Over the last few years and in particular during the recent pandemic, China has been consuming more whisky than ever before. Since 2019, the Chinese mainland has recorded the strongest growth for whisky produced in Scotland, with the total value of this market last year reaching £198 million (US$258 million), a rise of 123% compared with two years ago (China International Import Expo).
Global exports of Scotch grew to £4.51 billion last year, with the mainland one of the key emerging markets, which rose by nearly 85% in 2021 alone, making it the fifth-largest export market by value.
Graeme Littlejohn, the Association's Director of Strategy and Communications, said, "Some markets, such as China, have gone against the grain and demonstrated strong growth in spite of COVID-19."
"In recent years, China has seen a shift towards premium products, with Scotch whisky amongst them. Single malt Scotch now makes up over 60% of this market, which may explain the strong growth seen during the pandemic."
One of the main reasons according to John McDonough, chief executive of Speyside Distillery, is increased education, awareness and appreciation of single malts from Scotland.
Over the past 18 months, Spey, the distillery's single malt brand, has experienced strong growth. The company operates mainly in Xiamen, a port in Fujian province, which is very close to Taiwan - where there is also strong demand for whisky. He states that recent success of single malt in Taiwan is influencing mainland consumers, along with a rise in global demand for this type of whisky.
"A growing number of consumers in China are making discerning choices involving a wide range of consumer goods－with quality being the driving force. Scotch whisky is benefiting from this growing trend," he added.
But What Does this Mean for Owners of Scottish Single Malt Whisky Casks?
Essentially, this will add further value to your casks. As the Scotch whisky market grows in China and its appeal increases with the next generation, whisky from Scotland will generally have a higher value than whisky from China.
According to ScotchWhisky.com Pernod Ricard believes the US$150 million distillery based in Emeishan in China’s Sichaun Province will enhance whisky’s total share of the spirits market by driving it towards China’s ‘affluent middle classes’, creating more whisky drinkers.
The value of your casks is largely dependent on the supply and demand disconnect. In Scotland, there is a limited supply of barley and soaring demand. The fact that it takes multiple years to first distill but then age whisky to react to the demand for aged single malt whisky further helps to drive prices up.
From BNNBloomberg.ca , looking back two decades ago when China didn't drink wine: Now they savor a good wine - especially if it’s from somewhere else.
Demand has boomed over the last two decades with France’s best bottles considered luxurious gifts for social and official occasions. Chinese thirst propped up European producers after the financial crisis, and sparked a wave of investment in prominent French vineyards by Chinese companies. The movement has helped turn China into the world’s second-largest wine market by value, behind the U.S., and the fifth-largest in terms of volume, according to IWSR Drinks Market Analysis.
We foresee this happening for the whisky market in China as it is very early days. Scotch whisky will always be seen as a premium product and the whisky from China will have a long road ahead to catch up.