Scotch sails on …

Is the worst over, have the storm clouds parted allowing slivers of blue to emerge? But enough of the Brighton weather, what of Scotch whisky? The general consensus off the back of the SWA export shipment figures for 2025 is that the good ship Scotch is sailing in slightly calmer (if still squally) waters.

The fact that there are cautious celebrations over a 1% fall in volume from 2025 (£5.6bn to £5.4bn), and a 4.5% decline in value shows how bad things were looking. What’s a fall of 4 million cases between friends? Is this a diminishing of the multiple pressures assailing Scotch: COVID fallout, overstocks, GenZ’s (non)drinking habits, low consumer confidence, a misplaced belief in premiumisation, economic hardship, high prices, tariffs? 

Well, as GenZ appears to have stared drinking, that’s potentially one piece of better news. Tariffs, however,  haven’t gone away. The unpredictable and vindictive nature of the US government means it is impossible to say what will happen. 10% seems to be the lowest we can bank, but the suspension on malt tariffs ends in July. Anything could happen.

It does seem though that overstocking is easing, with analysts predicting that  growth could begin in 2027 helped by production levels being (belatedly) readjusted. (As ever I am indebted to the always excellent Commercial Spirits Intelligence Substack for much of the number crunching).

Things aren’t quite as straightforward as they may seem. The slowing of the fall in volume is down to the increasing reliance on bulk shipments which now make up 32% of the total. The majors are more than happy to offload their surpluses to a willing Indian market which saw bulk imports rising by 15% (220m bottle equivalent).

This could be read as India, as predicted, saving the category, but closer reading shows that the majority of the Scotch ending up there is for its own IMFL brands. India may absorb some of the excess, but it is not building a Scotch category.

With blend exports remaining flat, the drop in value drop has been driven by the concerning fall in single malt. As a category, single malt exports fell by 6% to £1.6bn in 2025, and were down by even greater margins in China (-16%), France (-13%) and Singapore (-21%). 

With the latter primarily a hub for China the decline in that market is even more concerning. Such are the levels of overstocking that retail prices of malt have been slashed to budget levels simply to clear warehouses. In addition,  the retail space in China continues to shift away from physical outlets stores and e-platforms to Uber-esque purchasing of single bottle by phone driven by price alone. While stocks are being reduced there is scant ability to brand build as a result. How to (re)build th category and start education will require clever new strategies.

Malt was never going to save Scotch in terms of volume, but its rise did allow the spirit to alter its image and introduce a new way of speaking about whisky. As the vast majority of the new distilleries established in the past decade are dedicated single malt producers – and with the majors not requiring new fillings contracts – they are increasingly exposed. 

Although the new players weren’t behind the price hikes which have exacerbated malt’s troubles, they are bearing the brunt of the downturn. Those who can hold to sensible pricing while still telling their story will get through this, but no-one is saying it will be easy.

What then does malt need to do to generate growth? Pricing certainly, but this is  also the sector where story and hand-selling is vital. It is also where quality differentiation is key.

Despite what TV and film suggest, people don’t just ask for ‘a malt’. They ask for a specific brand, flavour, or style. If unsure they will ask for advice. Malt works in a different way to blends – the distillery is paramount. 

Blends can cope (to some extent) with line extensions because their makeup means different facets can be enhanced. They have greater flex than malts where the distillery character acts as a limiting factor, a flavour boundary if you like. Working within the limitations of distillery character is the skill of the malt producer. If the creative force in blending is understanding the breadth of possibilities given by the complexities of characters within the blend, the skill in malt is understanding the possibilities within a more constrained area. 

Trying to dilute the essence of what defines a distillery by forcing it into ever more contrived shapes cannot work. A single malt cannot be all things to all people, something that the smaller guys know, but the majors appear to have forgotten. 

How to get out of the hole? Look for the bright spots. Taiwan seems to be recovering in terms of malt, while Turkiye appears to have fallen in love with Scotch. Latin America has scope and Africa, where toes have been dipped, is showing growing potential.  

A rebalancing of the majors’ strategies is also underway. The line taken by Sir Dave Lewis, the newest CEO on the bridge of the leaky ship Diageo, was ‘don’t panic’. His strategy is clear: price repositioning, which ‘might open up new proposition spaces.’

I’ve argued here before that whisky is built in the mainstream – be that malt or blend. This is where its most of its loyal – and potential new – drinkers are. The top end can look after itself, but it cannot be the sole focus. 

I don’t see this as the end of premiumisation, but evidence of a much-needed rebalancing. The prices of malts went too high, too fast. Will the majors be brave enough to bring them back down? We’ll see. It would seem from Lewis’ comments that the “new proposition spaces” in Scotch will come from blends. 

