Whisky Battle: Single Malts Vs. Blended Scotch, In Million-Dollar Taste Wars

 @natrudy on October 28 2013 12:17 PM
Scotch Whisky
Scotch whisky accounts for one-quarter of U.K. food and drink exports. Reuters

With the steady upswing in popularity of single-malt Scotch whisky since the 1970s, the once-niche spirit now competes stiffly with commercial blended Scotch whisky, sold under recognizable labels like Johnnie Walker, according to a recent Bloomberg column.

Single-malt Scotch whisky from Scotland is made exclusively from malted barley, whereas blended Scotch whisky also uses grains like rye and wheat. Single malts, which are more expensive, have gradually escaped their perception as a niche premium drink for connoisseurs, and are now widely consumed. There’s even a Scotch Malt Whisky Society.

In response, traditional whisky, by brands like Chivas Regal and Bacardi-owned Dewar’s, released several customized products, playing for customers by repeatedly varying the same basic taste theme.

Bloomberg wine writer John Mariani profiles some of the blended Scotches produced by Diageo PLC (LON:DGE), the maker of Johnnie Walker. These range in price from the $25 Red Label to the $225 Blue Label, which boasts its own drinking ritual.

According to Diageo’s latest company filings, it sold 20 million 9-litre cases of Johnnie Walker globally in its last fiscal year. In 2013 the company estimated the brand’s value at 625 million pounds ($1 billion), though that’s less than its Canadian whiskey brand, Crown Royal, which was worth 963 million pounds, and Captain Morgan, which was worth 790 million pounds.

Mariani notes that Diageo is now squarely targeting the Asian market, where Japanese whisky is also already popular. The company claims to be the top international spirits company in Asia Pacific, in its latest annual report.

Sales in emerging markets account for more than 40 percent of Diageo’s business, according to its latest quarterly results. In Southeast Asia, Johnnie Walker sales were up 17 percent, compared to a 14 percent boost in North America.

According to the U.S. Distilled Spirits Council, the U.S. exported $217 million worth of whisky in the three months ended March 2013. 

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