My review of the whisky year 2013
2013 has been very busy; at least to the same extend as 2012, if not more.
Since this report is rather long, a list of my key points:
Whisky-news.com 2013 Figures:
The first 8 months have been steady, with the number of visitors increasing from August onwards, resulting in a yearly number of visitors to over 220,000.
I am pretty happy with these figures, considering that I was not able to taste (so far) the Diageo Special Releases, which created an appreciable boost in visits the past two years.
(By the way, I am always looking for whisky samples to taste. Feel free to contact me here if you want to send me samples. This will be much appreciated.)
Considering that whisky-news.com is free of any advertisement, I am not looking for record-breaking figures in order to generate a maximum of money. I only want to provide an independent source of information appreciated by the whisky community. I hope that you are satisfied with the quality of the content?
Speaking about content, the number of available tasting notes is exceeding now 2000 (both in English and French) and the number of new reports or distillery in focus might have been slightly lower than the previous years. This is due to considerable efforts invested in my book: Glengarioch distillery, the Manson Distillery (for more information, click here) that should be available within the next 2-3 weeks exclusively here.
Press Release and New Whiskies:
I receive rather regularly Press Releases (PR) for new products and then it contains information that I consider partially pertinent to my readers, I will publish it. If not, it will remain in my mailbox.
A fair number of new products reached the market last year, with some attracting tremendous attention, such as the Glenlivet Alpha or the Diageo Special Releases.
Interestingly, the list of countries where the Glenlivet Alpha mentioned in the official Press Release was supposed to be distributed was rather incorrect, since several countries, such as Switzerland, did not received the product. For the latter, a nice selection of products was announced, but to get them, this is another story, since most countries still have not received all the products and if any, in quanities much smaller than ordered.
Creating the buzz is nice, but before releasing the news, the companies should at least ensure that the logistics is aligned with the marketing?
Over the year, I contacted several companies for diverse reasons (e.g., complimentary information), but received feedbacks (positive or negative) in only 25% of the cases. From a communication agency, I would expect at least a reply, even a negative one? What do you think?
Whisky production: some new kids on the hunt for the liquid gold?
While reading the excellent Malt Whisky Yearbook 2014, I was puzzled by two opposite trends: decreases in whisky sales volume in 2013 and increases in production by expansion and construction of new distilleries
Based on the current assumptions, new markets (mainly central and south America, Asia and Africa) will be thirsty of the aspirational drink that is whisky in the next 5 to 10 years. Therefore, the current reduction in volume is expected to be only conjectural.
The big players such as Edrington, Diageo and Chivas (Pernod-Ricard) have announced large extensions or new distilleries at Carron (Imperial), Macallan, Mortlach and Teanininch to name a few.
In addition, many small to medium size distilleries are being built or planning application submitted and include (Scotland only):
-The Glasgow Distillery (Tim Morrison)
Glenrothes Distillery (Kyndal and John Fergus and Co)
Falkirk Whisky Distillery
Gartbreck Distillery (Islay)
Huntly (Duncan Taylor)
Shetland Distillery Company (Stuart Nickerson)
Longship Distillery (in Orkney, Grythyttan)
Since the whisky consumers are constantly looking for new products, distilleries focusing on niche markets, the future might be promising for some, but for some, their hopes might be short livedw
With the proliferation of new distilleries, the consumer will need to make choices on his whisky spending and some might have a tough time ahead of them.
Considering only Diageo, its investment in malt production should result in approximately additional 20 mio LPA of production. Will the increased in demand that big, considering that Diageo is not the only player and new distilleries were built over the last 5 years?
Premiumisation and limited edition: A step to far?
During the Whisky Show in London, I noticed that several bottlings present during the public days (Saturday and Sunday) had disappeared on the Press and Trade day (Monday).
Over the last years, to maximize the Press exposure, companies have released a fair number of new releases. Unfortunately, this method created expectations from the consumers and a strong interest in limited editions, which are by definition limited, while decreasing the visibility of the core products, which guarantees the continuity of the brand and the volume of production. Therefore, at least some companies are trying to bring the interest of the consumer to the core products and to remove them to maximize Press coverage on their core range and blends.
For global companies, limited editions (a few hundred bottles) might be economically of limited interest, since they have a production tool for high volume, but not “hand bottlings”. Finally, some companies are running low on old and rare stocks (and potentially in internal competitions with the aged Blends, the Companies’ cash cow), thus requiring companies to adapt their commerical strategies.
In terms of pricing, we have seen with several examples (e.g., Octomore, Diageo Special Releases, Ardbeg from Douglas Laing and Hunter Laing) of sharp increases compared to the last two years for similar products. Most of them sold out very quickly (at the producer level), but a fair number of them are still available on the retailer’s shops.
