overproduction was stifling the whisky industry and then in April 1909 Lloyd George’s budget raised taxes on spirits by a third. It only took one year for the full effects to be felt: spirit consumption plummeted, falling by one-third across the UK. Thankfully, John Dewar & Sons was cushioned by its export market, buoyed by its receiving two new warrants from the Swedish and German royal households.

Just before things boiled over completely in Europe, Dewar’s, and in particular Tommy Dewar, was up to his old advertising tricks. Using an old tower near London’s Waterloo Bridge - in 1911, Tommy commissioned an advertisement made of 1,400 light bulbs and six miles of electric cable to create the image of a Scotsman, complete with a bottle of whisky and glass, pouring himself a drink and toasting passers-by as his kilt swayed in the breeze.

War broke out in 1914 and the whisky industry was on rations as grain was needed for food. Only months before, Dewar’s had provisionally signed papers with James Buchanan & Co for a ‘correlation of interests’ and their merger was announced in March 1915. The new company, at first called Scotch Whisky Brands Ltd and then renamed Buchanan-Dewar Ltd, was forced to stop distilling due to the war in early 1917.

Disaster struck again almost as soon as Dewar’s restarted distilling after the war in March 1919 when America imposed Prohibition. While sales to countries surrounding the USA multiplied (accounted for by smuggling into the U.S.), the loss couldn’t atone for the loss of revenue and customers brought about by Prohibition.

Things were to become even worse for Scotch whisky. Taxes were raised in Britain but were forbidden to be passed on to customers, crippling profits. Then the Great Depression hit at the end of the 1920s. In 1925, there were 124 distilleries operating in Scotland, but by 1929 that number had reduced to just 84. The hard times encouraged a period of industry consolidation, and many companies entered negotiations to merge: Buchanan-Dewar acquired Ord, Pulteney and Parkmore when it took over James Watson & Co, and subsequently bought Aultmore Distillery as well. A very much larger merger followed early in 1925, with the aim of cutting costs and stabilising the industry, Buchanan-Dewar joined with John Walker and Sons to become part of the Distillers Company Ltd (DCL).

Although part of a larger company, Dewar’s maintained control over its direction. It was still technically competing against Walker’s and Buchanan’s for sales but at the same time had to cooperate with them. Even if this was a time of large-scale changes within Dewar’s it was also a time of abundant opportunities, particularly in their global markets.

In 1927, a feat of modern technology enabled Bert Hinkler to fly from London to Sydney in just 16 days, taking with him a bottle of Dewar’s whisky and so generating more welcome publicity. The impressive flight captured the attention of the press on both sides of the globe. But just as things hadn’t been going exactly smoothly in the UK, Australia was struggling with its own problems, including inordinately high taxes on imported whisky. This, coupled with the artificial strength of the pound, thanks to the 1925 re-introduction of the gold standard, knocked down the profitability of Dewar’s Australian business. The way around this was to build a distillery near Geelong in Victoria, which started producing whisky in 1928.

As Bert was taking off for Sydney, the Pathé newsreel company happened to be filming at Dewar’s Aberfeldy distillery. In another ground-breaking marketing move, it produced what was then a rare glimpse into the working life of a distillery in the late 1920s, including the sheer amount of manpower required to make whisky. This is believed to be the oldest surviving footage of Scotch whisky production and may be seen at Dewar’s World of Whisky at Aberfeldy Distillery.

Unfortunately, the Dewar’s famous brothers died within months and John and Tommy would never see the eventual recovery of their beloved spirit. John passed away in November 1929. Lord Forteviot, to give him his full title, was 74 years old and had been chairman for 35 years. His charity, The Forteviot Charitable Trust, still operates today, providing poverty relief and education throughout Perth, Dupplin and Aberdalgie.

Tommy, or Lord Dewar of Homestall, took over from John as Chairman but only for a brief three months as he died in early 1930. They left behind a completely unrecognisable company to the one they’d inherited and thanks to Tommy’s wit, marketing skills and sheer boldness, as well as John’s care, fastidiousness and attention to detail, Dewar’s had made it safely through the bleak years. Both died fabulously rich men.

After the sad loss of the brothers, P. M. Dewar was appointed chairman and John and Tommy’s nephew, John Arthur Dewar, became director in 1922. It was then that the merger of DCL eventually brought some stability to the market. In the early 1930s, things started to look a little brighter: tax cuts were made, Prohibition was abolished in America and around the globe countries slowly started to emerge from the depression.

