There’s a rarefied, artisanal air to single malt Scotch whisky. Bourbon is far more popular, thanks to its friendly, comprehensible identity and more approachable pricing. But no other whisk(e)y boasts as complex an array of tastes as Scotland’s single malts. Its distilleries dot the Scottish landscape to create a tapestry of terroirs and styles, and its regions only begin to describe the myriad expressions in the bottle.

It all offers fertile ground for exploration. If craft whiskies now set the agenda for millennial drinkers, then single malt Scotch is uniquely positioned to capitalize. But as with craft whisk(e)y, single malt’s growth has moved it closer to the mainstream. Single malt comprises more than 20 percent of all Scotch whisky volume in the United States, double its share of a decade ago. In dollar sales its share is at 38 percent, and growing fast. More importantly, single malt is dominating the Scotch whisky shelves in stores around the country. At the 172-unit Total Wine & More, for example, sales of single malt Scotch are now 43 percent larger in dollars than those of blends. This ascent has led to a crossroads, as single malt seeks to cultivate broader appeal while still retaining its cachet.

A key issue, of course, is pricing. Many super-premium Bourbons start at around $25 a 750-ml., while single malt Scotch generally starts at $40. At $25 and above, Bourbon outsells single malt Scotch by three to one—4.5 million cases to 1.6 million cases, according to Impact Databank. Seeking opportunity within this dynamic, some major single malt players have sought to move closer to the Bourbon space. Diageo dipped below the $40 mark with last year’s rollout of The Singleton of Glendullan, whose 12-year-old expression retails at $35 a 750-ml. The 15-year-old ($50) and 18-year-old ($80) are also positioned below their single malt peers. This “gateway” brand to single malts, as Diageo has dubbed it, “shows our commitment to expand the category,” says Andrew Roden, Diageo’s U.S. brand director for Scotch whisky. Diageo’s goal is for The Singleton to be its global flagship single malt and category leader. The U.S. effort is still in its early stages, but The Singleton has yet to break into the top 10 in the United States, according to Impact Databank, with its annual volume still below 15,000 cases.

Pernod Ricard USA is pursuing a similar pricing strategy with The Glenlivet Founder’s Reserve, a non-age-statement (NAS) label and permanent member of the portfolio. Launched in 2015, it initially was parity-priced with Glenlivet 12-year-old, but the company has begun to reposition the label as the brand’s entry-level single malt. Founder’s Reserve has “allowed us to move up pricing on the 12-year-old,” said Pernod Ricard North America chairman and CEO Paul Duffy earlier this year. Pricing aside, Founder’s Reserve boasts a taste aimed squarely at millennial palates. Pernod touts the “creamy sweetness” of Founder’s Reserve in its effort to attract Bourbon drinkers. “Founder’s Reserve is attracting new drinkers, including women, into the franchise,” says Sona Bajaria, The Glenlivet’s vice president of marketing. “It’s bringing in more of those consumers because of its approachable taste and competitive pricing, relative to Bourbon and high-end whisky.”

Targeting millennial tastes has also been a focus for Glenfiddich. In 2015, Glenfiddich launched Bourbon Barrel Reserve 14-year-old ($50 a 750-ml.), touting its vanilla and brown sugar notes in an appeal to millennial Bourbon drinkers. The Macallan, meanwhile, launched Double Cask 12-year-old ($65) last autumn in yet another effort to reach millennial palates, though it has kept its pricing at parity with its Sherry Oak 12-year-old expression. “Double Cask allows the American oak flavors to shine,” says The Macallan’s senior brand manager, Sam Leotta. “It appeals to existing Macallan drinkers as well as a broader audience, some of whom are new to the category.”

Product Proliferation

Those efforts are just part of the current explosion of labels across the entire single malt space. Special, limited releases have become the norm rather than the exception, as producers seek to manage inventories while also creating an aura of exclusivity. Even the broadly distributed Glenfiddich Bourbon Barrel Reserve is billed as a “U.S. exclusive.”