When looking at previsions for 2014, the following statement of Nick Morgan (Diageo) in The Guardian on 26th October is rather interesting: Collectors merely have to work out if a bottle is really worth £1,500 (about the Port Ellen 2013), while Diageo has to contemplate how to price next year's release. "We are down to our last few casks," says Morgan. "In a decade or so, it might all be gone. Future pricing is going to be very tricky."
As long as the demand remains high and products selling out quickly, why should the price evolution for old and rare whiskies change?
I haven’t done any detailed analysis for this review, but looking at the Whisky Index Market published in Whisky Advocate or Whisky Magazine, prices are going up at auctions. A similar trend with whisky rarities retailers such as whiskyantique.com or lionswhisky.com has been observed.
With the ban of whisky on E-Bay in United Kingdom, new online auctions such as whisky-onlineauctions.com or scotchwiskyauction.com are now competing with traditional whisky auctions such as Mactears, Bonhams or Mullbery bank auctions.
Number of bottles sold via the online UK whisky auctions site is steadily increasing, with prices for rarities going up, not only for single malts distilled before the early 1970s, but for old blends as well (e.g., Black and White pre 1970s).
With the demand remaining strong (increasing?) and number of old whiskies in circulation decreasing, prices for old bottles should logically continue to increase.
A rather recent phenomenon is the attractiveness and dramatic value increase for some new products such as the Bowmore Devil’s Cask or Macallan Royal Wedding, selling out within hours and prices doubling within days. It seems like the marketing is doing a good job?
Somewhat surprising is the value at auctions for some products, such as the Ardbeg Single Casks, where official bottlings of Ardbeg Single Casks distilled in the early 1990s are reaching values similar, if not sometimes higher than some Ardbeg from the 1970s. Why so?
Non-age statement: The next trend after the cask finishing?
Cask finished products are still produced, but the offer seems to remain stable, at least for the distilleries with matured products. However, the new of products without any statement seems to be the trend, as well as whiskies with a strong wood extraction (“oaky” or “modern”). For my thoughts about non-age statement, have a look at my document here.
What are modern whiskies?
Regardless of the company, aged whiskies are scarce and for several companies, middle aged whiskies (12-18) as well. In the 1980s, as a consequence of huge stocks of whiskies, the infamous “Whisky loch”, many companies closed distilleries and reduced significantly their production afterwards. It took many years to go back to pre-1980s production levels
Until a few years ago, very few companies would have bottled a whisky (single malt) under 10 years of age. 10 years is a very long time, considering today’s dynamic and the amount of money immobilised. Therefore, companies are looking for solution to accelerate the aging of whisky. Since the beginning of the millennium, many companies (e.g. Morrison Bowmore Distillers) have decided to move from 3rd-4th refill cask to 1st or 2nd fill casks to ensure consistency in the product, but mainly to accelerate maturation.
The oak from the cask plays the role of a semi-porous membrane, allowing the keep the liquid inside the cask, while allowing air to pass through, thus allowing interaction between the oak and the spirit to take place: the “maturation”. Interaction between the oak and the spirit is stronger with a fresh cask, allowing more extraction from the wood (e.g., sugars from the wood (lactone)) compared to an used cask.
Therefore, by using a fair proportion of first fill casks you will increase the flavour intensity of the final product compared to refill casks. However, this does affect the general profile in giving an “oaky” flavour to the product, since you increase the proportion of "extracted" flavours from the wood compared to the "conversion" of flavours from the spirit due to contact with ambient air. Some like it this "modern" touch, but some less. In some whiskies, I find that the oaky flavours tend to be strong and dominate over the spirit and resulting in very consistent products.
Blends: The come back?
I mentioned above that companies might have been too far with their limited editions, diverting the consumers from their core products to limited editions (for instance, Ardbeg has stopped now bottling single casks). Sales of single malts are increasing, but still remain about 10% of the total sale volume of the whisky category. Investments in the single malt market is heavy in proportion to the volume of blended whiskies for global companies such as Diageo, Campari or Pernod-Ricard (Chivas): it requires more specialised bottling facilities, distributors and retailers (supermarkets vs specialist retailers). With the apparition of Hyper-premium blended (e.g. Chivas Stone of Destiny), blends are competing with the malts. Tremendous efforts can be invested in the creation of such blends by master blenders, while attracting considerably less media exposure than equivalent single malts.
Quite often, single malts aficionados disregard blended whiskies and this something that companies want to change. They want the whisky enthusiast to talk not only about single malts, but about whisky in general (malt + blends).
Maybe not a bad idea, since there are many good blended whiskies around.
I am glad I had the opportunity of tasting a few premium blended whiskies, since some are very good. And I would not tasting a Johnny Walker Odissey.
Patrick 16 Jan 2014.