In true Dewar’s style, the end of Prohibition proved dramatic. While talks were going on and it became clear that repeal was close, Dewar’s U.S. agent Joseph P Kennedy had a large shipment of Dewar’s whisky sat waiting onboard a ship off the coast of New York. Just hours after Prohibition officially ended, the ship docked.

The company’s advertising then brought Dewar’s brand into the realm of colour printing, first appearing in Britain’s Daily Record in 1936. A year later John Alexander’s son, John Dewar, became chairman of DCL, showing not only that the family remained involved in Dewar’s interests but they were taking care of the group.

Just as things were improving for Dewar’s, World War Two broke out. Anticipating hostilities, the company evacuated its London staff to Perth and dug trenches around the premises. Right up until September 1939, when war was declared, sales soared as people panic-bought whisky in anticipation of rationing. As predicted, both production and sales were rationed and eventually stopped.

After the war, distilling was slowly allowed to resume. Despite the wartime restrictions, Dewar’s had never stopped advertising, in both the UK and its export markets, to protect itself as best it could. Before the war, Dewar’s White Label blend had been the focus in terms of profit and volume and this continued after the war, turning into boom years during the 1950s.

The Dewar Highlander became the official company symbol in 1953, appearing in all ads worldwide. Across the Atlantic, sales continued to rise but it was 14 years after the war ended before Dewar’s was finally able to sell unrestricted by quotas in the UK. Continuing good fortune prompted the decision to move company headquarters, from old Victorian buildings sitting on a four-acre plot to a new 26-acre site with state-of-the-art machinery including a new bottling line and a further 24 acres for future development.

When the new site opened in 1962 Dewar’s had a 6.8% share of the global Scotch whisky

market, selling over 2.5 million proof gallons and America had overtaken the UK as the primary market. The second son of John Alexander Dewar, Henry Evelyn, the third Lord Forteviot, was chairman of the company at the time. By 1975, Dewar’s accounted for 10% of Scotch whisky sales in the USA. 

When Henry Evelyn retired in 1976, he became the last Dewar to hold the position of chairman, although his son John remained on the board. Even without a member of the Dewar family at the helm, things went from strength to strength, the brand overtaking J&B Rare as the best-selling Scotch in America, reaching nearly 4 million gallons in 1980. Dewar’s also continued to do well in countries as varied as Spain, Lebanon and Venezuela.

A further period of industrial consolidation awaited. In 1985, what had started as hesitant merger talks concluded in the £2.3 billion purchase of DCL by Guinness, which already owned Arthur Bell & Co, emerging in 1986 as United Distillers Group. Ten years after that merger marked the 150th anniversary of John Dewar setting up his original shop and blending whisky. An extravagant celebration ensued with historical exhibitions and a website commemorating Tommy Dewar’s remarkable exploits, treasures and artefacts.

Dewar’s was dramatically affected by the 1997 merger of the United Distillers Group with its rival, Grand Metropolitan to form what we know today as Diageo. The newly formed conglomerate was deemed to hold too great a monopoly on both the UK and USA whisky industries so was forced to sell off certain brands, including Dewar’s. Consequently, in 1998 John Dewar and Sons became part of Bacardi Ltd.

Dewar’s Under Bacardi Ownership

Bacardi’s purchase of Dewar’s came as part of a package with four distilleries: Aberfeldy, Aultmore, Craigellachie & Royal Brackla. These, along with MacDuff, which Bacardi already owned, form the five distilleries under the present John Dewar and Sons umbrella.

In an astute move signalling its recognition of the legacy and history of its newly acquired asset, Barcardi turned Aberfeldy’s disused malting hall into a flagship visitors centre, Dewar’s World of Whisky. It currently receives 35,000 visitors each year.

Bacardi also established new headquarters for Dewar’s on Glasgow’s London Road, where today huge tankers bring whisky for ageing, blending, marrying and bottling. Just down the road is the Camlachie Cooperage which repairs and remakes all the casks

As the millennium came and went it was decided that Dewar’s portfolio should be extended. The Master Blender at the time, Tom Aitken, created a 12-year-old Dewar’s blend which utilised the company’s tradition of double-ageing, or marrying, in cask for a further six months after blending.

This process had come from the original Master Blender, Alexander Cameron when he developed a new method of marrying malt whiskies by region – adding these to grain whiskies only after they had matured together.

