just-drinks, in association with The IWSR, presents this seven-part review of the Scotch whisky category. In part five, we look at the consumer trends that have come into play for the sector.

Blended Scotch's decline has partly been caused by macroeconomic factors, but the segment is also struggling to remain relevant among younger consumers, especially in mature markets - even though there is a brown spirits revival led by North American whiskey.

At the same time, growth in malts has been fed both by that revival and by growing consumer interest in provenance, creating pressure on mature stocks of single malt Scotch.

While companies can benefit from the greater profitability offered by malts - and, after all, the larger companies play in both segments - the industry has belatedly realised that many consumers have come to see malts as superior to blends - and is working to counteract this.

Hopes for the future also rest on Scotch's relatively low penetration in a number of emerging markets, including Poland, Russia, China and India. Here consumers are expected increasingly to switch from local products to 'Western' brands.

Consumer key views


Review

While blended Scotch is struggling to remain relevant to young consumers in many markets, malts continue to grow in an increasing number of countries - but are constrained by limited stocks.

Insight

The growth of malts has a knock-on impact on blends, making it harder for blenders to source malts of sufficient diversity and quantity to make their products. This will be an increasingly important issue in the future.

Future

Malt growth looks certain to continue to outstrip that of blends, although the latter should soon start to reverse recent declines. Only stock availability and the price rises that result from constrained supplies threaten the growth of malts.

Strategy

There is a belated realisation from the Scotch industry that it has encouraged the belief that malts are "better" than blends. Given that the latter is responsible for the vast proportion of sales, is a great recruitment tool and has far more supply flexibility, leading players must work to correct this consumer preconception.

For the just-drinks Scotch Whisky Essentials content page, click here

All data has been sourced from just-drink's joint report with The ?IWSR, Global Scotch Whisky Insights.