First Half Woes - Export Data Gloom
Commercial Spirits Intelligence No. 63
As people who have worked in and around the spirits industry for many years, we found that there was a lack of good, public, research on the trends in the spirits industry. Whether it’s trends in wood, or distillery capacity, or M&A activity - many of the existing research providers speak to a specific niche when we wanted a whole-market analysis. In this newsletter we leverage our experience, contacts and market intel to provide meaningful analysis that speaks to relevant issues for you. This newsletter is a collaboration between Duncan McFadzean of Noble & Co, and Martin Purvis. If you find this newsletter valuable, please consider a paid subscription.
First half woes impact 2024 export volumes of Scotch Whisky
Executive Summary
Following a stellar year of production and sales in 2022 and a decline in 2023 the release of export volume and value data by the Scotch Whisky Association in mid-2024 was a timely reminder that sales of Scotch whisky (and all global spirits) are under serious pressure at present. The headline data was as follows:
· Export value of Scotch Whisky in H1 2024 was £2.1bn, down £470m compared with H1 2023. This is an 18% fall in value.
· Export volume of Scotch Whisky in H1 2024 was 566m 70cl bottles (equivalent), down 64m 70cl bottles compared with H1 2023. This a fall of 10%.
We look at the implications of these data. The volume reduction of sixty-four million bottles is significant but it also has a number of knock-on effects to the industry here in Scotland.
The great thing about brown spirits is that consumption today doesn’t bear much resemblance to the production of new-make spirit which is all about drinking in 3-12+ years’ time and the consumption patterns that will exist in the future. Maturation of whisky allows plenty of time for things to evolve and develop and markets are always in flux.
The implications of variance to plans always have a knock-on effect. More drinking drives increased confidence and a game of catch-up as products get used before otherwise expected. The decline in consumption means that whisky is not emptied from barrels and remains in warehouse for longer. Three-year-old becomes four-year-old and the good thing is that it does not go off and may become more valuable. It does however mess with the best laid plans for wood and warehousing. In this article, we use the recent scotch whisky export figures to assess the impacts of the current patterns and what this may drive in the near future.