Scotch whisky sales will fall 10 per cent by 2017

October 3, 2015

business, news

Pic by mnem

Swirling winds, rugged landscapes and hillsides covered in heather are epitomised as the symbols of Scottishness by Scotch whisky companies, but this image is predicted to have a detrimental effect on the industry over the next five years.

The Dark Spirits report by market researchers Mintel has predicted that UK sales will drop 10% by 2017 because the current images of “heather and weather” is off-putting to younger drinkers. There’s a much greater sense of ceremony with Scotch, partly because they think it should be drunk neat compared to imported US whiskies which are more commonly mixed with the likes of cola or ginger ale.

Thanks to a spike in demand in emerging markets such as Brazil and Japan, exports have risen by 60% over the last 10 years, but in the UK sales have been falling.

There has been a general decline in alcohol sales in the UK, but the report suggests that Scotch is being hit particularly hard due to its image. It is often seen as a drink for dad, so despite some more up-to-date marketing campaigns from whisky companies, contemporary packaging, and attempts to target younger shoppers, its antiquated image could still see it lose more than £300m over the next five years.

Younger drinkers and women generally prefer drinks with a sweeter, more approachable flavour profile, but in 2013 a survey by ASDA found that 33% of the supermarket’s female shoppers were buying whisky, and that 60% of the women question had developed a taste for it through their husbands. More than half were also choosing to drink it neat, helping to partly dispel the male-dominated stereotype.

A senior drinks analyst for Mintel has said that major brands such as Glenfiddich and Talisker, which are owned by drinks giant Diageo, “have been guilty of focusing on ‘heather and weather’ imagery rather than more personable identity projected by the likes of bourbon import, Jack Daniel’s. Such a focus is far from emotionally engaging and feels somewhat tired.”

According to the report, overall UK whisky sales will fall from £2.55bn to £2.25bn by 2017 with Scotch bearing most of the brunt, while the sale of US imports such as bourbon are actually bucking the trend by showing a growth in sales.

There may be tough time ahead for the UK market, but a report last month by the SWA (Scotch Whisky Association) showed a 22% increase in exports for the first half of 2015, a surge which is a direct contribution to the Scottish government’s target of a 50% increase by 2017. This overall increase is the result of a burgeoning market in Asia which rose by 33% to £423m, and in Central and South America exports leapt nearly 50% to £214m. The world’s two biggest Scotch markets, the US and France, rose 14% to £268m, and 13% to £220m respectively.

Do you think the Scotch whisky industry needs a makeover? Go to our comments section below and tell us what you think would make it more appealing.


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