Tom Aitken then developed Dewar’s 18-year-old blend and a premium Dewar’s Dewar’s Signature blend. The current master blender, and the first female to hold the role in Dewar’s, Stephanie Macleod, has also created her own blend: Dewar’s 15-year-old designed for the Chinese market. However, White Label remains the most widely consumed of Dewar’s blends. 

WHITHER SCOTCH WHISKY?

 TRENDS AND NEW WHISKIES FOR 2023

Another year of challenges, surprises, innovations, loss, and hope is where we start to look at what’s ahead for the New Year. Foresight and trends are generated through an understanding of our cultural ecosystem and what’s changing, what’s motivating people and all the adjacencies in the system that will give those changes momentum. This year we’ll identify the themes and forces pushing change forward in the Scotch Whisky Industry expressed through a few examples.

You’d think that almost three years of a pandemic would be enough time to adjust to new schedules and routines, but the upheaval, combined with other events, has stimulated change in sectors and product categories affecting many aspects of life. People, consumers, and citizens are still working out the details.

Food and Beverages: Sober-curious has moved to full-on sober for a growing number of consumers fueling NA bars, cocktails, and canned/ bottled drinks. NielsenIQ reports that “Between August 2021 and August 2022, total dollar sales of non-alcoholic drinks in the US stood at $395 million, showing a year-on-year growth of +20.6%.”

Whether it’s breaking the monotony of the last few years or an epic trip, consumers want to see, learn, and experience something new or discover what’s out there. Now, fun new technologies can help plan adventures, play with virtual worlds, or explore ancient history.

Alcohol: The beverage alcohol industry is constantly evolving as producers and distributors work to offer specialized products that meet the changing needs of customers across all segments. While decision-makers within the industry try to be data-driven, an excess or lack of data can make it difficult to spot specific consumer behaviour patterns and anticipate emerging trends. Brands that want to deliver value to their customers continue to wade through the data that is available to understand what lies ahead for the industry in 2023 and beyond.

Global exports of Scotch Whisky grew to more than £6bn for the first time in 2022, according to the Scotch Whisky Association (SWA). In 2022, the value of Scotch Whisky exports was up 37% by value, to £6.2bn. The number of 70cl bottles exported also grew by 21% to the equivalent of 1.67bn.

The Asia-Pacific region overtook the EU as the industry’s largest regional market, with double-digit growth in Taiwan, Singapore, India and China as the post-Covid recovery continued.  

While EU markets such as France, Germany and Spain continued their post-pandemic bounce-back with strong growth in 2022, India replaced France as the largest Scotch Whisky market by volume. Despite double-digit growth, Scotch Whisky still only comprises 2% of the Indian whisky market. SWA analysis shows that a UK-India FTA deal which eases the 150% tariff burden on Scotch Whisky in India could boost market access for Scotland’s whisky companies, allowing for an additional £1bn of growth over the next five years.

Beverage Industry Growth: When it comes to total consumption by volume, the alcohol industry continues to grow. The biggest shift has come post-pandemic as customers are once again able to enjoy on-premise beverage experiences. Despite the pandemic, the beverage industry experienced significant growth that is expected to continue, especially as new consumers are aged into the market.

In North America, the United States continued its recovery following the impacts of tariffs on Single Malt Scotch Whisky to again be the industry’s only market with exports valued over £1bn. Both Mexico and Canada also saw growth, underlining the importance of securing further market access wins through the renegotiation of the UK’s Free Trade Agreements with both countries.

How Fast is the Alcohol Industry Growing in the US? As of 2022, revenue in the alcoholic beverage segment reached $261.1 billion in the US. Between 2022 and 2025, the market is expected to grow by another 10.51% per year. The majority of revenue, $111.5 billion, can be attributed to beer sales. From a global perspective, China has generated the highest revenue numbers with sales of $319.8 billion.

Summary of the Scotch Market  

The export value of Scotch Whisky in 2022 was £6.2bn, up £1.68bn compared with 2021 and £1.28bn compared to 2019 (pre-pandemic)

The export volume of Scotch Whisky in 2022 was 1.67bn 70cl bottles (equivalent), up 291m 70cl bottles compared with 2021 and up 364m compared to 2019 (pre-pandemic)

On average, the equivalent of 53 bottles of Scotch Whisky are exported every second – up from 44 per second in 2021

Scotch Whisky was exported to 174 global markets in 2022

India overtook France to be the industry’s largest global market by volume for the first time - the volume of Scotch Whisky exports to India has grown by more than 200% in the past decade alone. India is the largest whisky market in the world but Scotch Whisky has just a 2% share of the Indian whisky market. The SWA believes that reducing the 150% tariff in India could increase the value of exports to the market by £1 billion over five years.

