Wherever it comes from, the prospects for whisk(e)y remain very bright indeed. But, while many producers are targeting the emerging markets, Yoanna Ilieva, alcoholic drinks analyst at Euromonitor International, maintains that opportunities still exist in the most developed of regions.

The whisk(e)y category is taking slow but stable steps up, remaining resilient to negative economic conditions and helped by widening demographics and premiumisation trends. Despite its conservative offer, the category has something for each sales region, providing opportunities for growth regardless of the market’s maturity or stage of development.

Emerging markets’ interest in whisk(e)y is evident from their increasing share in the volume breakdown of regional sales over the 2006 to 2011 period - even after the exclusion of the 'other' whiskies (Indian whiskies) category. In 2011, 'other' whiskies accounted for 86% of sales in Asia Pacific. Emerging markets are set to account for greater total volume sales than mature ones by as early as 2015, with China and Vietnam having the highest forecast CAGRs. 

Aspiration is the key growth driver behind sales growth, both in the wealthier Asian Pacific countries and the less affluent emerging markets of Eastern Europe and Latin America. The key difference between these regions is that aspiration inhabits different price segments.

Amongst the newly rich in the emerging world, rising disposable income levels are awakening interest in whisk(e)y, particularly in premium single malt variants. South Korea, Russia and China are forecast to see the highest CAGRs.

In less affluent emerging countries in Eastern Europe and Latin America, meanwhile, interest stems from whisk(e)y’s cachet, based on heritage. Appeal in these countries is also linked to the connotations of whisk(e)ys with drinking traditions in the more affluent Western world. Up-moves in these countries, however, remain within the capabilities of consumers and are mainly focused on trading up from cheaper local spirits to economy standard whiskies. The scale of the opportunity is still impressive, however, as indicated by Mexico and Brazil. These countries are forecast to add 12m litres each over 2011-2016, while Russia and Poland are expected to respectively gain 11m litres and 7m litres during the same period.

But, this time, it is not all about the emerging markets. 

Despite a slower performance, mature markets still account for significant sales volumes. Growth in these countries has predominantly been driven by innovation.

In the saturated countries of the developed world, whisk(e)y producers need to maintain the interest of a more sophisticated and demanding consumer. In order to maintain growth, the category has to go the extra mile in terms of flavours, formats or positioning.

Producers are also shifting their attention to demographic groups that have previously been neglected, such as the young and the female. New flavours and formats are helping to revive interest in once moribund markets such as Bourbon in the US, while Bourbon-based RTDs are enjoying growth in Australia and New Zealand. The revival of the cocktail culture is creating interest among consumers who were previously largely ignorant of whisk(e)y. Another emerging trend, particularly in the US, is craft distilling, with artisanal spirits expanding across the country and abroad.

Diversification is another growth driver for both emerging and mature countries and derives from the strong export opportunities for non-Scotch whisk(e)y. Irish whiskey and Bourbon are concentrated predominantly in the US, for example, providing significant export potential due to their accessible taste and the backing of international companies. Japanese and Canadian whisky sales could also be boosted outside their countries of origin, based on credentials such as high quality and/or an ‘exotic’ provenance.

Deregulation could also further propel growth in the category, with falling tariffs secured in South Korea and on the horizon in India.

What comes as a surprise in a category based on tradition and heritage, though, is the appearance of no-age statement Scotch whisky variants. Limited production capacity imposed by long lead times has encouraged some Scotch producers to focus on higher margin variants, such as single malt whisky, and to withdraw products that are perceived to be of lesser quality such as blended malt. However, some companies responded to the limitations on production imposed by long lead times with the removal of age statements, in order to counter their current shortage of aged whisky.

Time will show whether this move, which contradicts the very essence of whisky’s traditional appeal, will prove successful. However, with such developments in mind, growth prospects remain, throughout the world.