It’s the same as how the industry dealt with surpluses in the 1980s. Out of nowhere came Claymore and Glen Clova, The Buchanan Blend, Mackinlays and others. Pile it high, and sell it cheap. It got rid of the surplus but it did nothing for long-term health of the category.

Balancing the offering makes sense (and is what most folks in retail and on-trade have been arguing for), but if, as seems to be suggested, the proposition is purely price-driven then the spectre of commoditisation is summoned. 

Any rebalancing must also means a refocus on education – and there is a chink of hope in Lewis’ castigation of the firm’s treatment of the off-trade. He called Diageo’s off-trade customer service, ‘really very poor…

When we’re looking for growth, the idea that we can’t service the demand that’s there, is a source of significant regret, but it’s also an opportunity.’

It’s not just about selling, but listening and teaching. It’s not just getting rid of a surplus, but helping to rebuild and refocus a category. There may be blue skies ahead but the storm has not yet passed. 

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Scotchy scotchy scotch?

Speaking of Diageo, I see that its latest wheeze is Johnnie Walker Black Cask (43%/$34.99). This, according to a suitably breathless press release, is its attempt to convert Bourbon drinkers to Scotch with a blend ‘aged exclusively in American white oak ex-Bourbon barrels, bringing together the worlds of American and Scottish whiskies together’ because apparently most whiskey drinkers in America drink… American whiskey.

I know I’ve just said that blends have more flex but why try to make Scotch something it isn’t? Trying to make it taste like a Bourbon is a bit like trying to make a cow look like a horse. I don’t see any American distillers trying to make Bourbon ‘Scotchy’ I do see them making single malt though…

The reason Bourbon drinkers like Bourbon is because of its flavour – derived from a distillate of corn, rye (and/or wheat) plus malted barley, aged in new oak in a warm climate. Blended Scotch is made from a wheat distillate and a malted barley one, and is aged in used and refill casks in a cool climate. 

If you want to draw a parallel between Black Cask and another type of whisky it’s closer to Canadian than Bourbon – and Diageo has the biggest seller of the latter in the form of Crown Royal. So, why bother?

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On the Upside

News just in from the forests of Birnam  — the birch sap is rising and, as I write, is being tapped by the folks at Birkentree. It’s a remarkable mixer with whisky. Try it. (I’ve not been paid to say this, by the way).

In My Glass

The Whisky Exchange has just launched a new series of 12 bottlings, each of which is matched (it says here) with a sign of the Zodiac. At the recent (and rather excellent) Welcome To Whisky show, I tried its Piscean offering, a 10yo Glenglassaugh (55.4%/£87.95)

This is one of those distilleries which has long deserved greater attention. I thought it was about to beak through with its recent(ish) repack and range (especially the wonderful Sandend) but owner Brown-Forman has since decided to cut production. It’s currently half-mothballed. 

Anyhoo… this, aged in a refill sherry cask, has good sweet fruit, some Muscovado sugar, light licks of vanilla, green tea and then a whiff of shoe polish. A splash of water brings out a little milk chocolate and purpled fruits. 

The palate takes you to a classy antique shop, then stirs in some sultana and currant. In th middl thing gets stick with toffee apple while the tannins rest gently on the side. Water adds length and a slight minerality (salted caramel?). Overall, it’s  gentle and balanced. Is that Piscean? I’m sure someone knows…

There’s also another TWE exclusive, this time courtesy of the ever-enterprising Thompson Bros. This is a 35yo North British (40.1%/£64.95) which the brothers managed to save just before it dropped below the 40% limit. 

North British is a magnificent old distillery, though I wonder what its future might be. It’s currently owned 50:50 between Diageo and Edrington. Having sold Grouse, the latter presumably no longer needs grain, while Diageo already has Cameronbridge and might not need full ownership? North British was set up in the 19th century as an alternative to the cartel run by DCL. Might the same happen? 

That said, this example from 1991 is pale enough to suggest refill casks at work. It’s buttery with pastel de nata, a spank of mint leaf and general fatness that suggests it might be maize-based.  A dusting of cinnamon adds lift while cashew adds a drier element. All in all, it’s akin to a warm Victoria sponge.

The palate is super-soft with that gentle sweetness carrying through. There’s a hit of oxidation that nods towards its age and in time darker fruits emerge. I’d keep things neat. 

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In My Ears

I’ve been hard at work tasting 108 American whiskeys seven ways for a new book, so the title of the new (and rather wonderful) Hen Ogledd album fits the bill perfectly. Discombobulated flits between genres, is bracingly political, and has something to offer for everyone with open ears.