Single malt Scotch whiskies are among the most expensive spirits found on liquor store shelves, with entry prices starting around $30 and rising high from there. They draw attention from luxury consumers as well as whisky collectors, and the category’s success is one of the more conspicuous indicators of what premiumization looks like at the retail level. The U.S. is the most valuable export market for Scotland’s malts and, for the years leading up to 2020, were an increasing force within the wider U.S. spirits market. A one-two punch—from tariffs and the Covid-19 pandemic—put things into reverse.
In 2020, single malts in the U.S. declined overall by 5.5% to just over 1.7 million cases, that volume is still ahead of 2018 levels. Assuming the tariffs are permanently removed and the pandemic is a temporary problem, it seems likely that single malt Scotch will bounce back for another round and return to growth. Marketers from across the industry seem confident that this is a temporary dip in what can remain a vibrant category. New releases and innovations abounded in 2020 despite the challenges, and more new whiskies have followed in 2021.
While last year’s declines are significant, on a longer timeline, single malt Scotch is still in its best position ever. Since 2010, the category has nearly doubled in the U.S., from 1 million cases then to 1.74 million cases in 2020. Last year’s dip erased the particularly strong gains of 2019, but assuming the tariffs are permanently removed—they were suspended for five years in June—and the pandemic is a temporary speed bump, it seems likely that single malt Scotch will bounce back for another round and return to growth.
“The best thing for us right now is that Scotch is actually coming back,” notes Jeff Feist, category lead, spirits at West Coast retail chain BevMo. “I could not say that over the last 12 months, but just recently we’ve seen a nice little uptick in our Scott’s category.”
Single malts are also very near their peak share of the total Scotch whisky market in the U.S. Last year, roughly 23% of Scotch sold in the U.S. was single malt, slightly less than double its market share in 2010 and more than three times its share of the overall Scotch whisky market in the U.S. in 2000. While the rebound so far has been quite strong, import value is still down, with the group reporting that value is down 10% compared to the first half of 2019. Through June of this year, shipments to the U.S. grew by 3.9% to £323 million ($445 million). The Scotch Whisky Association (SWA) notes that this is not quite enough to bring the category back up to its 2019 volume or value. According to the SWA, “it will take time, investment, and support for exports to the U.S. to regain their strength following a devastating 16 months.”
The top five single malt Scotch whiskies struggled mightily in 2020, with four of the five reporting declines, anywhere from a modest 0.4% to a much more substantial drop of nearly 22%. The U.S. leader for single malt Scotch whiskies is Pernod Ricard’s The Glenlivet, which dropped 0.4% last year to 470,000 cases. Though the brand posted its first loss since 2016, The Glenlivet only dropped by roughly 1,000 cases, easily holding its big lead in the U.S. market and weathering a tough year successfully.
While the pandemic and the tariff situation certainly created challenges for The Glenlivet, brand-owner Pernod Ricard continued to seek new audiences as well as retain its fans with a handful of new releases. Earlier this year, the brand released The Glenlivet 12-Year-Old Illicit Still—an homage to the earliest style of whisky crafted by the Glenlivet’s founder before he ran a licensed distillery. The June 2021 limited release is set apart from the brand’s standard 12-year-old because it’s non-chill filtered and bottled at 48% abv, up from the flagship’s 40%. Illicit Still followed just over a year after the distillery’s previous big innovation, The Glenlivet Caribbean Reserve. That affordably priced non-age statement whisky ($35 a 750-ml.) hit shelves in April 2020 and, according to Pernod Ricard SA chairman and CEO Alexandre Ricard, was the sixth-largest innovation release in the U.S. last year.
In addition to owning the top single malt Scotch, Pernod Ricard also handles Aberlour, the tenth largest brand in the category. Though coming from a substantially smaller base, the brand performed well in 2020, rising 20% to 32,000 cases. The company says Aberlour’s growth has continued into 2021, pointing to it, alongside other of Pernod’s high-end whiskies, as areas of growth for its fiscal year 2021.
For national e-commerce retailer Gopuff, the Glenlivet is the company’s largest single malt brand and its fourth largest Scotch brand overall, after Johnnie Walker, Dewar’s and Chivas Regal, with the Glenlivet 12-year-old as the fourth-best selling individual SKU, as well.
Looking ahead, Ricard expects Pernod’s overall performance to improve as markets recover from the pandemic. “We expect a very dynamic first quarter for July, August, and September, obviously helped by a low basis of comparison last year,” he said during Pernod Ricard’s fiscal year 2021 presentation. “We of course expect and will continue to invest significantly to seize all the growth opportunities around us and to support our future growth.”
