All Change

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The whisky industry is constantly changing. Now it’s the new world’s turn to reshape it.

Caracas, Venezuela, 2am Friday night. Pneumatic breasts and curves the like women’s magazines have abandoned long ago. The women can’t believe their looks and the men can’t believe their luck. I am in San Ignacio, the city’s main entertainment and shopping complex to the east of downtown, a collection of 17 (I am told) bars and clubs, and numerous shops. Apart from the sound of South American-accented Spanish in the air the clubs are like many others around the world: suited, brooding hulks on the door, music pounding to vibration level, and excited partygoers all dressed up and hoping to get the nod for entry.

But here the queue is not dipping in to its pockets to pay a cover charge. No, the currency of entry here is whisky. And to name drop, the preferred currency, the US dollar of Caracas club country, is Johnnie Walker Black (closely followed by Buchanan’s and Old Parr). You want to come in? Then order a bottle of Johnnie on the door. It’ll be delivered to your table with glasses, ice and water for the group. How civilised. There were seven of us so the entry price was two bottles.

A few days later, in a trendy Tex Mex restaurant in Puerto la Cruz, a five-hour drive north east of Caracas, a group of young women huddled around a bottle of Buchanan’s chatting. The food is spicy fajitas and burritos, the wallpaper is a black and gold Striding Man pattern.

It is fresh approaches to whisky, from countries unencumbered with how things should and shouldn’t be done, that will reshape the industry in the coming years. Slowly, slowly, the old rules will no longer apply.

Famously, in 2003, Diageo announced that it was the quantities drunk by the Spanish (and demands from the Johnnie Black blend) that led to single malt Cardhu becoming a vatted malt. It was a move that sparked furious discussions about standardising rules among members of the Scotch Whisky Association in the classification of whisky across the industry. Spain is Scotland’s biggest export market worth around £300 million a year, but it nevertheless still came as a surprise that one country’s consumption of one whisky could spark such a stir in the industry and get one famous whisky to change its years of history in a one fell swoop.

There would have been similar stirrings earlier this year across Scottish distillers at the news that Japanese whisky had been named the best in the world ahead of its more esteemed rivals. The international competition is organised by Whisky Magazine and has 16 industry experts involved in a blind tasting of more than 200 whiskies. Yoichi 20 Year Old, distilled on the shores of the Sea of Japan, won the single malt award – the first outside of Scotland to do so – while Suntory Hibiki distilled near Sapporo (of beer fame) picked up the best blend award. Exactly what changes were made as a result of the news is unknown but it would be a surprise if Japan’s honour didn’t cause more than just some Scottish head scratching.

So what does this all mean? Quite simply, the way the industry works is being shaped by the new world of drinkers. Whether it’s the way Venezuelans drink it, the amount of a particular single malt the Spanish drink or the success of the Japanese distillers, the main players in the game – Scotland, Ireland and the US have to sit up and take notice. And adapt.

It’s an industry that understands adaptability or it wouldn’t have thrived for hundreds of years. It knows how to survive and it knows how to change to survive. So is it ready for the next big wave of influence: India and China?

Shailendra Singh, is MD of Percept Ltd, an influential Mumbai marketing agency, and a man who mixes with cricket stars and former Miss World’s. He drinks whisky. I asked him what it was that drove India to become the biggest whisky market in the world.

“With a dynamic changing social scenario there is a growing chunk of singles and young couples with disposable and double incomes, and nuclear and split families in the city,” Singh explained. “The idea of entertaining out and loosening up with a crowd over a drink has found great popularity with the young upwardly mobile brigade.”

Mandeep Grewal, brand ambassador for Johnnie Walker and responsible for growing the brand in the British Asian market agrees. “Punjab state has the highest per capita whisky consumption in the world. Unfortunately, the whisky is consumed in high volumes with no knowledge about the product at all. Whisky brands just play a role in exhibiting the social status of the consumers.”

The same drive by status is also one that can be expected in China, and expect its significance in the industry to grow. John Lamond, Master of Malt, points out in his Global Report elsewhere in this book that exports into that market grew by 1030% between 2001 and 2006. The base off which it grew might be small, but growth like that cannot be ignored, nor fail to influence the industry.

There is a significant difference between the two markets, notably a thriving local whisky industry in India, protected it must be said by the huge tariffs imposed on imported spirits by the Indian government, which run into hundreds of percent. So a lot of the drive to the top has been due to successful Indian brands such as McDowell’s No.1, Signature, Bagpiper and Seagrams Blender’s Pride.

Singh, however, says the rich and famous still stick to international brands like Chivas Regal, The Famous Grouse, Cutty Sark, and so on. (Although certain Indian premium whiskies like Royal Challenge & Antiquity are also popular among this crowd).

He also recognises an important factor that will influence both India and China significantly: the influence of immigrants from these countries.

“Jack Daniel’s is the most well-known American whiskey brand in the country today. The brand has capitalised on a youth appeal in relation to rock music to attract its target segment. This whisky has a number of Indians returning from the US as its brand ambassadors and evangelists, having experienced the product on home shores. Presently, bourbon sales are driven largely by Indians returning from the US.”

China, like India, has shown that its people can thrive across the world, yet continue to retain links with their home country. It’s an important factor in changing habits and in many ways importing beliefs on what carries status.

I’ve seen the effect easily enough myself. The influence of Canadians working in the Bermudan financial system means bars are full of cries of “[Canadian] Club and ginger.” Other visitors in turn import the drink back to wherever they come from. And so habits spread.

Then there is the influence of food (covered in Trend 3 in more detail). Curry is too broad a term for the cuisine of India and beyond but if whisky is seriously going to crack that market it simply has to become accepted as a drink that is good with its food.

In the UK, Kingfisher beer thrives thanks to the huge number of Indian restaurants. Cobra, it’s fair to say, was probably invented largely on the back of their existence. Trend 3 shows whisky can be a drink to pair with whisky and JW’s Grewal already sees the potential. “Whisky has a great potential in the UK restaurants, “ he says. “Success to me would be when restaurateurs would confidently recommend consumers different style of whiskies with variety of dishes. I believe that the future would be looking at specialist Asian cuisine rather that all the Indian food bundled into one word ‘curry’.”

Amrut Distilleries, an Indian company that uses barley grown in Punjab and Rajasthan, has already marketed its own single malt at Indian restaurants in Scotland, in a bid to follow the Kingfisher success. Who (and where) is next?

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