This fall, Bruichladdich is offering a variety of releases, including four new editions of the Octomore Eights, as well as three Old and Rare releases, featuring the final casks from distillations in 1984, 1985 and 1986.  There will also be two Barley Exploration releases—one distilled from organically grown barley and one from an ancient six-row barley called bere. This past March, Bruichladdich rolled out three limited-edition 10-year-old whiskies: The Laddie 10 Second Limited Edition ($66 a 750-ml.) Port Charlotte Second Limited Edition ($70), and Octomore ($235), all made from 100-percent Scottish barley and limited to 18,000 bottles each worldwide. Also released was Bruichladdich’s Black Art V ($399) a 24-year-old whisky limited to 12,000 bottles globally.

Glenfiddich is expanding its limited-edition Experimental Series this fall with Winter Storm ($250 a 750-ml.)—a 21-year-old expression that owner William Grant & Sons says is the first whisk(e)y ever to be finished in ice wine casks sourced from an ice wine vineyard in Canada. The two previous releases in the Experimental Series, India Pale Ale Cask Finish and Project XX, are both permanent additions to the Glenfiddich range. William Grant also expanded the lineup from its Balvenie distillery with the new Balvenie Peat Week 14-year-old ($99), the distillery’s first release made from 100-percent peated barley. The limited-edition expression will return on an annual basis. “We’ve had limited releases finished in peated casks before, like The Balvenie Peated Cask 17 year-old, so we knew there would be a lot of excitement around this expression,” says Balvenie brand director Greg Levine.

The Macallan, meanwhile, launched a 1991 vintage single malt Scotch as part of its Fine & Rare Collection earlier this year. Fine & Rare showcases the brand’s rarest vintage single malts, with the earliest distillation dating back to 1926. Bottled at 49.4-percent abv, the 1991 Fine & Rare vintage ($10,000) features liquid from a Sherry-seasoned American oak cask filled in March 1991.

Given Scotch whisky’s tight supply situation, permanent products have become as newsworthy as limited edition releases. In September, Ardbeg released An Oa ($60 a 750-ml.), the first permanent addition to the portfolio since 2009. An Oa joins Ardbeg 10-year-old, Uigeadail and Corryvreckan in the permanent portfolio. Named for a rocky headland at the southwest end of Islay, An Oa blends Ardbeg whisky from ex-Bourbon, Pedro Ximénez and new charred oak casks, among others. The whiskies are then married in French oak vats for three months.

Highland Park has made more dramatic changes to its range, starting with the June launch of Valkyrie ($80 a 750-ml.), a limited-edition NAS label featuring a higher proportion of peated whisky than Highland Park 12-year-old. Valkyrie is the first label in Highland Park’s three-part Viking Legend series, which will also feature the Valknut label in 2018, followed by Valhalla in 2019. A new NAS expression called Magnus ($40), named for Highland Park founder Magnus Eunson, launched in late summer. Another label, Full Volume ($100), a limited-edition whisky distilled in 1999, is slated for launch this month. The releases, which feature a new visual identity, are part of a rebranding effort that promotes Highland Park as “the Orkney single malt with Viking soul.” The 12-year-old has been given the name Viking Pride, while the 18-year-old is now called Viking Honor. Highland Park Dark Origins, 15-year-old and 21-year-old are being discontinued due to supply issues.

The Age Statement Issue

Highland Park is hardly unusual in terminating age statement labels because of inventory constraints, but the sheer number of new, attractively packaged and often highly rated NAS releases has muted the once-controversial issue to some degree. Even so, retailers say NAS products do require more hand-selling. “Americans typically want to know how old the liquid is, so sometimes it takes a bit more work to sell a non-age statement product,” says Keith Hanson, spirits buyer at Costa Mesa, California–based retailer Hi-Time Wine Cellars, citing The Macallan Rare Cask ($300 a 750-ml.) and Glenmorangie Signet ($230) as two of his most sought-after NAS single malts. “We do have to explain that they’re a blend of older whiskies in order to sell them,” Hanson adds.