The United States recovered to reach over £1bn of exports – the first time since the 25% tariff on Single Malt Scotch Whisky was suspended (£1.06bn in 2019)

Bottled Blended Scotch Whisky accounted for 59% of value exports, with Single Malt 32% of all Scotch Whisky exports by value.

Top 10 Markets  

The largest export destinations for Scotch Whisky (defined by value) in 2022 (vs 2021) were:  

USA: £ 1,053m +33% (£790m in 2021) 

France: £ 488m +26% (£387m in 2021) 

Singapore: £316m +50% (£212m in 2021) 

Taiwan: £315m +39% (£226m in 2021) 

India: £282m +93% (£146m in 2021) 

China: £233m +18% (£198m in 2021) 

Panama: £203m +165% (£77m in 2021) 

Germany: £202m +36% (£148m in 2021) 

Japan: £175m +32% (£133m in 2021) 

Spain: £173m +46% (£118m in 2021) 

The largest export destinations for Scotch Whisky (defined by volume, 70cl bottles equivalent) in 2022 were:  

India: 219m bottles +60% (136m bottles in 2021) 

France: 205m bottles +17% (176m bottles in 2021) 

United States: 137m bottles +9% (126 m bottles in 2021) 

Brazil: 93m bottles +14% (82 m bottles in 2021) 

Japan: 75m bottles +33% (56 m bottles in 2021) 

Germany: 67m bottles +48% (46 m bottles in 2021) 

Spain: 67m bottles +39% (48 m bottles in 2021) 

Poland: 49m bottles +9% (45 m bottles in 2021) 

Mexico: 48m bottles +2% (48 m bottles in 2021) 

South Africa: 39m bottles +15% (34 m bottles in 2021) 

Regional Data

In 2022, Scotch Whisky exports by global region (by value) were:

Asia Pacific: £1818m +50% vs 2021 (29% of global exports)

European Union: £1596m +17% vs 2021 (26% of global exports)

North America: £1327m +32% vs 2021 (21% of global exports)

Central and South America: £737m +66% vs 2021 (12% of global exports)

Middle East and North Africa: £326m +74% vs 2021 (5% of global exports)

Sub-Saharan Africa: £204m +30% vs 2021 (3% of global exports)

Western Europe (ex EU): £146m +49% vs 2021 (2% of global exports)

Eastern Europe (ex.EU): £39m -18% vs 2021 (0.6% of global exports)

Category Data

In 2022, Scotch Whisky exports by category (defined by value) were:

Bottled Blend £3670m +43% vs 2021 (59% of global exports)

Single Malt £1986m +30% vs 2021 (32% of global exports)

Bulk Blend £190m +13% vs 2021 (3% of global exports)

Bottled Blended Malt £140m +22% vs 2021 (2% of global exports)

Bulk Blended Malt £130m +37% vs 2021 (2% of global exports)

Bulk Single & Blended Grain £58m +39% vs 2021 (1% of global exports)

Bottled Single & Blended Grain £19m +150% vs 2021 (0.3% of global exports)

THE NEXT BIG ALCOHOL TRENDS FOR 2023

Alcoholic RTDs with Natural and Herbal Flavours

The ready-to-drink segment, which includes malt-based, wine-based and spirit-based beverages, has been the fastest-growing portion of the market and is expected to grow by an additional 8% by 2025. For existing RTD brands, this means more competition and the need to innovate with new offerings. In 2021, RTD beverages were trying to appeal to the 25% of alcohol drinkers who were looking for low-carb and low/no-sugar options. However, this approach won’t be enough to maintain a competitive edge moving into 2023.

According to Sensient, millennials, who account for 62% of the RTD market, are now looking for RTDs that provide more flavour without sugar. Millennials also tend to be early adopters of trends, making it even more important to address this demand. Sensient also discovered that marketing labels like “Made with Natural Ingredients, “Unique Flavour,” and “Refreshing Flavour,” topped the list as the most effective in appealing to consumers and encouraging purchases. For these reasons, RTD brands are leaning into herbal, botanical, and citrus flavours that provide a subtly sweet flavour and the perception of health benefits.

Spirit Brands are Creating More Accessible Beverage Experiences

One of the alcohol trends in 2023 anticipates more consumers turning to spirits over beer, as they look for an experience that introduces them to new cocktails. Brands have to reach a delicate balance between offering something new without being too off the wall or intimidating. New spirits have to both be unique and familiar, which can be a tall order.

