Top 10 Scotch whisky markets by value
It’s been a rocky few years for the Scotch whisky industry, with exports declining across many of its major markets, but is finally showing signs of recovery.
Earlier this week the Scotch Whisky Association released analysis which showed the decline in Scotch exports was now “slowing”, suggesting a more optimistic future for the category.
In 2015, the value of Scotch whisky exports reached £3.86 billion, representing a decline of 2.4% from £3.95bn in 2014. This compared to a 7% decline from 2013 to 2014, indicating a slowing decline, and puts the total value of exports at 56% higher than a decade ago.
The volume of Scotch exports was down by 2.8% in 2015 to 1.16 billion bottles, from 1.19bn in 2014.
“The last decade has been a period of very strong growth up until 2013,” the report said. “Following that, there has been a limited slowdown due to global instability, market conditions in certain countries, an exchange rate fluctuations. While challenges remain, growth is returning in more mature markets while emerging markets still provide good potential. In short, prospects for growth remain strong but the industry continues to face challenging global economic conditions.”
The biggest declines of Scotch exports by value were seen in Brazil (-30%), Latvia (-33%), South Korea (-15%) and South Africa (-10%).
Strong performers included the US, which maintained an export value of £749 million, accounting for nearly a fifth of all Scotch exports.
Other strong performers included Japan, which saw the value of Scotch exports rise by 18% to £76m. Mexico increased its value by 17% to £115m, Turkey up 24% to almost £53m and China returned to the top 20 markets with an increase of 5% to £41m. Further growth was seen in the Netherlands, which saw the value of exports increase by 30% to £74m, and Poland where exports increased to £53m – a 20% increase.
With this in mind, we have compiled a rundown of the world’s top 10 biggest markets for Scotch…
[Date source: SWA Scotch Whisky Exports Review 2015)
South Korea is the third largest Asian market for Scotch whisky, and remains in the top 10 markets by value overall despite seeing a 15% drop to £99m in 2015.
“Asia is the third most valuable region with total Scotch exports valued at £772m in 2015. The value of the region benefits from a disproportionately high value for bottles blended Scotch whisky While only 13% of global bottled blended Scotch was exported to Asia, it accounted for 18% of the value, or £489m in 2015”.
Mexico experienced significant growth in 2015, continuing a trend of recent years, with exports increasing by 15% in value to £115m.
“In 2015, an additional 14m bottles were exported resulting in Mexico receiving 57 million bottles of Scotch, making it the fifth most important market in volume terms. Growth in the value of the market was also strong, an increase of 16% year on year in 2015”.
South Africa received 70% of the volume and 63% of total African Scotch whisky imports in 2015, which totalled £194m.
Overall, the volume of Scotch whisky exported to Africa declined by 11% to 5.6m nine-litre cases in 2015. Blended Scotch whisky exported to africa accounted for 6% of all blend Scotch exported in 2015.
In comparison, single malt exports declined throughout Africa in volume by 5% in 2015, but increased in value by 7% to 18.9m. Despite this, single malt exports to Africa still only account for 3% of total Scotch imports.
United Arab Emirates
The Middle East, which includes the United Arab Emirates, Lebanon, Israel and Qatar, accounted for 4.4% of all Scotch whisky exports in 2015, just below 4m nine-litre cases.
“Exports declined by 5% in volume terms due to lower bulk and blended deliveries although single malt exports increased by 22% to 172,000 nine-litre cases with a valuation of £22m”.
The third biggest European market for Scotch, Germany is a well established hub, with much of its Scotch imports re-exported to other countries. It achieved a 3% increase in value exports in 2015, bucking a trend among the top 10 European Scotch markets, which all recorded a decline in value.
“Not only does it provide access to a large and knowledgeable population but it also represents a global hub for onward travel for a considerable proportion of Scotch. In 2015 the equivalent of 46m bottles of Scotch were exported to Germany.
“Over two thirds (69%) was bottled blended Scotch whisky, 17% was single malt and 14% was in bulk. However the German market is under half this size and considerably more premiumised. The remainder is re-exported. About a quarter foes beyond the EU to about a hundred further markets, thought the dominant ones are near neighbours such as Turkey and Belarus. The remaining three-quarters goest to the rest of the EU, though some of this is probably ultimately exported beyond the EU too.”
Spain is the second biggest export market for Scotch in the EU, consuming just under 60 million bottles, making it the fourth biggest market in the world in volume terms. However 2015 saw its value drop by 8% to £152m.
The SWA report had this to say about the wider picture within EU member states: “The EU is the major single region for Scotch whisky exports. Although there are several European hubs where product is re-exported to markets outside of the EU, the significant and range of markets within the EU remains marked.
“Within the EU, performance in recent years has largely reflected performance of the underlying economies, with southern European economies affected by the Euro crisis showing more challenging market trends, with Germany, Netherlands and northern Europe doing better.”
Taiwan is the second biggest Asian market by value for Scotch whisky, making it a prime target for future growth. Exemplifying this confidence, last year Bacardi and Ever Rich launched a Dewar’s Fine Whisky Emporium at Taoyuan airport in Taipei. The first Dewar’s Emporium in Asia, the outlet’s design recreates the original Dewar’s wine and spirits store with vintage-style wooden display cabinets and flooring and two backlit windows projecting Dewar’s distillery in Aberfeldy.
Bacardi sees Taiwan as a strong potential for growth due to its relatively wealthy consumer market, which it said are particularly interested in rare and aged malts and blends.
Singapore achieved a 5% increase in value exports in 2015, rising to £211m.
“Singapore is a key hub for exports of Scotch whisky. Purely by direct exports it appears to be the third biggest market by value, but local consumption is a tiny fraction of this, with the balance re-exported to major markets in the ASEAN region, China and others. This means that direct export figures overstate the importance of Singapore and understate the importance of other regional markets, meaning that broader regional figures give a better sense of trends over time”.
France is the biggest importer of bulk Scotch whisky – a market that was valued at £70m in 2015 – but is currently undergoing premiumisation, a current trend among developed whisky markets. In the past decade, the value of French whisky imports has increased by 58%.
Referring to both France and the USA, the SWA reports said: “”Developed markets remain largest by value and essentially provide the bedrock for the global performance of the Scotch industry. moreover, these markets mostly experience considerable “premiuisation as consumers trade up for premium blends and single malts, driving further value increases.”
The biggest market for Scotch whisky by value, and the second largest by volume, the USA is streaks ahead of its nearest competitor, France, by some £300m. In terms of volume, France is the biggest market for Scotch consuming £176.2m 70cl bottles in 2015.
An increase in demand for single malt Scotch is the reason behind the high-value of the US market.
“Over two million cases (an increase of 2.5%) of single malt Scotch whisky were exported to North American markets in 2015, approximately one quarter of global single malt exports. this is particularly the case in the US and Canadian markets”.