The Macallan has found success in the NAS space with a number of offerings besides Rare Cask, notably its Edition series. Earlier this fall, it unveiled Edition No. 3 ($95), a collaboration between The Macallan master whisky maker Bob Dalgarno and perfumist Roja Dove. The 48.3-percent abv, NAS whisky was aged in European and American oak casks and is limited to 250,000 bottles globally. NAS whisky has even found a foothold at the top end of the market with offerings like The Macallan’s Masters of Photography series, whose sixth edition launched this past spring. Limited to just 100 bottles in the U.S. market, this year’s edition ($3,000) was created in partnership with photographer Steven Klein and marked The Macallan’s first use of ex-Rioja casks.

Glenmorangie has been releasing high-end NAS whiskies for years and has masterfully handled the issue with a long run of high-scoring successes—such as its Private Edition series. Earlier this year, Glenmorangie released its eighth annual Private Edition expression, Bacalta ($99 a 750-ml.). In addition, this fall Glenmorangie reintroduced Astar ($99), which was last released in 2008. The NAS label has been aged in oak casks that were sourced from the Ozark Mountains and dried for two years in the open air before coopering, charring and seasoning with Bourbon for four years. Glenmorangie sister brand Ardbeg has also weathered the age statement debate well, developing an enthusiastic following despite having only one age-statement product—Ardbeg 10-year-old—in its permanent line.

Diageo’s two most prominent NAS single malts, Talisker Storm and Oban Little Bay, are showing significant growth, according to Roden. “Their success shows that age is only one signifier of quality,” he adds. “Talisker and Oban can craft whiskies with varying flavor palates that can appeal to a wide variety of enthusiasts.”

But some retailers still sound a note of caution when it comes to NAS whisky. “Overall, there’s growing acceptance of NAS products, even if they do seem to be somewhat hit-or-miss,” says Jonathan Goldstein, co-owner of Park Avenue Liquor Store in New York City. “If a distillery issues an NAS whisky alongside a 10-year-old, for example, price becomes a factor. And if the NAS is very different from the core age-statement product, we’ll wait to see whether it generates demand.”

The price positioning of NAS whiskies can indeed still be a sticking point. “From a pricing and marketing standpoint, a lot of companies have bungled the non-age-statement whiskies,” argues Brett Pontoni, spirits buyer at Binny’s Beverage Depot in Chicago. “When you have a core brand that’s a certain age, there’s a perception, rightly or wrongly, that older is better.” He cites the release of Talisker Storm and Oban Little Bay, both priced around ten dollars above their sister expressions Talisker 10-year-old and Oban 14-year-old. “They should have made the NAS labels ten dollars lower, not ten dollars higher,” Pontoni says. “It would have generated more volume. They pulled further away from people being able to try this innovation, rather than making it more accessible. Ardbeg is doing the same with An Oa.” Pontoni cites Highland Park Magnus, which costs $10 to $15 less than the 12-year-old, as a sounder strategy. “Once you get consumers in, you have more room to potentially premiumize.”

Some brands, like Jura, have embraced age statements even as their competitors move away from them. The Jura core range formerly consisted of Origin 10-year-old ($45 a 750-ml.), Superstition ($55), Diurach’s Own 16-year-old ($80) and Prophecy ($100), but those are being replaced by just a single SKU, Isle of Jura 10-year-old ($55). “We found it was confusing for U.S. consumers to experience Jura one way and then have it be completely different the next time,” says Chris Watt, vice president for North America at Jura owner Whyte & Mackay. “There just wasn’t an understanding of Jura’s house style. With Jura 10, we’ve created an expression that unites all the elements in one whisky.”

Bruichladdich offers two NAS whiskies, The Classic Laddie and Port Charlotte Scottish Barley, but aims to be fully open about the whisky’s provenance even when the age isn’t stated on the label. The distillery’s Transparency program lets Bruichladdich drinkers see their whisky’s component casks and ages by entering their bottle’s batch code on the company’s website.  Laphroaig, a non-age-statement pioneer, raised the stakes last year with the launch of Lore ($125 a 750-ml.), a 48-percent abv release that replaced the 15- and 18-year-old expressions.