Many spirits brands are also leaning into the botanical and floral trend to create a well-balanced product that still provides the sense of something new and exciting. For example, according to Angie Kerns, who specializes in flavour profiles for Sensient, “Tangerine is a flavour that is recognizable yet slightly uncommon, but when you pair it with the emerging and somewhat nostalgic flavour profile of honeysuckle, it becomes more approachable to a wider audience of consumers.” In many ways, spirits and RTDs are facing some of the same challenges when it comes to flavour demands.

Classic RTD Cocktails Will Enjoy a Revival

Another 2023 alcohol industry trend expected to take root is a revival in interest in classic RTD cocktails, but this time with a makeover. As herbs and botanical flavours take over the industry as a whole, RTD brands are expected to incorporate these flavours into their classic cocktail recipes to provide a fun twist. These herbal and botanical flavours have created a real space for creativity even when it comes to age-old cocktail recipes.

More Sophisticated Low and No-Alcohol Products

Sobriety and health-conscious movements are driving the demand for more low and no-alcohol options. Currently, these products account for a 3.5% share of the volume of the market. However, this segment is poised for significant changes with the help of more sophisticated flavours.

According to Sensient, only 17% of those who consume low and no-alcohol beverages totally abstain from drinking alcohol. Most consumers in this segment, 58%, will actually switch between low, no, and full alcoholic beverages during the same drinking event. The same flavour trends that are being seen in spirits and RTDs are also influencing low and no-alcohol products. Consumers in this segment also want to be able to indulge while still experiencing a level of drink sophistication along with the health and convenience benefits.

Brewers Will Become More Experimental

Non-beer products dominate the emerging markets, but beer is still a steadfast product that appeals to a wide range of consumers. In the past year alone, 36% of consumers have reported that they have increased their beer consumption. Much like other segments of the market, brewers will need to continue to innovate when it comes to flavours. Moving into 2023, you can expect to see beers flavoured with chocolate, chilli pepper, and fruits for an adventurous beer experience.

2023 ALCOHOL MARKET TRENDS & FORECAST

More DTC Sales

Traditionally, wine has been the only type of alcoholic beverage that could be sold DTC in certain states. However, during the pandemic, many states relaxed their laws regarding DTC spirits sales and deliveries in order to prop up the industry. Opening this avenue to distillers made it clear that there are many opportunities for DTC sales, which empowered the push for DTC spirits sales to be managed similarly to the way wine is sold.

Currently, there are nine states plus the District of Columbia that allow DTC sales for spirits, and 46 states where DTC sales are sanctioned. The spirits DTC movement is looking to close that gap.

The Distilled Spirits Council of the United States is leading the charge for increased spirits DTC sales and working to change legislation. According to a 2021 survey, they have the support of the public. In fact, 80% of consumers polled think that DTC sales for distillers should be allowed.

Continued Increase in New Products

In recent years, there has been an explosion in new products hitting the market and this trend is expected to continue well into 2023. As an example, the distribution company MHW, Ltd has recorded an increase of 36% in new brand products just during the first six months of 2021.

A large part of this growth can be traced back to the federal excise tax relief program, also known as the Craft Beverage Modernization and Tax Reform Act. This program was designed to help both domestic and foreign producers create jobs by providing certain tax incentives for wineries, breweries, and distilleries. The program became a permanent fixture in 2020, which means that producers will continue to enjoy these benefits and develop new products at an unprecedented rate. 

Premiumisation will continue to be an Alcohol Trend in 2023

For over 15 years, premiumisation has had a huge impact on the industry and this trend will continue to shape the beverage industry in 2023. Consumers want to pay more to know that they are receiving premium ingredients and products that come with a story that highlights the who, what, where, when, why, and how of the brand.

Eco-conscious Brands and Products

The eco-conscious trend goes hand-in-hand with premiumization. Even younger demographics are willing to prioritize premiumization and eco-conscious characteristics. The focus is on quality over quantity and that includes shopping brands that are transparent about how their ingredients are sourced and what they are doing to reduce their impact on the environment. Today’s consumers are becoming more vocal about these sustainability issues and are holding companies responsible for their processes.

Diversity, Equity, and Inclusion (DEI)

Consumers also want to feel connected to brands through shared values. Increasingly, this means a focus on DEI, which means that companies are prioritizing representation, especially in leadership positions. This type of representation influences the company culture and ultimately what kind of products are produced. Everything from expanding flavour offerings to rethinking marketing and advertising strategies is now being done in a meaningful way to reach a more diverse and global audience.