Bigger Brand Stumbles
While remaining a juggernaut in the U.S. Scotch whisky market, Edrington-owned The Macallan hit a major roadblock in 2020, dropping by nearly 22%, or 59,000 cases. The brand finished 2020 at 209,000 cases, its lowest point since 2014, making it the only top five Scotch whisky in the U.S. to see its average annual compound growth rate decline (-0.7%) between 2015 and 2020. According to Edrington, The Macallan suffered due to the lack of travel retail business and the depressed on-premise atmosphere throughout the year.
“In last year’s annual report, I anticipated a decline in profitability after several years of consistent growth as a result of the coronavirus pandemic and tariffs on single malt Scotch whisky in the USA, our largest market,” said Edrington CEO Scott McCroskie at the end of June in the company’s fiscal year 2021 release. “Our reported results confirm that this was indeed the case, although I believe that the relatively modest declines represent a good outcome in the circumstances.”
Despite the headwinds battering the brand, Edrington continues to invest in The Macallan, especially in the luxury and ultra-luxury tiers. In February 2021, the brand announced a collaboration with British artist Peter Blake covering a variety of ultra-aged whiskies and ranging from $1,200-$86,000 a bottle. The rarest whiskies, called Anecdotes of Ages, were all distilled in 1967 and are packaged in 13 handblown bottles with collages created by Blake. The distiller also released 322 bottles of the same 1967 vintage whisky—called Anecdotes of Ages: Down to Work edition—that retailed for around $83,000. The collaboration also resulted in An Estate, A Community, and A Distillery, a more widely available (yet still limited) whisky that went for around $1,200.
“The Macallan is a big brand for us; the Sherry cask used to be our top-selling Scotch in the store,” says Feist. “Now that we can’t get as much Sherry Cask as we would, the Double Cask has kind of taken over the ranks as being the top single malt for us.”
In addition to keeping the focus on the brand’s luxury bona fides, Edrington has upped its commitment to sustainability. This summer, the brand partnered with Bentley Motors to create luxury experiences and products as well as map both brands’ paths to environmental success. While the partnership will eventually create products developed jointly by the two companies, it is kicking off with a shared effort to sustainably source materials as both companies work toward carbon neutrality. As part of its plan to be carbon neutral by 2030, The Macallan has purchased two hybrid Bentleys for use at The Macallan Estate, which will be serviced by a fully electric car fleet by 2025.
The Macallan’s portfoliomate Highland Park fared better than its larger sibling, but still slipped in 2020, down 3.8% to 23,000 cases. Edrington has continued to boost the brand with new releases at the high end, bringing two to market this year. In October, Highland Park will release Highland Park Cask Strength Release No. 2. Matured predominantly in Sherry-seasoned European and American oak casks and a small quantity of ex-Bourbon casks, the new expression was bottled at 63.9% abv and retails at $90 a 750-ml.
Earlier this year, Highland Park launched an ultra-limited luxury release, drawing from the distillery’s library to bring an ultra-aged whisky to consumers. The new Highland Park 50-year-old was selected from nine refill casks originally laid down in 1968, married together in 2008, then re-racked into a handful of first-fill Sherry seasoned oak casks. Then, after a further 12 years of maturation, one of these limited casks was selected and married with a small quantity of the whisky from the last 50-year-old released by the Orkney-based distillery. The release is bottled at 43.8% abv and retails at $30,000 a 750-ml.
In third is William Grant & Sons’ Glenfiddich, another pillar of the U.S. single malt Scotch market. The brand slipped 12% last year, falling below 200,000 cases for the first time since 2016. At 185,000 cases, however, it remains firmly in third place, roughly 50,000 cases ahead of Glenmorangie. Like its closest competition, William Grant & Sons and Glenfiddich have continued to stoke interest in the brand at the high-end, releasing new luxury whiskies aimed at collectors despite struggles among the company’s more mass market offerings. In August, Glenfiddich released Grande Couronne, a luxury offering finished in Cognac casks, a first for the brand. It’s the third in a line of luxury cask-finished offerings, following Grand Cru, finished in French cuvée oak casks, and Gran Reserva, finished in rum casks.
The Balvenie, also part of the William Grant & Sons portfolio, declined in 2020, but at a slower rate than Glenfiddich. The whisky dropped 5.4% to 111,000 cases in the U.S.—still 2,000 cases stronger than in 2018. While the whiskies struggled during 2020, William Grant & Sons has shuffled its leadership team, potentially injecting new ideas to revitalize the brands after a hard year. In May, Paul Basford was appointed president and managing director of William Grant’s U.S. business. At the time, Basford expressed excitement at the opportunity to bounce back from 2020 and return to growth.