Brown-Forman Enters The Arena

The major single malt players now have a new competitor in Brown-Forman, which acquired BenRiach Distillery Co. for $416 million (£285 million) last year and is now ramping up the portfolio in the U.S. market. The deal included the GlenDronach, BenRiach and Glenglassaugh brands and distilleries, as well as a bottling plant and the company headquarters in Edinburgh. Several months after the deal, Brown-Forman tapped Rachel Barrie, previously of Morrison Bowmore, as whisky maker for the portfolio.

Brown-Forman is making its initial push with GlenDronach and BenRiach, although the company stresses that Glenglassaugh will also be a priority. “There are so many expressions from all three distilleries, so we want to create focus,” says GlenDronach brand ambassador Stewart Buchanan, who notes that BenRiach’s portfolio alone offered more than 35 SKUs before the acquisition. “When we first acquired these brands, it was all about working through inventory and sorting things out. Given the complexity of the portfolios, it’s been a work in progress.”

The GlenDronach lineup is comprised of 12-year-old ($67 a 750-ml.), Allardice 18-year-old ($180), Parliament 21-year-old ($250) and Peated ($73). GlenDronach has long been known for its special releases such as vintage expressions, as well as its private cask program for retailers. Buchanan explains that these programs will continue and says all the brands will have new limited releases down the road. “It’s just a question of timing,” he notes. “The core labels are meant to reintroduce people to what our single malts are all about.” One special release, The GlenDronach Kingsman Edition 1991 ($900), launched this September as a tie-in with the movie “Kingsman: The Golden Circle,” with 240 bottles allocated for the U.S. market.

The BenRiach line is led by Classic 10-year-old ($62 a 750-ml.) and the peated Curiositas 10-year-old ($67). There’s also a 21-year-old ($250), a Peated 21-year-old ($265), a 25-year-old ($550) and a 30-year-old ($1,000). The Glenglassaugh portfolio currently includes Revival ($61), the first widely released whisky after the Glenglassaugh distillery reopened under former owner Billy Walker in 2008; Evolution ($61); and the peated Torfa ($66).

Opportunity For Smaller Players

The top five single malt brands by volume—The Glenlivet, The Macallan, Glenfiddich, Glenmorangie and The Balvenie—account for about two-thirds of the category. But none of them even reach the half-million case mark, and the category still offers big opportunities for a wide array of smaller labels. “We see customers building libraries of whiskies,” says Michael Lowry, senior manager of spirits at Total Wine & More.  “All brands are benefiting from a consumer willingness to explore and collect. Limited releases and highly allocated expressions are, of course, the most coveted.”

That tendency toward exploration is particularly prevalent among millennials. “Millennial consumers have absolutely zero brand loyalty,” says Pontoni of Binny’s. “The positive aspect there is that they’ll try anything. They’re simply open to new experiences, and you just have to talk to them that way.”

As single malt Scotch prices continue to climb, the smaller players are also scoring on the value proposition. “The Macallan is always popular, mainly because of its Sherry cask expressions—people always say they don’t like sweet, but they do—and because it’s been so well marketed for so many years,” says Hanson of Hi-Time. “But people also want price-friendly alternatives. We sell a lot of Glengoyne, as it’s a Sherry-cask whisky like The Macallan, but much more economical, particularly at the older ages.” Hi-Time sells Glengoyne 21-year-old for $125 and the 25-year-old for $300, a fraction of the price of The Macallan 21-year-old ($600) and 25-year-old ($1,600). Hanson also cites Lismore 21-year-old as a brisk seller. “It’s a sleeper,” he says. “You don’t really hear about it, but it’s also Sherry cask, and definitely a bargain. We sell it for $80, which is a pretty good deal for a 21-year-old.”

An emerging player to watch in single malt Scotch is TD Artisan Spirits, the spirits joint venture between Terlato Wines and South Africa’s Distell Group. The company’s single malt range includes Deanston, Ledaig, Bunnahabhain and Tobermory, and it too is focused on limited-edition Scotch whiskies in the U.S. market, with releases in autumn and spring. This past June, TD released the limited-edition labels Bunnahabhain 46-year-old Eich Bhana Lir ($7,000 a 750-ml.), Deanston 40-year-old ($5,000), Tobermory 21-year-old Manzanilla Cask Finish ($269), Ledaig 19-year-old Marsala Finish ($200) and Deanston 10-year-old Pedro Ximénez Finish ($65).