Fastest Growing Beverages for 2023

As mentioned above, RTDs are the fastest-growing product category, with market share expected to grow 8% by 2025. From 2020 to 2021, spirits-based RTD experienced a revenue increase of 42%. This may have been helped by pandemic lockdown conditions, which drove up the demand for off-premise drinks. A consumer survey that was part of a larger market analysis led by the Distilled Spirits Council (DISCUS), found that about 66% of respondents occasionally or regularly consume RTD products.

Other spirits also experienced significant growth during this period, but nothing near RTDs. Here is a breakdown biggest growth in the USA according to the type of spirit:

Irish Whiskey – 16% growth

Single Malt Scotch – 14% growth

Even after lockdowns ended and customers were able to go out for drinks in bars and restaurants again, the convenience and quality of RTD products have continued to drive growth at a blistering pace.

NEW SCOTCH WHISKIES

January 2023 was a relatively quiet month in terms of new whisky releases, but one still saw some exciting new releases from some of the top whisky brands around.

GlenAllachie 2012 Vintage Cuvée Wine Cask Finish

The GlenAllachie has released its first whisky of 2023. The new scotch is a 2012 Vintage Cuvée Wine Cask Finish and is a 9-year-old blend of single malts finished in casks that once held four types of red wine: Languedoc, Recioto Della Valpolicella and two undisclosed Premier Cru Classés. Bottled at 48% ABV, The GlenAllachie 2012 Vintage Cuvée Wine Cask Finish will sell for £55.99 ($69).

The GlenAllachie unveiled its first whisky of 2023, 2012 Vintage Cuvée Wine Cask Finish. The 9-year-old whisky is a blend of single malts finished in casks that once held four types of red wine: Languedoc, Recioto Della Valpolicella and two undisclosed Premier Cru Classés.

The GlenAllachie said the Languedoc casks impart notes of “red fruits, sweet spices and garden herbs”; the Recioto Della Valpolicella, give flavours of “ripe cherries, coconut shavings, liquorice and raspberry coulis”; and the Premier Cru Classé wood imbues “blackcurrant, espresso coffee and wild truffle” notes.

“Cuvée” is a French term used to describe a wine blend composed of more than one grape variety.

After primary maturation in American oak ex-Bourbon barrels, the spirit underwent over 20 months of additional ageing in the various wine barriques within the distillery’s on-site warehouses. The casks were obtained from four fine wineries located in world-renowned regions in France and Italy by distinguished whisky maker, Walker, given his exceptional network of connections with niche producers.

After Walker determined the finishing period had delivered optimum influence, the whisky was skilfully blended to form the Cuvée Wine Cask Finish.

Bottled at 48% ABV (84°/96° proof), the 2012 Vintage bronze liquid is presented without added colouring and un-chill filtered; a philosophy the distillery proudly adopts across all its products.

Distillery Notes

Colour: Golden Bronze.

Nose: Bursting with orange blossom, espresso, maraschino cherries and honeysuckle, with hints of candied stone fruits, hazelnuts, lavender and cinnamon.

Taste: Waves of dark chocolate, redcurrants and burnt coffee beans, followed by crystalised almonds, blackberries and orange zest

Finish: Ginger and liquorice

About The GlenAllachie

One of Scotland’s few independently owned and managed distilleries, The GlenAllachie is led by industry veteran, Billy Walker, who boasts over a half-century’s tenure in whisky. With an emphasis on wood policy, The GlenAllachie’s cask budget for 2023 stands at an eye-watering £2.7m/$3.3m. With 16 on-site warehouses holding over 50,000 casks, they have end-to-end control of the maturation process.

The GlenAllachie focusses on quality over quantity, which is why they reduced production capacity from 4 million to around 800,000 Litres of Alcohol and increased the fermentation period to 160 hours for an ester-rich, fruity spirit.

They believe age and integrity matter, which is why all their whiskies carry an age statement and are bottled at a minimum of 46% ABV, natural colour and non-chill filtered for maximum flavour experience.

Bowmore Special Edition 18 YO For Chinese New Year

Beam Suntory, in partnership with Leo Burnett Singapore, has released a special edition whisky in anticipation of the incoming Lunar New Year. The Bowmore Islay 18-Year-Old single malt Scotch whisky features stunning new packaging which showcases the illustration of the Bowmore distillery, history and traditional Chinese elements.

