World Whiskies continue to outpace Scotch on Home Court
August 24th 2020
Mark O’Loughlin – Market Advisor, UK
New data from the IWSR shows that once again sales of Scotch whisky in the UK, albeit at a slower rate, have declined in 2019. The dominant Scotch segment has over 65% market share of the whiskey category in the UK but has started to show signs of stagnation and decline in recent years. A -1.9% decline in sales last year follows a -3.7% decline in 2018.
In contrast, sales of Irish, Japanese and the Other world whiskies all grew in 2019 for another year running as seen in the below table. US whiskey, which is by far the 2nd largest segment seen sales decline -5.6% in 2019 after growing +15.9% in 2018. The decline is due to tariff-induced price increases. Sales of Canadian Whiskey also declined slightly in 2019 with sales contracting -0.7% after growing +12.3% in 2018.
However, arguably the more telling figures are the average annual growth rates over the last 5 years and the forecasts for the next 5 years. World Whiskey segments grew from between +7% and +16% in the period 2014 – 2019 whilst Scotch whisky declined -1.1%. World whiskey segments are also set to grow between +3.6% and +15.3% over the next five years while Scotch is projected to contract -1.8%.
The continuing decline in consumption of blended Scotch is the primary reason for Scotch’s stagnation. People are generally drinking less overall but blended Scotch is falling out of favour as consumers trade up to malts or turn to other categories such as Gin which remained the fastest growing category in 2019 growing +5.4%.
The growth in non-scotch whiskey stems from a desire by bartenders to try something different such as Rye whiskey. There has also been a lot of investment in Irish whiskey with several new launches in the UK market in recent times. An acceleration in Jameson along with strong performances at the top end in brands such as Teeling, Slane and The Dubliner has nurtured the growth of Irish whiskey which has seen a significant boost in consumer awareness over the last two years.
Looking forward, the decline in Scotch blends is likely to continue as the consumer base ages, the lasting effects of the Covid-19 pandemic persist and more people move towards malts which is also supported by the rise in e-commerce. Irish whiskey will likely continue to perform well, particularly premium brands, as awareness increases, new distilleries complete construction and new whiskey comes of age.
References:
Serjeantson, H. (2020) Domestic Volume Report 2020 – Spirits, United Kingdom. IWSR