For many it's a question of accessibility rather than pure economics, with opportunities arising for brands that can offer new and exciting ways of selling whisky.
Often considered an elitist spirit, Scotch whisky’s popularity appears to be waning as gin’s star rises. Affordability is a massive factor, as the price of premium whisky can often reach astronomic heights. ‘Gin may be priced from £13 to £60 a bottle and it ends there, but with whisky the range can be from £18 a bottle to £18,000 a bottle,’ says Tom Aske co-founder of Black Rock whisky bar in Shoreditch.
Many have blamed the decline in Scotch whisky sales on the rise in spirits duty, with around 80% of the retail price of a bottle of whisky now made up of tax. Figures from HM Revenue and Customs show that sales of Scotch whisky in the UK have taken a hit over the past year, having fallen by a million bottles during the first half of 2017 compared to the same period last year.
Yet despite this, consumers are still investing in premium spirits. A recent survey by tonic and mixer brand Franklin & Sons shows that the average UK drinker routinely spends around £1,500 annually on alcohol, most of which is being spent on premium spirits. For many it therefore seems to be more a question of accessibility than pure economics, with opportunities arising for brands that can offer new and exciting ways of selling this spirit, which is so steeped in tradition.
In a world where attention spans are shrinking, causing a stir is the best way to capture attention.
At LS:N Global, we’ve long talked about the importance of hype for fashion brands and it’s something that the drinks sector would benefit from tapping into. In a world where attention spans are shrinking, causing a stir is the best way to capture attention. Earlier this month, we saw the Whisky Foundation successfully adopting this approach with its e-commerce stock market for whisky. The brand sold bottles of Maltan’s Springbank 24-year-old single malt, which usually retails for around £410 ($550, €465), at a starting price of £0.75 ($1, €0.85).
With only 244 bottles available and the price fluctuating according to market demand, the idea was to use this novel retail approach to inspire excitement and draw in a wider audience of people who may otherwise not have invested. ‘I can get a truly phenomenal bottle of whisky for just $1,’ wrote Forbes contributor Felipe Schrieberg summing up the mood among buyers. ‘It's too good an opportunity to miss.’
A new subscription model, Whisky Me from Black Rock, similarly lowers the price of premium whiskies and improves accessibility, this time by offering smaller quantities of specially curated examples. The 5cl pouches of single malt are delivered on a monthly basis, allowing subscribers to try before they invest in the full version.
‘With so many brands, bottles and expressions to choose from, the diversity of whisky can make it an intimidating experience for those discovering it for the first time and an expensive hobby for connoisseurs,’ explained Thomas Aske and Tristan Stephenson in a statement.
As a new generation of whisky drinkers comes to the fore, forward thinking spirits brands need to consider how to tailor their retail model to better reach this consumer.
For more on the immediate challenges facing the spirits market, read our 2017 Food and Drink Futures report.