The alcoholic beverage is being marketed to the public through different mediums, ranging from an increased retail dress-up at travel retail outlets across Singapore, Thailand and Taiwan. It will also be featured on digital screens at Singapore’s Changi Airport departure terminal. Social assets will also go live on a global scale while digital Ang Baos for the China market will be released via WeChat.

The illustration of the packaging, created with Singaporean illustrator Erika Tay Qi Yin, incorporates elements that define Bowmore whisky such as the distillery sitting atop waves, the barley, casks and smoke. The illustrations appear to burst out of the keyhole to symbolise a gateway into the history and legend that awaits within the Bowmore world. The design also features the dynamism and elegance of the water rabbit, this year’s zodiac animal, with the style taking inspiration from the traditional brushstrokes of Chinese paintings which focus on flow and fluidity, according to the release.

As this bottle is intended to be gifted, the company aimed at creating exquisite and authentic packaging for the Chinese New Year festivities. To do so, Beam Suntory partnered with Tay because she is known for her intricate level of detail, fluidity in her illustrations and a style that is heavily inspired by Chinese folklore.

As a Scottish brand that’s lesser known in Asia, this packaging concept allows the Asian region to gain the familiarity of Bowmore with the water rabbit as a guide. Inspiration came from Lewis Carroll’s Alice in Wonderland, where following the white rabbit leads one through a portal to discover an extraordinary new world. 2023 is the Chinese Lunar Year of the Rabbit.

The bottle is presented in an illustrated box that focusses on ‘reunions’ and aligns with what the Lunar New Year symbolises. The design includes an illustration of the Bowmore distillery sitting atop a swell of waves, with key elements such as barley, casks, and peat smoke all representing the features that define Bowmore whisky. Furthermore, the box features vivid depictions of the water rabbit, in a nod to the lunar calendar’s Year of the Rabbit. The design takes inspiration from traditional brushstrokes of Chinese paintings with a focus on flow and fluidity.

In a similar manner, Leo Burnett used the keyhole from the iconic Bowmore vault padlock as the gateway into the rich and mesmerising universe of Bowmore.

The 2023 special edition packaging for the Chinese New Year range features the core 12-year-old bottle available only in Canada, the 12-year-old Sherry bottle only in China and an exclusive global travel retail 18-year-old bottle. It will be on sale during the month of January leading up to the Chinese New Year. So far, Johnnie Walker was cashing in on the peculiar Chinese calendar for its Blue Label blends.

The news comes just months after Beam Suntory extended its partnership with global digital media agency M&C Saatchi Performance until 2024 after working together for a year. The company had previously appointed M&C Saatchi Performance to handle digital duties until April 2022 for key countries in Southeast Asia including Singapore, Malaysia, Thailand, Vietnam, Philippines, and Cambodia. 

The 18-year-old Bowmore Lunar New Year release has been matured in a combination of oloroso and Pedro Ximénez Sherry casks and is the second 18-year-old Bowmore Lunar New Year Limited Edition offered exclusively to global travel retail across Asia for a second year in a row. Lunar New Year and journeys are inextricably linked – as millions around the world embark on a journey home to be reunited with loved ones.

The 70 Cl bottle is at a relatively low strength of 43% ABV, priced around US$ 145-150.

According to the brand, the bottle offers a nose of dark chocolate, toffee and date oil. On the palate, consumers can expect notes of orange peel, peat smoke, coffee and macadamia nut. The finish is said to contain plenty of chocolate notes.

Chivas Ultis XX: Challenging Conventional Blending

Pernod Ricard-owned Chivas has introduced Ultis XX, a blended Scotch whisky containing five single malts each aged for at least 20 years. The Scotch whisky blend pays tribute to five generations of master blenders. The importance of this number can be seen in the five copper rings across the bottle’s neck.

Ultis XX is described as an ‘evolution’ of the brand’s original Ultis blend, released in 2016 as the distillery’s first blended malt whisky. The liquid honours five generations of master blenders by combining Chivas’ signature grain, Strathclyde, with five of the brand’s single malts: Strathisla, Allt A’bhainne, Braeval, Longmorn, and Tormore, all primary constituents of any and all Chivas Blends be it the 12, 13, 15, 18 or 25-Year-Old, in varying proportions. There are changes necessary for the Royal Salute and Chivas The Icon, removing Allt A’bhainne and Tormore and replacing them with Caperdonich, Dalmunach and Glentauchers single malts.