William Grant & Sons’ single malts do well on e-commerce platforms like Gopuff, where both rank in the top ten Scotch brands alongside their blended malt portfoliomate Monkey Shoulder. The Glenfiddich comes in seventh on Gopuff, while the Balvenie is the platform’s tenth best-selling Scotch brand.
Rounding out the top five single malt Scotch whiskies in the U.S. is Moët Hennessy’s Glenmorangie. The fourth largest single malt in the U.S., the brand held steady in 2020 at 133,000 cases. While Glenmorangie is also active in luxury-priced whiskies— namely the Grand Vintage Malt 1997 released this past May— the company has also expanded its offerings at the more accessible end of the single malt market. In June, the brand released X by Glenmorangie ($35 a 750-ml.), a non-age statement single malt made with input from bartenders. A sweeter whisky, it’s aimed at cocktails and easy sipping, offering consumers an affordable way into the category.
While the single malt market faced substantial challenges at the top, not all brands suffered equally. Moët Hennessy’s Ardbeg performed well in 2020, growing 32.5% to 41,000 cases, nearly double it’s U.S. volume in 2015. The Islay whisky has found success with its flagship 10-year-old release, as well as higher-end limited whiskies.
Outside of the top five single malts in the U.S., volume drops off quickly but many of the smaller leading brands weathered 2020 more successfully than their larger competition. Diageo, a global leader in Scotch whisky, has three leading brands in the U.S. and two managed to hold steady or grow during 2020. Oban, the company’s largest single malt, was flat at 71,000 cases last year, showing an average growth rate of over 9% from 2015 to 2020. Despite the brand’s relatively small size, Oban does quite well on Gopuff’s platform and comes in as the third largest single malt and eighth largest Scotch, overall.
The drinks giant’s Islay label, Lagavulin, declined slightly last year, by 2.5%, to 64,000 cases. But retailers note the brand’s sucess in stores. “We do extremely well with Lagavulin and not only the Lagavulin 16, but the off shoots with the star power that they have with Parks and Recreation actor Nick Offerman,” says Feist. “That little brand continues to really surprise us.”
And Talisker, Diageo’s smallest leading single malt, was up 1% to 26,000, continuing to show the slow and steady gains as it has for the back half of the last decade.
Last year’s slowdown hit Beam Suntory particularly hard, with Laphroaig, the company’s largest single malt, dropping by nearly 11% to 69,000 cases, erasing gains from 2018 and 2019 and bringing the brand back to where it was at the midpoint of the last decade. Beam Suntory’s McClelland’s also continued its slump, dropping by 10.1% to 26,000 cases. Prestige Beverage Group’s Glen Moray, despite declining by 2% last year, has held relatively steady over the last five years. For 2020, the brand was at 25,000 cases and has only fluctuated by 1,000 cases since 2017. Finally, the smallest leading single malt in the U.S. is Bacardi’s Aberfeldy. Bucking the category-wide trend, Aberfeldy grew last year by 26.5%, behind only Ardbeg in percentage terms, to 22,000 cases.
Even amid a marketwide shakeup, Scotch marketers are continuing to take aim at whisky collectors and the peaks of the luxury-tier. In a category with a higher than average price of entry, distilleries and their corporate owners are able to target small niches and present their whiskies to very specific audiences. At one extreme is a bottler like Gordon & MacPhail, which recently expanded their Generations line with an 80-year-old single malt, the oldest ever released. Only 250 bottles of the whisky, distilled at The Glenlivet’s distillery, will be released, with the retail price not being unveiled until the first bottle sells at auction.
Stepping down from the world of fantastically priced one-off releases and other auction staples—which many distilleries, including The Macallan regularly participate in—single malt Scotch whisky marketers reach consumers at the long tail of the market by working with smaller distilleries or serving as independent bottlers to bring unique casks to eager whisky fans.
Importer Shaw-Ross International works with Ian MacLeod Distillers, handling a variety of their single malts in the U.S. The portfolio, which covers whiskies like Glengoyne and Tamdhu, is small compared to the giants of the industry. But according to Shaw-Ross managing director Bruce Hunter, the company has a steady fan base looking to add new whiskies to their collections. “They’re one of the last family-owned distilleries,” he says. “We do really well with the products. With Glengoyne, in fact, a special promotion in Southern California. where we sold 48 bottles of a 25-year-old, 60 bottles of a 30-year-old, and 36 bottles of a 50-year-old.” Glengoyne 10-year-old is among the better bargains in single malt Scotch, often found significantly below the luxury threshold of $60 for 10-year-old single malt Scotch offerings.
Hunter adds that he and his team treat Shaw-Ross’ single malts as a package when dealing with retailers and distributors, helping to keep new releases moving in the market. “It’s amazing to see the acceptance from the retailers and that they want to have the higher marks in their store,” he says.