One small but growing player at affordable price points is Glen Moray. Its 15- and 18-year-old expressions, retailing at $55 and $90 respectively, recently received 90-point ratings from Whisky Advocate. Glen Moray’s volumes have grown from 4,000 4.5-liter cases to 50,000 4.5-liter cases over the past five years. Core offerings are the 12-year-old ($40 a 750-ml.) and Classic ($25), an NAS expression that the company says is about seven years old. Those two labels account for about two-thirds of the brand’s sales. The Classic line also has a cask-finished range that includes Port Cask Finish, Chardonnay Cask Finish and Peated (all $30), as well as a Sherry Cask Finish to be released next year. Imported by Prestige Beverage Group, Glen Moray also recently unveiled the limited-release Mastery ($1,000), a blend of five vintage whiskies from 1978, 1988, 1994, 1999 and 2001.

International Beverage Holdings Ltd. (IBHL) also offers a range of single malt brands with Speyburn, Old Pulteney, anCnoc and Balblair. The accessibly priced Speyburn ($25 to $65 for the range), which the company calls its “entry level Speyside,” is the portfolio’s most widely available label and is launching a 15-year-old ($65) this fall. Old Pulteney ($35 to $899), anCnoc ($53 to $1,119) and Balblair ($69 to $2,250) skew higher up the scale. “Our portfolio can engage consumers across all levels of the category,” notes Steph Ridgway, IBHL’s manager of brand education for North America.

Vibrant, Competitive Future

Not long ago, any discussion of single malt almost always meant single malt Scotch whisky. That’s no longer true, as single malts from Japan, the United States, India and elsewhere have been growing fast. “American malts are taking off,” says Goldstein of Park Avenue Liquor, who cites Westland, McCarthy’s and Balcones as top sellers. “Japanese single malts have been on fire for a few years now, but we also have single malts from a number of other countries, and our customers seem increasingly willing to try them.”

At Total Wine & More, Lowry says the trend is similar. “We classify our single malts by region—Highlands, Speyside, Islay/Islands, Lowlands/Campbeltown and Rest of World/non-Scotland,” he says. “The fastest-growing region in that lineup is Highlands, but the Rest of World single malts are growing significantly faster than single malt Scotch. Single malts from Japan, Taiwan and India are leading that charge.”

Like their peers in Bourbon country, Scotland’s distillers have been investing heavily in expansion. Macallan will open its new distillery and visitor center in the summer of 2018. The ultra-modern structure will become “an architectural attraction in its own right,” Leotta says. Both Glenfiddich and Glenlivet are involved in major expansion projects. For Glenlivet, the latest undertaking follows a project in 2010 that roughly doubled capacity.

Some distilleries are now pushing annual capacity well up into the 20-million-liter mark, reaching historic levels and dwarfing smaller players like Bruichladdich, whose annual output is 1.5 million liters. But the smaller players see the industry’s rising scale as an opportunity to emphasize that their smaller size is an asset in today’s market. “The production capacity of the major single malt distillers has become mind-boggling, as they’ve added tens of millions of liters annually to their output following huge expansion programs,” says Carl Reavey, communications director at the Bruichladdich distillery. “History suggests that it’s unlikely to be sustainable.  But the large numbers of new small-scale producers appearing all over the world promise much local interest and inspiration. They represent the future.”

There’s plenty of reason for optimism all around, as the category looks to a new generation of consumers. “Whisk(e)y follows the consumer’s life stage,” says Lowry of Total Wine.  “Younger consumers get introduced to American whiskey or Bourbon, and as their palates evolve and their disposable incomes increase, they start experimenting with single malts and other higher-end whiskies.  Over time, millennials will follow that same progression. So we’ll continue to place disproportionate focus on single malt Scotch. And we’ll need to expand our single malt shelf space in the coming years as growth continues.”