Ultis XX is the ultimate tribute to the five generations of master blenders who preceded the current Sandy Hyslop in dedicating their life’s work to mastering Chivas’ iconic house style. Each of the single malts used within this blend brings its own complexity to the whisky, just like each master blender brought his own unique style to the Chivas blend. With less than 01% of the millions of casks within their inventory used, and each cask individually hand-selected and nosed, Hyslop has ensured only the highest quality are included in a blend worthy of a celebration.

Adding XX to the Ultis name is a clear signal of the decadence that comes with the addition of a 20-year-old age statement and the complexity of flavour that whisky fans can expect from this premium blend. With this evolution, Chivas has once again reinforced the belief that whisky is the ultimate choice for a new generation of drinkers. As traditional conventions of blended Scotch are continuously challenged, Ultis XX takes pride of place as the pinnacle of their portfolio and the ultimate flex to elevate those ‘I’ve made it’ moments with.

Nose: The whisky was distilled exclusively in copper stills and presents aromas of juicy red apples, interlaced with raspberry jam, fresh vanilla pods and sweet butter toffee on the nose.

Taste: On the palate, notes of blossom honey, milk chocolate and poached pears in syrup are delivered, leading to a much-anticipated finish.

Finish: Long, sweet, and smooth.

Whisky Exchange Whisky of the Month February 2023

anCnoc 18 Year Old

The anCnoc brand came into existence just a few short years after Inver House Distillers bought Knockdhu distillery from United Distillers in 1988. Having brought the distillery out of mothballs, Inver House set about establishing a brand for its first Scotch whisky plant and changed Knockdhu- too confusingly similar to Knockando- to anCnoc [meaning black hill] to represent its single malt.

The first official bottling of anCnoc was released in 1993, although the brand never really took off until 2003 when it was relaunched with a 12-year-old bottling as its flagship. In the years that followed a series of vintages and age statements were released, and by 2013 the core range consisted of the 12-year-old alongside a 16, 18, 22 and 35-year-old.

While Knockdhu’s malt was renowned for its light, fruity style, the distillery has been producing a small amount of peated spirit for several years, which was finally released as part of a new collection in 2014. The peaty range comprises of Rutter, Flaughter, Tushkar and Cutter, all of which are named after peat-cutting tools and have been matured in ex-Bourbon casks for between eight and 12 years. anCnoc states the phenol content of all four, which ranges between 11 and 40 ppm, is based on the new make itself rather than the barley.

The retention of Knockdhu’s two originally-designed pot stills means Ancnoc’s signature fruity, citric and honeyed flavour is very similar in style to the whisky produced by the distillery more than 100 years ago. Ancnoc is matured in a mixture of ex-Bourbon and Sherry casks, while the final whisky is free of chill filtration and added colour, lending weight to the malt’s light fruitiness.

An 18-year-old single malt from anCnoc that has been matured in a combination of Spanish oak ex-sherry casks and American oak ex-bourbon barrels, creating a fruity, spicy character with rich undertones. The nose brings aromas of dried fruits and baking spice, ripe oranges, chocolate and oiled leather. The palate offers notes of fruit loaf, candied lemon, vanilla, honey, caramel, pepper and aromatic spice that linger in the finish.

DETAILS

Spirit: Single malt Scotch whisky

Distillery: (Knockdhu) anCnoc

Region: Highlands

Strength: ABV 46% 

Age: 18 years

Chill Filtration: No

Colour Addition: No

Available sizes: 70cl & 75Cl (USA)

Tasting Notes

Nose: Fresh apple – both sweet and gently sour – grainy vanilla fudge, freshly crushed malt, cooked sweetcorn and a touch of plasticine. Light fruity notes burst out of the glass when freshly poured, with darker flavours developing over time: candied lemon, pineapple, mango cream and dried tropical fruit trail mix slowly turn into flamed orange peel and raisins. Butterscotch sits behind, with spice and nuttiness growing over time, especially after adding a splash of water.

Palate: Sherbet-filled refresher chews and lemon-zest-sharpness to start, softening to toffee and spiced sponge cake. Dry cinnamon bark and ground cinnamon heat are joined by cracked black pepper and orange zest, with a background of stewed fruit.

Finish: Lemon, toffee and gentle spice. Cream and mango develop, making way for nutmeg, cinnamon and a gently dry lingering spice.

Overall: A whisky that does wonders with some time in the glass. Starting with the fruity anCnoc character that is shown mostly in the younger expressions, the two years in oloroso casks make themselves known after a few moments, with darker, richer and spicier flavours building but not overpowering.